Sometimes incompetent government has its advantages. I was asked to research the convention center situation while at City Planning in the 1990s, and found out pretty quickly that the problem wasn't the size of the Javits Convention Center. It was the number, cost and availability of hotel rooms and the lack of transit airport access. And yet the city and state decided to go full speed ahead with a doubling of the size of the Convention Center. Fortunately, they were unable to pull it off. Meanwhile, other state and local governments overbuilt convention center space, and are desperately trying to attract a shrinking number of conventions by cutting prices and losing money.
Other state and local governments have also placed much of their hope for economic salvation on casinos, but while New York has pursued gambling at race tracks, it has consistently failed to make a deal to allow casinos elsewhere. Meanwhile, casinos elsewhere are running into financial problems, and pretty soon state and local governments will have to cut the financial benefits they get from gambling to attract gamblers, while still dealing with the social costs.
According to Bloomberg News "spending in the meetings business has increased by 14 percent over the last 18 years, to $102.9 billion in 2007 from $90.2 billion in 1989…The amount of exhibit hall space available for such shows grew by 83.8 percent during the same period, to 66.9 million square feet in 2007 from 36.4 million square feet. Space rose to 68.4 million in 2008." An expert cited by Bloomberg said “State and local governments have overbuilt convention center space, even as demand remains at or below the levels of the late 1990s…The result is a buyer’s market, with cities from Cincinnati to San Diego and Washington, D.C., desperately giving away space in trying to attract new business.”
Meanwhile back in New York, Transit access to the airports remains poor, since the N to LaGuardia was NIMBYed away and the Airtrain never made it past Jamaica, but the private sector seems to have built enough hotel rooms to solve that problem without a public dime. Room rates are still really high here, but they are drifting down to tolerable levels. And the largest conventions are now shrinking to the size of the Javits Center, so there is less need for the Javits Center to grow.
Gambling was only a great deal as long as it was a monopoly for Las Vegas, and then a duopoly with Atlantic City. Nevada and New Jersey were able to capture some of the monopoly profits rung up by casinos catering to customers who had no options. As gambling becomes ubiquitous, it will be no more likely to attract money from out of town than the local McDonalds. At that point, a casino is nothing more than a consumer service that takes demand away from other consumer services.
Now that there is overcapacity, the remaining mobile gamblers will head for destinations that offer smaller vigorish, including public vigorish. That means competing down tax revenues to keep the casinos full, or at least less empty. Las Vegas and Atlantic City are hurting, according to press reports. A casino in Detroit went bankrupt.
We don't need gambling. We have Wall Street, which charges vigorish enough.