The Economic Impact of Casinos on Local Communities
Commercial casinos and tribal casinos generate a substantial amount of revenue for local and state governments, which in turn funds operations, programs, and services provided by those governments.
However, understanding the economic effects of casinos on local communities requires thorough analysis and empirical testing. This article examines some commonly cited factors to determine whether casino establishments benefit or harm both their host and neighboring communities’ economies.
Increased Taxes
Casinos provide economic and social benefits to local communities, but there are costs associated with their presence as well. These include traffic congestion, increased demand on public infrastructure (roads, schools, police and fire protection), environmental effects as well as displacement of local residents.
Casinos also have a substantial effect on state tax revenues, due to their higher-than-average sales taxes. For instance, Missouri levies an 18 percent tax on adjusted casino revenue and another 2 percent for local city governments.
States often turn to gambling when seeking additional tax revenues, especially during economic downturns and recessions when they need new ways of raising money.
Job Creation
Due to the growing number of states that have legalized casinos, many people are wondering what impact they will have on local communities. The answer is that jobs created at a casino can be enormously beneficial for an area.
However, this benefit can also have its drawbacks. When a community seeks to attract new casino development, it must consider how its workforce in the long run will be affected.
Workers often need to travel from their local community or commute in order to work at a casino site. As such, research on the employment effect of commercial casinos suggests that smaller counties are more likely to experience job growth than larger ones.
Another way gambling affects a community’s economy is through tax revenue. State governments and proponents of casinos often tout casino taxes as an additional source of revenue.
Increased Retail Sales
Casinos provide a large number of jobs for local residents. Generally, they employ people to work at tables, bartenders, security personnel and more – helping the economy by decreasing unemployment in the area.
Furthermore, casinos generate additional tax revenue for state and local governments. This has been a major reason why many states have approved commercial casino gambling.
Gambling has far-reaching effects that go beyond money; it can harm a person’s self-worth, relationships, physical and emotional health, work performance and social life as well as have negative repercussions on family members and communities.
Increased Tourism
Casinos are one of the major tourist attractions in many countries. Not only do they draw millions of visitors annually, but also contribute to a country’s economy by generating tax revenues.
However, the economic effects of casinos on local communities can be complex. For instance, if they are situated in rural areas, there may be a decline in local retail sales.
Non-local casino visitors tend to spend their money on items not in the area, which means they may not have as much disposable income for local restaurants and stores since their gambling expenses have already been covered.
Conversely, if a casino is situated in an urban area, local retail sales will likely increase due to increased competition. This can have either a positive or negative effect on local communities depending on how it’s utilized. Ultimately, residents have the power to decide which approach they wish to take with their casino.