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Eyeing the gift horse
Gaming companies have found themselves in a philanthropic pickle, chided by critics who say they don't give enough. But some companies say that perception is about to change

By Andy Holtmann

Over the past few years there has been a steadily increasing amount of public criticism over the number of philanthropic dollars casino companies have handed out. The perception, at least in critics' eyes, has been that casinos aren't giving enough back to the communities they operate in.

Simmering discontent on both sides of the debate was brought to a boil by the recession of 2001 and especially by the post-Sept. 11 economic crisis, which some have argued hit Las Vegas harder than other tourist destinations.

A series of critical reports and surveys coupled with negative comments from the charities themselves had some casino companies saying 'Enough is enough' by late 2002. They began speaking out, insisting that the industry not only meets but exceeds its charitable obligations.

During the height of the PR storm, two of the industry's largest companies-MGM Mirage and Park Place Entertainment-announced the formation of independent charitable foundations, with the stated aim of achieving more targeted, hands-on donation efforts. Industry officials say the efforts show there is a strong philanthropic effort, though it may not always be reflected in the unforgiving black and white of a ledger.

Las Vegas Mayor Oscar Goodman chided the industry in January over its "eerie silence" in raising funds to fight against a nuclear waste repository 100 miles northwest of the city. "Maybe the cow is so big that only the tail is in Nevada," Goodman told the lasvegas.com Gaming Wire, noting Las Vegas gaming companies' vast out-of-state holdings. "I would only hope they love Las Vegas and Nevada as much as I do."
Goodman cited only Station Casinos-which gave $50,000 to the fight-and Boyd Gaming as the only companies exempt from his disappointment. 

The Nevada Resort Association and the American Gaming Association responded to Goodman's comments with $750,000 toward the fight against Nevada's Yucca Mountain nuclear waste dump, with the promise of more efforts to come. To date, casinos have raised a collective $500,000.
But some of the city's most well-known figures-including entertainer Jerry Lewis-are still saying it's not enough.

"They should be embarrassed," Lewis said. "It's ridiculous. All major hotels have to do is come up with $500,000 apiece."
Critics say the last-minute donations only serve as a guise to cover up the truth-that the gaming industry just isn't interested in helping out.

A fair share...
According to the Gaming Wire, a survey conducted by the Business Community Investment Council of Southern Nevada obtained shortly before MGM Mirage's recent initiative found that Las Vegas casinos had a far lower level of philanthropy when compared to several other industries. Considering the gaming industry's role as a business leader in Nevada, many local charities considered the results of the survey disconcerting.

"We tried to look at why corporations are not giving back to the community and that's why we did the survey," says BCIC founder Robyn Clayton, adding that it included all Southern Nevada businesses. "What we found is that most of them don't have a budget for philanthropy and don't know they should have one. Most aren't quite sure where they should give to in the community."

Clayton says the three-year-old BCIC is trying to raise awareness of corporate philanthropy, offering a forum for businesses to get together to discuss where the greatest needs are. Group members include Boyd Gaming, Harrah's Entertainment and MGM Mirage.

A Los Angeles Times article published in August 2001 raised eyebrows when it pointed to "casinos executives that don't appear to be pulling their philanthropic weight."

Cathy Tisdale, executive director of the Las Vegas chapter of the American Red Cross, told the Times that, despite the amount of revenue casinos pull in each year, the level of charitable giving was far lower than she'd experienced in other cities. At that time, Tisdale said that not one casino had contributed a major gift to her organization. However, she said one casino company did throw her organization a bone.

"They gave us permission to retrieve coins from their water features," Tisdale said. "So we send down volunteers early in the morning walking through the water."

But perhaps the most telling comments came from former United Way of Las Vegas President and CEO Garth Winkler. "If this were the 1960s and we were in Akron, Ohio, the tire industry would be spending a lot more in the community than gaming is doing here. Most charitable organizations in our community don't feel gaming is doing its fair share."

Winkler, after 16 years with the United Way, hastened his retirement after the comments were printed. Some contend Winkler was forced out, but United Way Chairman Laura Schulte denies the claims.

"All I can tell you is Garth has been an outstanding CEO for us for 16 years," Schulte says. "He was not fired. He retired and he's entitled to do that."

Winkler, for his part, has stuck to his guns when it comes to casinos' philanthropic efforts, and he's not alone. An official with the Boys and Girls Club of Las Vegas told the lasvegas.com Gaming Wire it had "received zero gifts from the casinos."

