The purported economic benefits from casino gambling include tax revenues, increased employment, higher wages and payments to capital, and enhanced economic growth. These benefits, should they occur, are not necessarily without costs. For example, the casino industry may partially or entirely “cannibalize” other industries. Gambling And The Law: The Good, The Bad And The Ridiculous. The positive benefits of legal gambling far out weigh the disadvantages proposed by any naysayers. This article dissects and debunks.
During the past two decades, the US casino industry has expanded dramatically. According to the American Gaming Association, there are now nearly 1,000 commercial and tribal casinos in the country.
Plans to expand casino gaming are typically controversial. Massachusetts presents one of the most interesting cases, with voters currently contemplating a measure to reverse casino legalization this coming Tuesday November 4.
The cost benefit analysis
Each time casino legalization or expansion is considered, similar issues come up. Casino proponents argue that casinos will create tax revenues, jobs, and can push average wages higher.
Opponents argue that the social costs, such as crime, industry “cannibalization,” and problem gambling, outweigh the potential benefits. Both sides discount the opposition’s claims. So what does the research show?
When it comes to the economic benefits of casinos, there have been several studies on economic growth, employment, and wages. Perhaps the most comprehensive study on employment and wages was done at the US county level.
Controlling for a variety of factors, the results showed that counties with casinos have higher employment (by around 8%) than those without; wages were slightly higher in casino counties.
There is also published evidence that casinos have a positive impact on state-level economic growth, though that evidence has not been consistent over time.
Tax benefits
Perhaps the most important political benefit of casinos is tax revenues. Although in most states legalized gambling provides a very small proportion of state tax receipts (usually far less than 5%), casino taxes do make it easier for politicians to avoid spending cuts or other tax increases.
In Massachusetts, one of the motivations for casino legalization is that many Bay State residents gamble at casinos in Connecticut and Rhode Island. If new casinos keep hundreds of millions of casino revenue in the state, that means additional tax revenue for the state.
Problem gamblers
On the cost side of the equation, researchers agree that the majority of costs are attributable to problem gamblers, who make up around 1% of the population. These people develop a variety of problems, including reduced employment productivity; financial problems, bad debts and bankruptcies; committing crimes to get money for gambling; and lying to friends and family.
Interestingly, the spread of casinos across the country may not have caused a significant increase in the prevalence of problem gambling. Research has suggested that when casinos expand in an area, there is a short-term increase in the problem gambling rate, but that the rate levels off over time. The result has been a fairly stable prevalence of problem gambling across place and time.
Since the 1990s researchers have been trying to put a monetary value on these social costs of problem gambling. Unfortunately, such measurement is tricky.
Researchers have estimated that around 70% of problem gamblers have other problems, such as drug or alcohol abuse. Thus, it becomes impossible to attribute social costs specifically to the person’s gambling problem. Nevertheless, the scientific literature on the types of difficulties associated with problem gambling is well-developed.
Crowding out competitors
Casino critics typically argue that casinos will harm other industries. This is so-called “industry cannibalization.” The fact is that any new business that competes with existing businesses does the same thing. This is simply a part of market economies.
One can sympathize with existing firms; they never like having more competition. But in the end, a new casino creates a new option for consumers. If they didn’t enjoy gambling, consumers wouldn’t spend their money at casinos.
What about casinos’ impacts on lotteries? There have been recent claims that casinos could significantly harm the Massachusetts lottery. Recent empirical evidence from a study we did in Maryland tends to contradict this.
We found that the establishment of casinos in Maryland led to about a 2.75% decrease in lottery sales. This is hardly a major impact, but it is nothing to sneeze at.
Massachusetts has the most successful lottery in the country, and casinos will probably have a small negative impact on lottery sales. On net, though, gambling tax receipts will almost certainly increase with casinos.
How, then, to assess impact
Policymakers in different parts of the country have taken different approaches to understanding the impacts of casinos. Some states have commissioned comprehensive studies, while others have acted without much empirical evidence. Massachusetts has commissioned a comprehensive multi-year study of the economic and social impact of the introduction of casino gambling.
