NIAGARA FALLS, N.Y. - From Prospect Point, next to the giant cascade of white water, the Canadian skyline sparkles with new luxury hotels. A white tower emblazoned with the word "casino" in red taunts this side of the border.
The prosperity across the gorge explains the allure of gambling to the political leaders of this faded and crumbling city.
Across the bridge to the Canadian side, there is a carnival atmosphere of busy tourist strips on clean roads. Cars are bumper to bumper. Sightseers stream up and down the main thoroughfares to the falls and the old shopping center where Casino Niagara is housed. People throng into arcades, discos, a restaurant with a live-shark tank, haunted houses, bars and nightclubs.
The place vibrates, possibly the way Coney Island did in the 1920s, a Canadian version of Tijuana, without the grime and poverty.
For years, local politicians and business leaders on the New York side have sought the state's approval for a casino that would resurrect their smaller tourist district. But an effort to legalize gambling died in the Republican-led state Senate in 1997.
New political momentum
Now new political momentum is growing in Albany, with Gov. George E. Pataki, a Republican, announcing a tentative agreement with the Seneca Nation last month that would turn the city's convention center into an Indian-run casino. A second casino would be in Buffalo.
The governor has sold the idea of casinos to the Senate majority leader, Joseph L. Bruno, an upstate conservative who loathes gambling, and to Senate Republicans, as a major economic development effort in a corner of the state where the economy is in deep trouble. The deal is now stuck in the Democrat-led Assembly, where Speaker Sheldon Silver has said he favors casinos but wants to see details and wants unionized labor to build and operate them.
The Seneca Nation was expected to take up the issue in a referendum in August, but that may be postponed if the Assembly fails to take action soon.
Many longtime residents of Niagara Falls are skeptical that gambling alone will cure the city's economic malaise. The conventional wisdom on the street is that the city government has mishandled the development of downtown for decades and is now grasping at the casino like a drowning man reaching for a life preserver.
"One casino is not going to turn this town around," said Pat Corsaro, a restaurant owner who recently closed his diner on Main Street and moved it to the suburbs. "They better get something other than the casino to keep them here. You have to have some family-oriented things, too."
Even Mayor Irene J. Elia, a former nun and a Republican whose optimism is irrepressible, said the casino would do little for the city of 54,000 unless it spurred the development of new hotels and other attractions. The hope is that a new state development corporation will help toward that end.
"I don't see the casino as a panacea for this area," Elia said. "I see it as one part of the puzzle."
The biggest piece of that puzzle used to be heavy industry, which has been declining for years. The factories are still lined up along Buffalo Avenue: tangles of silos, smokestacks and cranes.
Since January, about 1,500 jobs have been lost, city officials said. OxyChem laid off 300 workers and TeleTech, a new telephone answering service, cut 450 jobs. Nabisco announced it was closing its factory after a century, leaving 200 people out of work. Unemployment is 9.5 percent.
Whether a casino can make up for such losses is unclear. Economists who study gambling are split on the question, but they agree that everything depends on where the money comes from and where it goes.
To spur the local economy, the casino would have to take in cash from some of the 8 million tourists who travel through Niagara Falls every year and somehow ensure that a portion of it is reinvested in the community, economists say. Las Vegas thrives because it attracts gamblers from other states.
But if most of the money bet at the casino comes from people living within 50 to 60 miles, the casino merely transfers money that would be spent at other local businesses to the casino operators, gambling experts said.
The basic question
"The basic question is, `Can you get gamblers from the outside?'" said William N. Thompson, a professor at the University of Nevada, Las Vegas, who studies the economics of gambling. "If you just stimulate a lot more gambling from the local residents, it's not going to help the economy."
John W. Kindt, a professor at the University of Illinois at Urbana-Champaign, said several studies have shown that casinos tend to ruin nearby businesses. To keep gamblers near the action, casinos usually provide restaurants, bars, shows and boutiques inside their buildings. Atlantic City is a classic example. The casinos along the shore abut slums where restaurants and shops are dying.