As part of a larger, 10-point agenda, the Las Vegas chapter of the NAACP last year tried pressuring MGM Mirage to invest over $100 million in the predominantly African-American community of west Las Vegas. It argued the company had long ignored minorities, a complaint that has been heard from other Las Vegas minority groups.

Las Vegas' unemployment rolls were swollen by massive layoffs in the aftermath of Sept. 11. Several charity officials have questioned why only two Las Vegas casino companies-Boyd Gaming and the Key Largo Hotel & Casino-donated to the United Way fund for displaced casino workers at the time it was created.

The criticism is not contained to Las Vegas either. Some civic leaders in Des Moines have chastised a decision by the Prairie Meadows Racetrack & Casino to cut back on donations to the community. The casino's officials cited lower gambling revenues and sharply rising taxes as cause for the scaling back. Critics countered that the property has been giving too much money toward racing purses, money that could be better spent in the community.

In New Orleans, some opponents of Harrah's request last year to have its $100 million per year state tax reduced claimed the casino company was trying to skirt its civic duty to the school systems the tax helped fund. Both Harrah's New Orleans and the city drew fire when the latter credited the former with $2.1 million in property taxes it hadn't paid-money that might have gone to the school board, the Audubon Institute and tourism promotion.

Proponents of compulsive-gambling treatment have argued that the gaming industry has ignored the problem or made meager donations in an attempt to save face, while opponents of gambling expansion often use the same argument when pushing for a proposed casino's denial.

Goodman's lambasting over the nuclear waste repository at Yucca Mountain came at a January gaming conference and perhaps set the stage for an industry that was used to taking its lumps fighting back. 

Gaming industry officials say there has been a misconception over the level of giving and community involvement that does occur, and that many of the recent attacks on philanthropy are without cause.

"The gaming industry as a whole is a convenient target for certain critics when discussing the extent businesses give back to the community," says Boyd gaming spokesman Rob Stillwell. "When you hear conversation that the gaming industry isn't giving enough, those come from a minority of very vocal critics that perhaps have other agendas."

...or strong support?
Not everyone feels the gaming industry hasn't been doing its part. Just ask Charles Desiderio, director of development and marketing for the Salvation Army in Las Vegas.

"We have a wide variety of casinos that are very supportive of us," he says. "The gaming industry is the industry of our community. They are asked by everybody for everything all the time. They do support the charities. Maybe they support the charities they want to support, but you can't say they're not doing anything."

Desiderio says the Las Vegas Hilton recently called to suggest a Christmas toy drive as part of one of its slot tournaments. The drive generated over 700 toys for local children, as well as cash contributions from players. Desiderio also called the Tropicana and said his organization has problems with visibility. Tropicana President Hector Mon responded by running two half-page ads in local newspapers and sent the group a $1,000 check.

"Where would we be without the Hector Mons of the world, who can make a decision and say, 'We'll take care of it. It's a good cause and we'll help you'?" Desiderio asks. "How can you not love a guy or an organization like that?"

Boyd Gaming has been one of the Las Vegas Valley's most active charitable donors. Twelve different entities in the company have philanthropy budgets which last year helped fund programs like the Ronald McDonald House, Opportunity Village and the Las Vegas Performing Arts Center Foundation, as well as education and sports programs at UNLV, Bradley University, the University of Hawaii and the University of Mississippi. The company's founder, Sam Boyd, was also instrumental in creating the Boys & Girls Clubs of Las Vegas. 

Stillwell recalls one instance where company Chairman Bill Boyd helped out a number of Las Vegas high school students who had been scammed on tickets to Hawaii for their senior trips. By using the company's charter plane, most of the students were able to take their trips.

"Mr. Boyd saw the news on television, came in that Monday morning and said we needed to help those kids," Stillwell says. "Not all 90 students could go, but over the course of a six- to eight-week period, we were able to get most of them over there."

The giants weigh in
This month, MGM Mirage begins its newly restructured philanthropy program. It is shying away from lump-sum donations to shell charities like the United Way in favor of making more targeted-and more public-outlays to charities.
"Our support for the United Way has not changed," says Punam Mathur, vice president of corporate diversity and community affairs for MGM Mirage, adding that she and countless other employees are active with the charity. "But anytime you give directly, there's a greater awareness that it came from you."

Last year, MGM Mirage accounted for 22 percent, or $2.4 million, of the United Way of Las Vegas' $12.2 million campaign.

Park Place has also shifted its philanthropic focus, creating the Park Place Foundation in November 2001. Its first act was the donation of $300,000 to displaced casino workers in Las Vegas and Reno. That amount was distributed through United Way funds set up to aid workers after the Sept. 11 terrorist attacks.

