Georgia entertainment venues fear impact of casinosAn inside look at the Fabulous Fox
By Amy Wenk and Maria Saporta
As published in the Atlanta Business Chronicle on Jan. 27, 2017
Some of Georgia’s top entertainment venues are banding together to speak out about the potential downside of casino gambling if it becomes legal in the state.
The Georgia Arts and Culture Venues Coalition, which includes 16 facilities such as the Fox Theatre and Woodruff Arts Center, says casino resorts could add unfair competition in the market when it comes to booking top musical performers, Broadway shows, comedians and other acts.
The coalition is vocalizing its concerns just as Georgia legislators, for the second year in a row, are proposing to legalize casino gambling in the state. Bills spelling out the details were expected to be introduced into the Georgia House of Representatives and Senate on Jan. 25.
Scaled back from legislation that failed to gain traction in the General Assembly last year, the bills call for the construction of two “destination” resorts that would include casinos, down from four in the 2016 measure. One would be in metro Atlanta.
“The coalition is not taking a stand for or against casinos,” said Brian Robinson, spokesman for the Georgia Arts and Culture Venues Coalition and a former spokesman for Gov. Nathan Deal. “It is raising awareness. It’s an issue of unintended consequences.”
The casino industry will be watching the progress of the Georgia legislation carefully. MGM Resorts International is proposing to invest $2 billion in a casino resort in metro Atlanta that would create 5,000 jobs, if the Las Vegas-based gaming giant gets the green light.
“I have heard concerns in the arts community that a major player on this scale has the potential to impact an established, but sometimes fragile, arts and culture industry in our state,” said Atlanta arts leader Lisa Cremin, director of the Community Foundation for Greater Atlanta.
The problem, says the coalition, is to drive traffic to their gaming floors, casinos often pony up big dollars to book top acts, shelling out more than market rates for artists. That makes it difficult for existing venues to compete.
In addition, there can be clauses in the contracts that prohibit performers from playing at another venue within a certain mileage.
“The playing field is quickly no longer level when competing with casinos,” said Allan Vella, president and CEO of the Fox Theatre Inc.“The citizens of Atlanta and Georgia have fought hard to save the Fox Theatre, to ensure the Woodruff is healthy and follows its mission, to support the Cobb Energy Centre. To be undermined by this legislation seems inappropriate and foolhardy.”
Losing performances and events could take a big toll on existing venues.
Take the Woodruff Arts Center in Midtown, which has kept the Atlanta Symphony Orchestra afloat with revenue it generates from big shows.
“At the Woodruff Arts Center, we hire acts to perform in Symphony Hall today that are critical to helping us balance the budget for the Atlanta Symphony Orchestra,” said Woodruff spokesman Randy Donaldson. “Artificially and unfairly increasing the costs of those acts because of casinos in the marketplace would definitely hurt our bottom line.”
For the Fox Theatre, losing revenue from events could directly impact its operations as the nonprofit organization doesn’t rely on donations for income. It could also lessen funding for the Fox Theatre Institute, which provide grants, education and consultation to other historic theaters throughout the state, Vella said.
“It’s not that we are crying wolf,” Vella said. “It’s competition that’s at a different level, and it can disrupt our mission and charitable programs.”
Norm Easterbrook, executive director of the RiverCenter in Columbus, Ga., said he experienced the impact firsthand when he led the Gertrude C. Ford Center for the Performing Arts at the University of Mississippi for 12 years.
“The issue that came up is the casinos had buying power that was much greater than what we had at our theater,” Easterbrook said, adding clauses would also prohibit performers from playing within a certain mileage. “We would be blocked from signing an artist while they were in the area.”
It happened when the Ford Center tried to book singer-songwriter Vince Gill, he said, who was performing at a nearby casino.
Now at RiverCenter, Easterbrook said the fear is a casino could have a similar impact on its around 150 events a year. At danger could be acts it has hosted in the past such as Broadway show The Illusionists or comedian Lewis Black.
“I think it’s healthy if we talk about the concerns,” Easterbrook said. “It builds a better business environment for the industry. And, it’s very important we have an informed and engaged electorate.”
A study from AMS Planning & Research that surveyed 20 performing arts center in the U.S. showed that 70 percent of those venues reported losing popular entertainers or concert acts to casinos. Examples included entertainers such as Tony Bennett, Jerry Seinfeld, Don Henley, Fleetwood Mac and Keith Urban.
The Atlanta Convention & Visitors Bureau, a voice for the city’s hospitality industry, is keeping a neutral position on the proposed casino gambling legislation.
But, on Jan. 25, ACVB President and CEO William Pate did acknowledge the growing worries.
“There is heightened concern amongst the entertainment venues in the city,” Pate said. “They are concerned about cannibalization, acts coming to the casino and taking away from their business. So I’ve expressed that concern, and I’ve told the casino groups they need to have an answer for our industry.”
One option to assuage concerns could be to prohibit casinos from having exclusivity agreements when they book acts, said Robinson. Other options include limiting the size of performance venues to 600 people or using some of the casino money to go toward arts funding in Georgia.
“The casinos have met with the Fox and the Woodruff Arts Center,” he said. “They talked about having a memo of understanding … There’s nothing in the current legislation. The casinos want something outside of the legislation.”
In fact, in a Dec. 10 letter to Vella, Lorenzo Creighton, president and COO of MGM National Harbor, which opened in Maryland outside Washington, D.C., on Dec. 8, 2016, said: “We believe there is an opportunity for our organization to work together to further increase the competitiveness of the Fox Theatre … attract more entertainment into the market for residents, and drive greater tourism throughout the city all while recapturing Georgia’s spend on entertainment across state lines.”
Yet, Vella suggested the proposed casino legislation prohibit casinos from having entertainment facilities at all. “They are proposing adding venues to a market that’s already overbuilt,” he said.
Supporters of the casino legislation say it could provide needed funds for the HOPE Scholarships program. Under this year’s bills, 20 percent of gross gaming revenues from the casinos would go toward education.
“It is creating jobs, it’s economic development and it’s education,” Sen. Brandon Beach, R-Alpharetta, sponsor of the Senate bill, told Atlanta Business Chronicle on Jan. 24. He did not immediately respond to a request seeking further comment.
Steve Doty, spokesman for the American Gaming Association, said in a statement to Atlanta Business Chronicle: “Casino gaming is a valued community partner in 40 states across the country … If Georgia decides casino gaming is right for them, then we look forward to complimenting existing entertainment options and bringing more visitors into the city, which would benefit everyone.”