It’s true that casinos have a variety of impacts on their host communities; they create both costs and benefits, both of which are probably less important than casinos’ strongest supporters and opponents claim.
But from a purely economic perspective, even considering the difficulties in measuring them, the benefits from casinos likely outweigh the costs – with the key benefits being those to consumers who like casino gambling.
This article is part of a series on gambling in America. You can read the rest of the series here.
Economic Benefits of Gambling
Imagine a community where gambling is being promoted or supported. Jobs for the residents become available, tourism industry is alive because there is a lot of recreational and cultural opportunities and many historical buildings are being preserved.
According to the report by The Productivity Commission of Australia's Gambling Industries: Draft Report, it is assumed that the expenditure on gambling represents new expenditure with the conclusion that it invariably indicates large net gains when speaking of economic activity and employment. The economy gains growth from the gambling industry even though it operates in a more complex and interconnected way.
The local economy's growth due to gambling increases when there is a gambling facility or centre in the community. For example, a casino is present. Tourists who visit to play in the casino provides new money to the community as well as to the casino. On the other hand, the money spent by local residents is considered an economic transfer within the community. Without the casino the money of local residents would just be spent on other recreational activities. Economic transfer is apparent.
'Substitution effect' happens when gambling expenditures replaces spending in other industries. Business related to gambling say for instance a restaurant substitutes other business thus others businesses are displaced.
Casinos and other gambling facilities encourages large investments into communities. This helps encourage more investors to invest for new capital projects so there is continuous improvement.
The economy also benefits from gambling through licensing fees from industries. More gambling halls and casinos in the community means more licensing fees that can be collected.
Increase in number of gambling halls, recreational centres and hotels constructed in the community also means increase in the purchase of construction materials for the building of such halls and centres.
Since gambling community aims to attract more tourists and visitors, preservation of historical buildings and landmarks is another benefit.
Even though developing of gambling sites is costly we must look into the benefits it gives to the economy. Gambling might be raising eyebrows of those against it but the end products of the efforts is much rewarding. Positive attitude towards it will contribute to the improvement of gambling business, tourism and other industries and negative attitudes will not help.
Economic Benefits Of Casino Gambling Center
Many states in the U.S. and other countries are already giving their thumbs up to gambling. Studies are made on the economic impact it contributes and with each step made for its promotion the world will soon experience legal gambling.
Best Casinos
Latest Articles
Considering Full-time Online Gambling
If you are a great casino player, you have the luxury of quitting your day job in order to become a full-time online casino gambler. However, you can still lose your money by online gambling. So, you have to make sure that you are really a great casino player before you even think of submitting your resignation letter to your boss.
Economic Benefits Of Casino Gambling System
Read More!
Possible Gambling Restrictions
The Committee head by Sen. John Loudon had written and letter to Gov. Matt Blunt. They are asking for his help to restrict gambling in Missouri.
Read More!
Advantage of Online Gambling: What Players See in This
When the advantage of online gambling will come to be discussed on the halls, there usually seems to be a difference of opinion with what seems to be the greatest benefit that is being experienced. But what matters most is one's preference on what really is the best one to go for.
Read More!
Einsätze die ihre Hand undefiniert lassen
Im Poker gibt es viele Gründe um Einsätze zu bringen.
Read More!
Paragon Development to Handle New Vancouver Casino
Aside from managing the Edgewater Casino, Paragon Development will also manage the new Vancouver casino. The project is expected to open in 2013.
Residents of Chandler Phoenix Displeased with the Tribe's Casino Plans
Most residents of Chandler are against the casino plans by the Gila Tribe in their community. Critic Patty Kozas said that they will be launching campaigns against the casino plans.
New Slot Game Based on Cult Classic Scarface Released at Unibet
Unibet Casino has released a brand new slot game based on Scarface, a popular 1980’s film. The slot offers special stacked wilds and a nudge spin feature.
The Casino Changes at Eastern Area of Chicago
Economic Impact Of Gambling
One of the new changes in the casinos in East Chicago is the renovation of the former Resorts casino into the Ameristar Casino. The casino offers brand new gaming and offerings.