Chloe Taft

My name is Chloe Taft. I am the author of the book From Steel to Slots: Casino Capitalism in the Postindustrial City. Currently I work at Northwestern University. Previously, I've taught courses in U.S. History and Urban Studies.

My book From Steel to Slots is about the community of Bethlehem, Pennsylvania. I became most interested in it because my grandfather and my grandmother used to live in Bethlehem, and my grandfather worked at Bethlehem Steel. And when I was beginning graduate work, Bethlehem Steel had closed, and they were looking for ways to reuse this massive steel plant that's in the middle of the community. And it turns out they were going to open a casino--a steel-themed casino--on the site of the steel plant. And to me this was an incredible story of economic change and changes in a community that I wanted to explore it further. So I went to Bethlehem. I interviewed a lot of different people from steelworkers to 00:01:00politicians to community activists, casino dealers, historic preservationists to learn how they made sense of this economic transition.

Bethlehem, Pennsylvania, if you look at the longer history of the community, is a fascinating kind of amalgamation of everything American Studies, which is my background. There's a religious component to the community; it was founded by the Moravians, which was a Protestant sect. Then the steel company--Bethlehem Steel Company--came in in the late 19th century, and it became really a hub for manufacturing in the United States, but also globally. Bethlehem Steel is the second largest steelmaker in the world. And today there's the Las Vegas Sands Casino in Bethlehem. Again a global corporation has set up shop there. There's 00:02:00an art- a vibrant arts community. There's a whole story about immigration in Bethlehem in terms of a first wave of European immigrants who came both as Moravians, but also to work at the steel company. Followed by Mexican immigrants and Latino and Latina immigrants from other parts of the world. So it really as a community captures a lot of what's going on in America both historically and right now.

Some people I talk to in Bethlehem like to divide the history of the community into three eras. The first era: the age of the Moravians. The Moravians lived in a communitarian society where they pooled their resources. All the single women 00:03:00lived in one house. They had a kind of a communal economy where they shared all their resources. Following some debt issues in Europe, the Moravians decide to sell off a bunch of the land in Bethlehem in the late 19th century to industry which set up shop across the river that divides the town. And that's where the origins of Bethlehem Steel came from. Bethlehem Steel, beginning in the late 19th century and through the 20th century, developed into the second largest steelmaker in the world and was actively involved in building the skyscrapers that you see in New York and Chicago. Built structural steel for bridges like the Golden Gate Bridge. It was involved in munitions for World War I, World War II, basically every war America has been involved in. And it employed thousands 00:04:00and thousands of people. Bethlehem Steel ultimately closed in the 1990s in a wave of deindustrialization that affected a number of communities across the United States. And in the kind of postindustrial era, which some might call the age of the casino, Las Vegas Sands ended up coming into the community and opening an industrial themed casino on the site of the former steel mill in the 21st century. The twenty first century Bethlehem goes far beyond just the casino. There's a vibrant arts community. Lehigh University is obviously an active presence there. But it's a community economy that's less focused on manufacturing now and more on arts, education, healthcare, and also warehousing and distribution which again takes advantage of some of the infrastructure that's left over from Bethlehem Steel.

Bethlehem was founded as an immigrant community. The Moravians came from Eastern Europe, mostly from what's now Germany and Czechoslovakia. When the Bethlehem Steel Corporation set up shop, it began recruiting also actively from Europe, and a lot of early steel workers came directly from Italy, Hungary, Germany, England to look for higher wage jobs and a good stable livelihood in the United States. And so especially the neighborhoods around the steel plant have always kind of been these vibrant working-class immigrant neighborhoods. Immigrants built Catholic churches and Protestant churches dedicated to their specific nationalities. As the decades went on, the country of origin of a number of the 00:06:00immigrants changed, but it still was always a draw. Especially the jobs were a draw for Mexican immigrants, for immigrants from other Latin American countries, and also from Puerto Rico especially. And a lot of the neighborhoods around the steel plant shifted from being Eastern European to more Latino and Latina. And one interesting change since the casino has opened is there has been a new wave of immigrants to Bethlehem, particularly from China. The Las Vegas Sands Corporation actively recruited Chinese employees to cater to Chinese gamblers who come in buses from New York. And so now there's also an increasing Asian population in that same neighborhood that was once Eastern European and then Mexican and Puerto Rican. And so these communities have always made Bethlehem a 00:07:00vibrant place and contributed to the culture. At the same time, it's also always been a site of division in the city. There are geographic divisions between where different ethnicities and nationalities have lived. There's always been some tension between those different areas, between those different backgrounds. That's no different today. One difference today is those stable jobs at the steel company no longer exist, and so this idea of coming to Bethlehem and easily rising into the middle class is no longer a possibility for many of the immigrant and migrant families that settle here. The highest levels of poverty remain in those neighborhoods around the former steel plant. It's also areas where housing is often dilapidated or needs further investment, but it's where 00:08:00many families are able to afford to live. So there's still a real need for more affordable housing and for high paying jobs that can sustain the economic vitality and the cultural vitality of Bethlehem.

