During the past two decades, the casino industry has expanded dramatically. There are now nearly 1,000 commercial and tribal casinos in the country. Plans to expand casino gaming are typically controversial. Share your viewpoints and Write For Us Online Casino based stories here.
The cost benefit analysis
Each time casino legalization or expansion is considered, similar issues come up. Casino proponents argue that casinos will create tax revenues, jobs, and can push average wages higher. Opponents argue that the social costs, such as crime, industry “cannibalization,” and problem gambling, outweigh the potential benefits. Both sides discount the opposition’s claims. So what does the research show?
When it comes to the economic benefits of casinos, there have been several studies on economic growth, employment, and wages. Perhaps the most comprehensive study on employment and wages was done at the US county level. Controlling for a variety of factors, the results showed that counties with casinos have higher employment (by around 8%) than those without; wages were slightly higher in casino counties. There is also published evidence that casinos have a positive impact on state-level economic growth, though that evidence has not been consistent over time.
Tax benefits
Perhaps the most important political benefit of casinos is tax revenues. Although in most states legalized gambling provides a very small proportion of state tax receipts (usually far less than 5%), casino taxes do make it easier for politicians to avoid spending cuts or other tax increases.
Problem gamblers
On the cost side of the equation, researchers agree that the majority of costs are attributable to problem gamblers, who make up around 1% of the population. These people develop a variety of problems, including reduced employment productivity; financial problems, bad debts and bankruptcies; committing crimes to get money for gambling; and lying to friends and family.
Interestingly, the spread of casinos across the country may not have caused a significant increase in the prevalence of problem gambling. Research has suggested that when casinos expand in an area, there is a short-term increase in the problem gambling rate, but that the rate levels off over time. The result has been a fairly stable prevalence of problem gambling across place and time.
Crowding out competitors
Casino critics typically argue that casinos will harm other industries. This is so-called “industry cannibalization.” The fact is that any new business that competes with existing businesses does the same thing. This is simply a part of market economies.
One can sympathize with existing firms; they never like having more competition. But in the end, a new casino creates a new option for consumers. If they didn’t enjoy gambling, consumers wouldn’t spend their money at casinos.
Competing too closely
Casino sceptics frequently claim that other industries will suffer because of casinos. The term "industry cannibalization" applies here. The truth is that every new company that faces off against an established one does the same thing. Simply put, market economies include this. Existing businesses can be understood because they do not enjoy more competition. Yet in the end, a new casino gives customers a new choice. Customers wouldn't spend money at casinos if they didn't enjoy gambling.
Yet, from a purely economic perspective, even accounting for the difficulties in appraising them, the benefits of casinos are likely to outweigh the drawbacks, with the greatest benefits accruing to patrons who like casino gambling. Have anything to share about casinos, do Write For Us Casino based viewpoints.