Contributions of Casino-Style Gambling to Local Economies

Abstract

This study examines the underlying economic and political dynamics that have led to the rapid proliferation of permitted gambling in the United States and other countries over the past decade. It notes that much of the justification for gambling has come from an attempt to exploit the economic rents and spillover benefits that accompany the legalization of gambling, and little is accorded the value that accrues to consumers of the commodity. A framework is developed to evaluate the impact of such considerations on the community and the region where gambling is permitted. Different types of casino-style gambling—destination resort casinos, urban casinos, and widely dispersed gaming devices—are evaluated in light of their relative impacts.

Do casinos export bankruptcy?

“…12 We also considered average job tenure in our empirical models. Eadington (1998), local casino gambling can have ambiguous effects on local personal bankruptcies. The large presence of casinos in these states may lead to increases in income and employment that are sufficient to reduce the incidence of bankruptcy.…”

“…Indeed, the growth in casino gambling even led to a federal government inquiry into the consequences of expanded gambling (National Gambling Impact Study Commission, 1999). Due in large part to work by Eadington (1998Eadington ( , 1999, it is generally agreed that destination resort casinos provide the greatest economic benefit by "exporting" casino gambling, i.e., attracting tourists and bringing in dollars from outside of the community. resort is an important factor in determining its cost-benefit ratio.…”

“…We also explore whether bankruptcy rates in the three casino resort states are higher than other states, both nationally and regionally. As noted in Eadington (1998), casino gambling may lead to an increase in local bankruptcies, or conversely, it may reduce bankruptcies via an increase in economic growth resulting from casino gambling. We obtain state-level non-business bankruptcy filing data (Chapter 7 and Barron et al (2002) and others that visitors to destination resort casinos take their problems home with them, we would expect higher bankruptcy rates in states that have a greater number of per capita visits to these casino destinations.…”

“…7 Classification as a casino resort is done by authors and is based on the definition of a destination casino resort stated by Eadington (1998 Meister (2005).…”

“…Destination resort casinos create the greatest number of jobs, tax revenue and other economic benefits (Eadington, 1998(Eadington, , 1999. By attracting visitors from outside of the region, destination resort casinos effectively export gambling services to those regions where tourists originate.…”