Casinos, Crime, and Community Costs

The Economic Winners and Losers of Legalized Gambling

“…In terms of generating local tourism, riverboats seem 6 Grinols and Mustard (2004) discuss multiple ways casinos could be expected to alter local crime rates. Casinos might reduce crime directly by improving legal earning opportunities, both through direct wage effects and positive economic development.…”

“…However, the authors identify substantial negative effects as well -bankruptcy rates, violent crimes, and auto thefts and larceny each increase in the surrounding community by 10 percent. Grinols and Mustard (2004) empirically investigate the relationship between casinos and crime rates using county-level crime data on the 7 FBI Index 1 offenses (robbery, aggravated assault, rape, murder, larceny, burglary, and auto theft) from 1977 to 1996. Their paper utilizes the quasi-experiment created by casino openings to identify a causal relationship.…”

“…It is particularly difficult to identify a causal link between gambling and other problems, as pathological gamblers often have other behavioral disorders (GAO, 2000, p 3). Additional data and research establishing the causal link between 7 See Grinols and Mustard (2004) for a discussion of weaknesses in the previous literature, which has tended to focus on small samples and isolated case studies and/or has made no attempt to deal with issues of omitted variable bias. 8 Congress created NGISC in 1996 to conduct a comprehensive study of the social and economic impacts of gambling the United States.…”

Drinkers and bettors: Investigating the complementarity of alcohol consumption and problem gambling

“…Economists have proposed a number of possible explanations for gambling, including non-concave utility curves (Friedman and Savage, 1948;Hartley and Farrell, 2002), differences of opinion (Morris, 1994;Shin, 1993), varying risk preferences (Ali, 1977;Quandt, 1986), augmented income theory (Kim, 1973), "dream" demand functions (Johnson et al, 1999), money values and probabilities in any risky situation generating direct value beyond that represented by an expected utility function (Conlisk, 1993), and expenditure indivisibility (Kwang, 1965). Economists have also examined the economic impact (e.g., employment, mortality rates, quality of life, crime rates) of casino gambling (Evans and Topolski, 2002;Grinols and Mustard, 2006;Kearney, 2005a;Nichols et al, 2002), consumer behavior and economic growth in the presence of lotteries (Kearney, 2005b;Walker and Jackson, 1999), casino revenue taxation (Anderson, 2005), and determinants of lottery and casino demand (Clotfelter and Cook, 1990;Cook and Clotfelter, 1993;Garrett and Sobel, 1999).…”

Editorial: My Personal Benefits from Doing Good While Doing OR

“…The social and economic costs of gambling addiction are huge and largely uncounted. For example, Grinols and Mustard (2006) measure the increased crime resulting from opening casinos.…”