Saturday, July 25, 2009

Gambling in Russia and the Rust Belt

BOULDER, Colorado -- Earlier this month, the Russian government implemented a ban on gambling, restricting casinos to four special zones scattered across the country. The Western press was all atwitter over this story, acting as if the Kremlin had declared over night that casinos be shuttered.

The deadline of July 1, 2009 to close or relocate all gambling establishments had actually been established two and half years ago, but due to a lack of planning by the government and the general arbitrariness of the law in Russia, few operators chose to close before the deadline, and none have yet moved to the new gaming zones.

The four tiny enclaves to which gambling is now restricted are located in the Kaliningrad Region along the Baltic Sea; in the Altai Region near the border with the Altai Republic in southern Siberia; near the Far Eastern city of Primorye; and along the border between the Krasnodar and Rostov regions along the Sea of Azov.

The regions have been described in the press as "remote," "far-flung," and "far from Moscow." It should be noted that the last casino zone listed above is not far from Sochi, the city that will host the 2014 Winter Olympics. Like the casino operators view of the ban, I have a similar attitude towards the Sochi Olympics - I'll believe it when I see it.

Says one resident of Siberia, "When do we get the showgirls?"

The Russian Ministry of Finance has plans to spend $31 billion of public and private money (roughly 80% from the private sector, the rest from the state) developing these gambling regions, but so far no one has stepped up to invest anything. Some operators have even chosen to move to the hermit kingdom of Belarus rather than open up shop in the Russian enclaves.

As this ban was taking force, I found myself driving across America's rust belt - though upstate New York, Pennsylvania, and Michigan - where casinos are popping up everywhere. Many of these dying post-industrial cities have decided to bet their chips on gambling to improve their fortunes.

Downtown Detroit is now dotted with massive new hotel casinos, built to compete with the establishments across the river in Windsor, Ontario, a city hit just as hard by the decline of the auto industry. Meanwhile, the landmarks of Detroit's city center remain dilapidated, the city remains as dysfunction and destitute as ever, and the crushing competition for gambling dollars has driven Windsor to become one of the worst cities in Canada.

Bethlehem, Pennsylvania, once one of America's colossal steel centers, has turned to the golden gambling goose to at least slow its breakneck decline. A massive steel crane that in a previous era may had carried iron ore to the blast furnaces is now adorned with a massive sign welcoming you the new Sands resort casino.

This is not a new trend, of course - the former steel town of Gary, Indiana opened its first casino over a decade ago, and a growing list of cities and states with nowhere left to turn to improve their economic plight fight and claw with one another to attract the next gleaming casino to their city.

Not only do casino operators squeeze the most desperate municipalities for tax breaks and financing, but they then turn around and squeeze their profits out of the most destitute members of the population. Anyone who thinks that casino revenues come from high-rollers, or from people who are making a reasoned, informed choice to gamble, has clearly never been to the casinos outside of Las Vegas or the Riviera. Bethlehem, Detroit and Gary will never become vacation destinations, meaning the casinos will sell their "entertainment" to the unemployed citizens of these impoverished cities.

This was the case in Russia as well. Yes, the law was poorly planned and badly executed, but gambling had become a serious social ill in the country. Roughly 400,000 people have lost their jobs as a result, a tough pill in Russia's faltering economy, but I have little sympathy for the operators who are mostly homegrown gangsters or foreign profiteers. I can say from personal experience that the expats working in Russia's gambling industry are some of the worst people in the world.

One of the most depressing sights I have ever seen was a man, drunk and likely homeless, pouring 1 ruble (roughly 3 cents) coins into slot machine outside a Moscow subway entrance. The machine was nothing more than a steel box with three digital clock-like displays that flashed random numbers. No bells, no pictures of fruit, and no waitresses plying him with free drinks. For millions of people, this is the so-called glamorous world of gaming.

Thursday, July 23, 2009

Bush and Nixon: The Men Who Would Be Baseball Commissioner

BOULDER, Colorado -- President Barack Obama recently enjoyed the privilege of throwing out the ceremonial first pitch at the Major League All-Star Game in St. Louis. The tradition is nearly as old as the game itself. The All-Star Game started in 1933, and every president since Franklin Roosevelt, who first pitched at the game in 1937 at Washington's Griffith Stadium, has made the ceremonial delivery.

