03/02/2021
"In a recent study, my colleague Lei Zhang and I examined the relationship between casino establishments and economic growth of counties in the 48 contiguous U.S. states from 2003 to 2012. We examined the short-term (three-year) and long-term (10-year) county-level economic growth rates.
Specifically, we compared the effects on real per-capita personal income and job growth rates of the counties with and without casinos. We found that the effects of casinos on economic growth to be positive but relatively small.
Casino expansion was estimated to have increased the short-term per-capita income growth rate by 0.4 percentage point and the long-term per-capita income growth rate by 0.5 percentage point in 2003-2012. But after controlling for spatial or neighboring-county correlation effects, the effect of casinos on the long-term income growth disappeared.
On the job side, casino expansion was estimated to have increase the 10-year salary job growth rate by 0.71 percentage point during the 2003-2012 period, and its effect remained but only at 0.67 percentage point after controlling for inter-county spatial effects.
Our study did not examine the negative externalities of casinos. The negatives of casino gambling are well documented. Those negatives include not only behavioral problems associated with gambling, but also other individual, family, social and economic problems.
Gambling availability is associated with increased problem and pathological gambling behaviors among individuals in the casino neighborhood. Also, casinos lead to higher crime rates, but those rates decrease with distance, and the proximity of casino gambling is found to be associated with higher bankruptcy rates.
Policymakers and community leaders/developers must bear in mind that the social costs of gambling remain an important issue in the casino debate. If the economic benefits are short term and small, but the harm to society is long term and potentially irreversible, rather than focusing on the temporary gains, one must weigh the benefits and costs in a comprehensive, holistic manner."
The social costs of gambling remain an important issue in the casino debate.