Thursday, November 15, 2007

Blue Chip Layoffs


New Casino Has Drawn Boat�s Customers

Editorial

The layoffs announced by Blue Chip Casino last week ought to be a warning to Michigan City about its dependence on gambling money.

For more than a decade, Michigan City has come to view the casino as a reliable source of income that can simply be folded into its budget for capital projects and operating expenses.

And while Boyd Gaming's $130 million investment in a 22-story hotel that's under construction is proof the company doesn't have any plans to shutter Blue Chip Casino, the fact is that between 60 and 70 people lost their jobs because revenue and attendance have declined since August when Four Winds Casino opened in New Buffalo Township some 10 miles away in Michigan.

Since July, the last month without competition from Four Winds, monthly revenue at Blue Chip has fallen from $26 million to $17 million. In October, 54,000 fewer people visited Blue Chip than they did in September. Boyd Gaming officials were clear that they expected a decline in both revenue and attendance, but the fact is Blue Chip has had to make adjustments, just as any other business would.

David Strow, the spokesman for Boyd Gaming, said the layoffs were something the company did not want to do. "This was a last resort. This was a very difficult decision," he said.

No one doubts that.

Even though the expectations are that attendance and revenue will start to go up again at Blue Chip, there is no guarantee the levels will return to where they were before Four Winds Casino opened.

With that in mind, Michigan City - which gets more than a quarter of its budget from Blue Chip Casino - needs to review its dependency on casino revenue.

More and more, Michigan City has used casino money to pay the insurance costs of city employees. That expense ought to be figured as part of the city's operating costs with money that comes from the city's tax draw. Casino funds should be used on capital projects like fire stations and sewer projects.

Relying on casino dollars as day-to-day operating funds is a dangerous proposition.



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