Over the last twenty years or so, the casino industry in the United States has significantly expanded. The American Gaming Association asserts that there are about 1,000 tribal and commercial casinos in the U.S. now.
There are even plans to offer more casino games in a number of states, but this is still controversial. The Supreme Court made a decision in May 2018 to lift the ban on sports betting, and this has allowed more states to allow this form of gambling. Previously, Nevada was the only state in the U.S., where sports gambling was allowed. However, there are still some states that are not too happy about the fact that more gambling has been legalized in the country. The state of Massachusetts presents a particularly interesting case when it comes to gambling. Voters in the state were seriously thinking about implementing a measure that will overturn the legalization of casinos. The motion was voted on November 4, 2018.
Is There a Cost-Benefit To Casinos?
Every time state or local governments consider the notion of expanding or legalizing casinos, a number of issues arise. Those who are in support of casinos know that this will create jobs for individuals who live near the casinos. Casinos also create tax revenues and when there is more money coming into a region, average wages can be raised.
Those who are opposed to casinos say that there are social costs involved in expanding casinos. People who are skeptical about gambling also say that crime will likely become more common and that casinos will start to compete too harshly with each other. Problem gambling is also a concern, and those who don’t think gambling is a good idea to say that these negative factors are greater than the benefits that may come with gambling.
It has become clear that both sides clearly oppose the other, which means there can be significant conflicts among state legislation to make gambling legal in certain states.
The Benefits of Gambling, According to Research
What does research show about how beneficial gambling can be?
As far as the economic benefits that come with having casinos there have been several studies pertaining to employment, wages and overall economic growth. It is debatable that the most comprehensive study on wages and employment was conducted at the US county level. The survey looked at several factors, and the results revealed that counties that have casinos have 8% more employment than counties who do not have casinos. Wages were also a little higher in counties that have casinos.
Evidence has also been published that shows that casinos have an overall positive impact on economic growth for states. However, this evidence has not been consistent over time.
Tax benefits are the most obvious political benefits of having more casinos. For most states, legal gambling only provides a tiny portion of state tax receipts; in most cases, the amount is less than 5%. However, casino taxes do not make it more possible for politicians to stop tax increases or avoid spending cuts.
For instance, in Massachusetts, one of the motivating factors for the legalization of casinos is that a number of residents in the state gamble at the casinos in Rhode Island and Connecticut. If the casinos are able to keep hundreds of millions in casino revenue in their respective states, the state will receive additional tax revenue.
When it comes to the possible cost of gambling, researchers agree that most of the costs are due to problem gamblers. People who have a problem with gambling or who are addicted to this activity are about 1% of the US population. Problem gamblers can develop several issues, including reduced productivity in the workplace. Compulsive gamblers are also more likely to get into debt or experience other financial problems, including bankruptcy. Some gambling addicts even commit crimes to get the money they need to pay gambling debts. It is also common for problem gamblers lie to friends and loved ones about their problem until it is too late.
It is also important to note that problem gamblers are often dealing with other addictions and life issues as well. Some compulsive gamblers are also struggling with other addictions that provide a temporary “high” for them, including drinking and using recreational drugs. This is one of the main reasons rehab and counseling is often recommended for people who have a hard time with gambling.
Surprisingly, however, the increase of casino locations around the US may not have led to a vast increase in compulsive gambling. According to research, when casinos expand in a city or state, there is a short-term increase in the compulsive gambling rate. However, the rate goes back down over time. As a result, the rate of problem gambling has remained stable, regardless of time and place.
Researchers have been trying to put a monetary value on the social costs of compulsive gambling since the 1990s, but this can be challenging. According to research, about 70% of compulsive gamblers do indeed struggle with drug and alcohol abuse. This means that it is not possible to assign the social costs of gambling particularly to an individual is gambling problem. Still, the literature on the variety of difficulties that can sometimes come with problem gambling is well developed.
Drowning Out the Competitors
Those who are critical of casinos often say that casinos will cause harm to other industries. This is known as “industry cannibalization.” However, the truth of the matter is that any new business competes with existing companies in the same industry will do the same thing. This is a natural aspect of market economies.
It is easy to sympathize with firms that are already in business, since the companies do not enjoy having more competition to deal with. Ultimately, new casinos create new choices for gamblers and consumers. After all, patrons would not spend their money at casinos if they did not like to gamble.
Some people also wonder how casinos with impact state lotteries. Recently, there have been claims that casinos could significantly harm the Massachusetts lottery. Empirical evidence from a recent study in Maryland contradicts this notion.
Established Maryland casinos contributed to a decrease in lottery sales by about 2.75%. While this is not a huge impact, it is enough of an effect to pay attention. As of summer 2018, Massachusetts had the most successful lottery in the United States. Casinos will likely have a very small negative impact on lottery sales in the state. On net, however, gambling tax receipts will very likely increase if casinos are introduced to Massachusetts.
Assessing the Impact
Those who are in charge of establishing and enforcing policies in various parts of the United States have taken different approaches when it comes to an understanding of how casinos affects cities. While some states have decided to open casinos without reviewing the empirical evidence, some states have commissioned comprehensive studies. The state of Massachusetts has commissioned a comprehensive study that will last for several years. The study will explore the social and economic impact of the introduction of casino gambling.
It is true that casinos influence their host communities in several ways. Casinos can create benefits and costs, and both of these factors are likely less essential than both casino opponents and supporters claim.
From an economic standpoint, even taking the difficulties into consideration, casino benefits generally outweighs the costs of opening the businesses. The majority of the benefits will likely go to consumers who enjoy gambling at casinos.
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