What's really interesting about the Bethlehem Steel site is that it wasn't just the case of a corporation one day locking the gates and leaving and never looking back. The decline of the Steel Company was quite gradual, and as it closed down, Bethlehem Steel wanted to figure out how the land could be reused. And so even in the 1990s they entertained the idea of making the site into kind of a festival marketplace--an idea that's been popular in other communities--where there would be restaurants and there'd be a cinema and other 00:09:00kinds of entertainment and service industries that would be heritage-themed on the steel site. They tried for a decade to get those plans off the ground, but really were unable to find anyone with the resources to take on such an extensive project. When Pennsylvania legalized casino gambling that seemed to open up another opportunity for a very wealthy gambling corporation to fill that need. And so land that has sat vacant for about a decade, meaning there were no property taxes being paid to the community, there were no jobs there that would sustain workers' salaries that again funnel back into the community. The mayor likes to show kind of a smile--sorry, the former mayor likes to show a 'smile graph,' I believe he calls it, showing how after Bethlehem Steel closed there was a major dip in terms of tax revenues coming into Bethlehem. And then as the 00:10:00site has been redeveloped--spearheaded by the casino--that trajectory has been up.

When Pennsylvania legalized casino gambling, communities went through an application process where prospective corporations who wanted to open casinos had to get approval and licenses from the Pennsylvania Gaming Control Board, and there are a limited number of licenses available. Because of the Lehigh Valley's proximity to New Jersey and New York and major metropolitan centers, as well since interstate access to those populations, it was always seen as a shoo-in for a casino license. And the question was: was that casino going to be in Allentown to Bethlehem's West, or would it be in Bethlehem where there was all this empty industrial land from Bethlehem Steel Corporation? Las Vegas Sands 00:11:00made an early pitch to Pennsylvania that it wanted a license to open a casino on the former Bethlehem Steel land, which set off a major debate within the community of whether this is going to be the best use for that land. On the pro side, this was a major corporation that had deep pockets and could finally built on a site that had been vacant for almost a decade. On the con side, a lot of community members saw the idea of a casino in their community as kind of against everything Bethlehem stood for. Based in part on the community's Moravian history as a religious community and also on the community's history as an industrial behemoth that had provided good jobs and had worked to save the country from World War II and had positive associations with a lot of community members who had worked there for generations. The con side was really mostly 00:12:00morally opposed to the idea of gambling. That in the end was not enough to disrupt the promise of economic gains that Las Vegas Sands promised in terms of jobs and in terms of tax revenue.

One major difference between employment at Bethlehem Steel in its heyday and employment in the casino industry today is the absence today of a strong union. So Bethlehem Steel beginning in the 1940s was a hub like the steel industry in general was for union organizing. Things like ensured benefits and vacation time 00:13:00and a formal grievance process to work through. A lot of members of the Bethlehem community rose into the middle class during that heyday of industrial production--1940s and 1950s--particularly white men who benefited most from these union gains. A lot of them were able to build homes, buy a boat, their wives could stay home to take care of their children, they could send those children to school to college for the first time. It was really an age that people point to as having significant economic gains. Since the 1970s in particular, a lot of those gains have been erased both with deindustrialization and also a significant decline in union representation. The Sands Casino is one example of a corporation that does not have unions aside from the security 00:14:00guards which came later in the game. And Las Vegas Sands in particular is actually known as a very anti-union corporation. They prefer to say they'll pay their employees well and offer benefits that don't need union representation. But in a community that's used to that history where many former steelworkers still live and some who work at the casino, that disjuncture has been difficult to stomach. It's also a characteristic of a lot of the warehousing and distribution jobs that are also popping up on the former steel site. They don't carry the same benefits or the same pay or the same stability as a job at the Bethlehem Steel Corporation did.

When Las Vegas Sands effectively donated some land to the city so that the city 00:15:00could help build an art center on former steel land, it had included in the deed terms that there could be no union organizing happening on that land, which represented a limitation on free speech that caused a lot of concern among several factions of the community. The deed requirements are typical of things like in shopping malls. It's something that Las Vegas Sands has notoriously been involved in.