This is just one of many connections between the presidency and the national pastime. While attending the Louisville Slugger Museum and Factory earlier this summer, I watched a documentary chronicling this relationship. Lincoln was lampooned in a political cartoon from 1860 for his love of the game its in infancy; ambidextrous Harry Truman and Gerald Ford each threw Opening Day first pitches with their left and right arms; and Ronald Reagan, when working as a Cubs radio announcer for a station in rural Illinois, would make up colorful descriptions of the action on the field for listeners, as all he had to rely on was a play-by-play ticker tape.

Two men who achieved the highest office in the land also nearly held the highest office in baseball. The dearly departed George W. Bush (well, he's just moved to Dallas) and the irrepressible racist Richard Nixon were both considered for the job of commissioner of Major League Baseball, though both chose instead to run for president.

How different would America - and the game of baseball - be today had both of these men become commissioner? They were arguably the two worst presidents ever to be elected to two terms, yet baseball could have kept them away from the presidency. The ball club owners could have done the nation a favor by keeping these men out of public office. Nixon's presidential ambitions were clear when he declined the offer in 1965, though Bush's were not when he was considered for the job 1992. In Nixon's case, the owners could have been acting much like when a country accepts to host some deposed Third World strongman to prevent them from causing any more trouble, like Saudi Arabia did with Idi Amin, or Boston University continues to do with many former African dictators.

(Above: Nixon making a proposal to add the expansion Saigon Senators to the National League)

Nixon did cause at least one owner a headache when he became president. In 1973, Commissioner Bowie Kuhn fined and suspended newly-minted Yankees owner George Steinbrenner for making illegal contributions to Nixon's re-election campaign, something Big Stein claimed he was forced to do under pressure from Nixon campaign officials.

As commissioner, what challenges would Nixon have faced in 1965? That era saw some big changes in baseball, including expansion into Canada, the playoff system, the players union, free agency, and the growth of night games. As the man who presided over much of this time period, Kuhn was a dynamic yet controversial commissioner, and he was hardly on the cutting edge of all of these changes, especially the new labor relationships that were taking shape between owners and players. Nixon was no friend to unions as president, but during the 1960's he had been considered to head up the nascent Baseball Players Association, and long after he had left the White House, he did successfully arbitrate a dispute between MLB and the umpires in 1986 to avert a strike. With this solid baseball resume, I think it is unlikely that Nixon would have left his office in disgrace aboard a chopper flying out of Dodger Stadium, waving the "V" for Victory.

Unlike Nixon, Bush had few political ambitions, at least that anyone was aware of, in 1992, and even when he assumed the presidency just eight years later, few foresaw that his campaign promises of modest foreign policy, limited federal spending, and education reform would turn into ... well, we all know what happened. Bush also has a baseball resume, but the crises that faced the game during his potential tenure were far more serious. While still the managing partner of the Texas Rangers, Bush was a candidate to replace Faye Vincent. Steroids would become the single most important issue over the next decade, and while he did employ at least one proven juicer (Rafael Palmeiro), it's hard to say whether he would have handled the situation any better or worse (which would be quite hard to do) than Bud Selig. One decision that Bush was surely on the wrong side of was to expand the playoffs to six teams and break the leagues into three divisions, which has been an unabashed success. Every owner voted in favor of the change in 1993, with one exception - the Rangers' George W. Bush.

Bush also understood the power of baseball as a national symbol, something that he mobilized for maximum propaganda effect after the attacks of September 11th, 2001. His theatrics at Yankee Stadium a few days later would make any die-hard nationalist proud. The Yankees, true to form, have continued this ceremony to the present day, forcing everyone to sing "God Bless America" at every seventh-inning stretch. And if you don't feel like singing, then you can get your ass to jail. USA! USA!

It is an interesting bit of counter-factual history, and if I had to choose, I would gladly pick both these men to be my baseball commissioner instead of my president. Bush may still have ambitions to become commissioner, though his rock-bottom popularity make him a risky choice to replace Selig when he retires, supposedly in 2012. I can say this without exception, though; in many cases, both the country and baseball have deserved far better leadership than they have gotten.

Despite his brief term, Bart Giamatti is considered by many to be the last great commissioner. He famously banned Pete Rose for life for betting on baseball, but more importantly, he was able to eloquently express his love and admiration for the game to the public, something that Selig appears utterly incapable of doing. Giamatti also served as president of Yale University, and immediately upon assuming this post in 1978, he issued this memo:
To the Members of the University Community:

In order to restore what Milton called the ruin of our grand parents, I wish to announce that henceforth, as a matter of University policy, evil is abolished and paradise is restored.

I trust all of us will do whatever possible to achieve this policy objective.
That's a platform I can get behind, whether it be from a university president, a baseball commissioner, or the president of the United States.