Park Place Vice President of Government & Community Affairs Lorenzo Creighton says his company's creation of a foundation to donate directly to nonprofits is a way to make public a giving campaign that casino critics have long argued was virtually nonexistent. "Clearly, we as an industry do not get the credit we deserve for our philanthropic efforts," Creighton states. "In many cases, casinos just did what they thought was right. Now, through this foundation, we can make a difference."
But seeking credit or public acclamation for their philanthropic efforts is not the only reason casino companies are choosing to review their philanthropic processes. Both Creighton and Mathur say that creating in-house procedures for donations makes it easier to designate where their philanthropic dollars go, and that it may encourage more involvement at both the rank-and-file and corporate levels.

"What we intend to launch is a program that ties together our existing [philanthropic] efforts with new ones," Mathur says. "Our underlying objective is to try and inspire our employees to do even more than they do now in the community."

Mathur says MGM Mirage relies on a standard philanthropy budget of 1 percent of the company's after-tax profits for the previous year. For a company of MGM Mirage's size, that number adds up-though Mathur couldn't say exactly how much. Aside from the millions of dollars Mathur says MGM Mirage donated to organizations like the United Way, the company also has internal programs for its employees, such as GED preparation, scholarships and skills training.

"That, in my mind, is philanthropy because, if we didn't do this for our employees, it would fall to the responsibility of the communities they reside in," Mathur says.

Creighton says his company's Adopt a Town program also helps in bettering communities. The program provides job and basic skills training for disadvantaged communities. 

The company's total philanthropic budget of $19 million last year went to fund programs like the Boys & Girls Clubs of Atlantic City, the United Way and the United Negro College Fund.

"There have been a number of significant contributions from the gaming industry," says the United Way's Schulte. "In addition to what we receive, there are casinos that donate directly to charities themselves."

Tribal casinos have also been active with charitable donations. In addition to aiding their own services and infrastructure, gaming-enabled tribal nations gave $68 million last year in charitable donations.

Don't fault casino companies for saying 'no,' says Desiderio. Each has its own budget and agenda and tends to stick by it. Casino companies do tend to pull together, though, when an issue is important enough, he adds, (like donating to the relief funds for Sept. 11).

Desiderio is counting on that for the Salvation Army's new problem-gambling-treatment program. The three-tiered program, which will eventually include a Las Vegas-based treatment center-the first in the nation-will cost the nonprofit organization several million dollars to put together. 

"The gambling industry in Las Vegas has always been supportive of helping to combat problem gambling," Desiderio says, adding that his organization has already begun soliciting donations. "With the help of the casinos-which I suspect we'll have few problems attaining-we can make it work without question."

Perception and procedure
By restructuring their giving process, companies like MGM Mirage and Park Place hope to have better control over where their philanthropic dollars are distributed. In-house programs also allow them to tout each contribution the company makes, a level of promotion usually absent from shell foundations like the United Way.

But the moves aren't necessarily a knee-jerk response to recent criticism. In both cases, officials say the creation of in-house programs was studied long and hard.

"We had been talking of [creating the Park Place Foundation] long before the [recent] criticism came up," Creighton says. "We were kind of dismayed because we know what we do in all of those communities we do business in."

Creighton says little will change in how property presidents give to their local communities, that philanthropic budgets are in place at each. The Park Place Foundation allows the corporation to make larger, more public donations to nonprofit agencies. 

"We need to do a little more patting ourselves on the back to be quite honest," he says. "Our focus has been on operating casinos and marketing them to the customer. But we need to communicate to the public a little better what we are doing philanthropically."

With its new system, Mathur says MGM Mirage can better track its philanthropy and better administer the costs of distributing donations. By doing that, she says employees can be sure their money gets to where it is wanted and the company can concentrate on spending more money on charities. 

The company has also initiated campaigns of its own. "As a company, we decided two years ago that we have to stand for something. We have to pick the things we care about to help us say 'yes' or 'no,'" Mathur explains. "Ultimately, we can't be all things to all people. So we identified early childhood development. It's a very significant thing for this company. If you invest in children early and give them what they need to be productive it impacts every negative indicator later on-from prison populations to high school dropout rates. That, for us, is a key thing."

Mathur says MGM Mirage receives between 300 to 500 requests for charitable donations each week. Boyd Gaming's Stillwell says his company's executive team reviews dozens of new requests each day. 

The most important thing, Stillwell says, is making sure the donations that are made will make a difference. That requires time and research.

"I don't think we're ever going to make all of the people satisfied," he says. "It shouldn't be our guiding principle anyway. We just have to continue doing the best we can to evaluate the requests as we get them. We can only do so much." 

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