In Las Vegas, Las Vegas Sands was involved in a significant court case about whether there could be picketing on the sidewalks--the public sidewalks--outside of the casino, and whether the casino had control over what speech happened on that land. And so when something similar popped up in Bethlehem where there seemed to be prohibitions on free speech particularly related to union organizing on land that had been part of a union bastion, the Bethlehem Steel 00:16:00Corporation, that caused a lot of concerns in terms of what the larger implications of Sands' presence in the community was going to be.

So one of the biggest promises that Las Vegas Sands made coming into Bethlehem was the number of jobs it would create. And it did. It created about 3,000 jobs on a site that had been vacant, that had zero jobs when it entered the market. You do have to compare that to the Bethlehem Steel Corporation which at one point employed 40,000 people during the height of World War II. By the time Bethlehem Steel closed it was much smaller than that, but we were talking about thousands of people that worked at Bethlehem Steel. So at the casino there are a 00:17:00number of different types of jobs available. A lot of the executive positions when the casino opened came from outsiders from Las Vegas or from New Jersey who already had experience working at casinos. Although as it's been there longer there's more opportunity for locals to move up in those positions. Another major opportunity at the casino was to get work as a dealer, and Las Vegas Sands initially partnered with the Northampton Community College--the local Community College that also has on the former steel site--to train dealers and teach them how to deal blackjack, poker, roulette, baccarat and meet the requirements to get a license to be able to apply for those jobs. And that became kind of a feeder for locals to get in to those jobs. There's also jobs obviously in all the service industries associated with a casino, whether that is housekeeping at 00:18:00the hotel, whether it's in service in the restaurants as line cooks or as waiters and waitresses. There's also opportunities in the attached outlet mall in retail. And so there are number of service opportunities for people in the community. The question is how many of those jobs have gone to the people who live in Bethlehem or in near proximity to Bethlehem, and how many have gone to people from outside the community? There does seem to be a division between or disparity--there does seem to be a disparity between whether Bethlehem residents in the immediate vicinity of the casino have gotten as many of the jobs as they had once hoped for, and in part this has to do with the clientele at the casino 00:19:00directly targets and hopes to attract. One of the major sources of revenue at the Sands Casino is from Chinese gamblers to come from Chinatown in New York on the buses, dozens of buses every day. For that particular clientele, Las Vegas Sands has actively recruited dealers who can speak Chinese. Prior to the casino coming into Bethlehem, that population was very limited in the immediate vicinity, and so a lot of those dealers are coming from the New York area instead. A lot of the neighborhoods around the casino are primarily Latino and Latina, and they have said that they feel there is less of an opportunity to work at the casino, that Spanish language skills, for instance, are not as in high demand as Chinese language skills.

Because Las Vegas Sands is a global corporation and has sites across the world, it has the leverage to offer good health benefits, for example. It has the 00:20:00pockets--the deep pockets--to offer fairly competitive wages. In that case, it has been a positive impact on the local economy. Also in terms of the number of jobs that it offers. It doesn't quite compare to what the healthcare system in the Lehigh Valley offers, but it's one of the top employers in the area.

I think one thing that was not foreseen when Las Vegas Sands came into Bethlehem was how Bethlehem would fit into its global portfolio. Las Vegas Sands makes the vast majority of its profits in Asia, in Singapore and Macau. As it was also pitching the Casino in Bethlehem, it was expanding significantly in Asia. Today most of Las Vegas Sands' corporate profits come from Macau and Singapore, which 00:21:00are the biggest gambling markets in the world, far larger than Las Vegas. In the meantime, the Bethlehem casino has fit less and less into this global portfolio. It's much smaller. It's often not mentioned at all in their earnings calls. And although it's very profitable for the corporation, a lot of outside observers saw early on that it might not always fit within their long-term plans.

It wasn't a surprise to many community members when, less than ten years after the casino opened, Las Vegas Sands was already looking for a new buyer for that property. And a lot of the concern in the community is how that transition to a new owner might happen, and whether the new owner will be committed to the community or not. Some observers and some early casino proponents, such as the former mayor, have always noticed that this might be a short-term opportunity and have always wanted to get as much development happening as possible once the 00:22:00casino opened.

I think a lot of people have been disappointed that those plans for ancillary development have taken a lot longer to materialize than they had thought. So for instance there's a huge industrial building called the No. 2 Machine Shop next to the Sands Casino that has been on everyone's radar for a long time as something that might be room for more retail or even housing or another hotel tower. Las Vegas Sands has been very slow to move forward with any plans on that, in part because it turned out they've always been looking for maybe another buyer to take on a project of that scale.

