Casino Gaming Economic Impact

There is much debate about the casino gaming industry and its economic impact on regional economies. Proponents argue that casinos bring in tax revenues, create jobs, and can push average wages higher.

Opponents, however, point out that gambling is associated with a number of social costs that are hard to quantify and measure. These costs include reduced employment productivity, bad debts and bankruptcies, crime, and problem gambling.

Employment

Despite a recent drop in the number of casinos, casino gaming remains a strong economic engine for many communities. In particular, it generates employment and increases local tax revenue, enabling local governments to provide more services.

Casinos also produce an additional level of local income by causing patrons to spend their wages on goods and services in the community. This enables local grocery stores, clothing stores and other businesses to hire more workers.

While casino gambling does provide benefits, some societal effects can be problematic, including problem gambling and impulsive risk-taking behaviors. These effects are difficult to measure and can have significant costs for the individual, family members, employers and society at large.

Taxes

A state may impose taxes on gambling activities in order to increase revenue and support state operations. These include license fees, gaming taxes, taxes on the operation of casino and racino facilities, and gambling tax relief.

Casinos are viewed by many as a way to generate tax revenues for state and local governments, stimulate tourism and increase retail sales in local communities. They are also a key source of employment, particularly in rural areas with few other jobs available.

The impact of casinos on local retail sales, and thus retail sales tax collections, has received a lot of academic attention. However, empirical testing is required to determine the extent of any decrease or gain in retail sales due to casinos.

A state’s gambling revenues may rise in the short-run as new facilities and gambling activities are opened, but these yields can deteriorate in the longer-run. This decline may be caused by saturation of the market, competition between different forms of gambling, or other factors.

Retail Sales

Casino gaming offers an infusion of revenue for cash-strapped cities, states and countries, with commercial casinos legal in 12 states as of 2008. Supporters of commercial casinos argue that, in addition to generating significant taxable income and creating jobs, they help boost sales at nearby businesses.

Opponents, however, claim that a casino keeps customers away from area businesses by providing a self-contained entertainment, dining and shopping experience. It also encourages a host of undesirable social behaviors.

The impact of gambling on the retail sales situation has received considerable attention in academic literature. Generally, a casino’s influence on local retail sales is determined by how much of its clientele is local and how many visitors come from outside the region.

A recent study suggests that casino gaming has a positive impact on local retail property values, particularly for properties located within five miles of a commercial casino. The researchers examined the effect of three Detroit commercial casinos, clustered within the city’s urban core and located close to numerous retail and restaurant businesses.

Tourism

Casinos are a great way to boost tourism in countries, as they can bring in a lot of people at once and concentrate them in one area. This can be beneficial to the other industries in that area as well.

Tourists are also attracted to casinos because they provide them with a great gaming experience and ambiance. This makes them want to go back again and again.

Another positive impact of casinos is that they increase jobs for the community. These jobs are vital for a struggling local economy and help to bring down unemployment rates, as well as average wages in the area.

In addition, gambling can be a good way to generate tax revenue for the community. This helps fund local infrastructure and other projects that are important to the community. It also allows the government to avoid cutting spending and taxes elsewhere in the economy.