One of the significant trends in casino development, not just in Bethlehem, but 00:23:00across the United States and across the world, is that the casinos often open in communities that are either impoverished or in desperate need of employment. And often these are postindustrial communities, communities that formerly hosted factories. And so you see in Indiana, for example, casinos in Gary which also is a former steel area. You see new casinos opening in Massachusetts on former industrial land. There's one outside of Boston opening on a former Monsanto chemical plant. And this notion that casinos would open in deindustrialized areas goes hand-in-hand with the needs of those communities today. The greatest needs are often jobs and tax revenues, and that's something that casinos promise when they come into a community.

When Las Vegas Sands opened its Bethlehem Casino in 2009, its very quickly 00:24:00became one of the most successful small Regional casinos, not just in the area, but in the country. And in a way that's also mixed blessing because so many other communities saw the success that a regional casino could have. So many other states saw the amazing amount of tax revenues that Pennsylvania was getting from all of its casinos that they decided 'we'll get on board, too.' Since Pennsylvania legalized casino gaming in 2004, a number of the bordering states have also decided to expand gambling. Ohio has expanded. New York has expanded. Maryland. All of these communities, most financial experts agree, are 00:25:00going to start cannibalizing each other in terms of attracting from the same pool of gamblers and depleting the number of gamblers going to each one. So that's a real concern especially in kind of Mid-Atlantic and New England regions. New York has just decided to open more casinos, and there's potential of New York City having casinos in the near future. That's all going to draw from the same market that the Sands Casino is drawing from in Bethlehem. The majority of the gamblers in Bethlehem are coming from New York.

Atlantic City is one good example. Bethlehem is actually closer to New York City than Atlantic City, and some credit it with taking business away from what was the second biggest gambling hub in the United States after Las Vegas. So after Las Vegas Sands opened in Bethlehem, several casinos closed in Atlantic City, in part due to the fact that there were just too many and they couldn't all be 00:26:00sustained. Including one that had just been built; it went bankrupt twice within a year.

One of the most interesting things is that when Massachusetts decided to legalize casinos, it included a question in its application saying: 'what will you use this building for if at some point in the future, casinos are no longer functional there?' It's a fascinating thing to ask someone who's making a pitch for a long-term Economic Development to predict what will happen when they are no longer sustainable. Some of the answers that casinos gave included things like 'we never imagined this happening in the future, but this could be reused as a community college or as a Convention Center.'

The other economic development plans for these communities are no more novel 00:27:00than what's been being done since the factories have closed. Perhaps a more sustainable future model would focus equally on developing affordable housing, for instance, not just for workers but for other community members. I think a lot of the proposals for casino development include promises of ancillary development, meaning development beyond the casino that never actually happens. If some of that did happen, and if some of that catered not just to gamblers, that could really make an impact on a community. A casino itself though is not going to be a long term solution.

In almost every Community where a casino has promised that it's gamblers will end up sending money outside of the casino weather at restaurants, museums or at 00:28:00other communities that never quite lives up to expectations. There is generally a focus on gamblers coming into the casino and going back home without going out to the community at all. In fact, the primary casino development model specifically positions casinos near highway interchanges so that easy in-and-out access can happen. It's similar to building a new sports stadium in a city for example. You want people from the suburbs or from other communities to be able to come in and out as easily as they can, which limits how much money might be spent in the community itself.

At the same time the Bethlehem casino ushered in a new model of casino development that is a bit more integrated geographically to the community in which is located. It's not quite on the outskirts of town in the way that some other casinos have been. The Springfield, Massachusetts casino that recently 00:29:00opened is really integrated into the downtown, again with this promise of there being other things to do besides spend money on gambling.

When I set out to learn more about Bethlehem to write this book I knew there was a story there but I didn't know what it would be, and of course it turned out to be more complicated than I ever imagined. So to say there's a black-and-white answer as to whether Bethlehem in the 21st century is better or worse than it was when Bethlehem Steel was in its heyday is not that easy to answer because it depends on who you ask and what their situation is.

On the one hand, it created thousands of jobs and created a significant amount of money for the city that has helped pay for other improvements. The art scene, 00:30:00for example, has been vastly improved since Las Vegas Sands opened. Bethlehem has always been a destination for tourists, and this has, in a way, just expanded who those tourists are. On the other hand, the casino in Bethlehem, or in other communities, is not a long-term solution. As other casinos open, the revenues will go down. They'll have to compete more for the gamblers. A lot of those gamblers aren't spending money in the community after all. As the community leaders in Bethlehem always hoped from the beginning, it's not the casino development itself that's going to improve the community. It's what can be leveraged from having the casino there that's going to be of most benefit. And in Bethlehem, that's going to mean additional development of the Steel site. It's gonna mean additional investment in housing in South Bethlehem, for 00:31:00example. It's not just about opening a casino, rolling the dice, and hoping everything's going to be okay.