PROS:                                                         CONS:

• Increased Tax Revenue                               Loss of Local Business
• Increased Jobs                                            Higher Crime Rates
• Increased Tourism                                      Affiliation w/ Organized Crime
• Redevelopment                                           Profits versus Costs
• Reduced Tax Property Rates for Residents   Cause of Urban Blight
• Urban Pride                                                Negative Externalities
• "Easy" Tax                                                 Low Wage Jobs

The images of Las Vegas-style casinos have been synonymous with organized crime, prostitution, and graft.  However, many of those images have been changing as an increasing number of casinos have been locating in communities across the United States.  Many people now associate casino gaming with nineteenth-century riverboats, weekend entertainment and local tax benefits.  These perceptions have slowly changed as the face of casino gaming has changed.  Much of this change is due to the efforts of local governments in attracting casino-style gaming as a form of economic development.  As legal restrictions to casino gaming have been relaxed, more communities have explored the possibility of allowing casinos to locate in the community in order to reap the financial benefits associated with casino development.

History

Gaming has been in existence for centuries.  In two previous "waves" of U.S. gaming, growth soon met a virtual elimination.  Confined to Las Vegas since the 1930s, the "third wave of gaming" began to emerge in the 1960s in the form of state lotteries.  Atlantic City threatened Las Vegas' hegemony as the only casino resort in the U.S. during the 1970s.  Now, the rise of new gaming facilities, primarily riverboat casinos and land-based Native American Reservation casinos, has surged.  Casinos are currently authorized or operating in 24 states, with nearly all of the remaining states considering the issue.

Why the growth?

The most important reason why localities pursue casinos as a form of economic development is to take advantage of the tremendous revenue potential casinos represent, while limiting the direct outlays of capital on the part of government.  Casinos are also viewed as generators of jobs.  Even though these jobs are generally low-skilled and low-waged, they are a popular way to reach out to the urban underclass.  Pursuing casino development also allows governments to increase tax revenues without raising taxes for local citizens and businesses.  Increased tourism is also an important aspect of casino development in the eyes of local government.  By creating a casino industry in a locale, many officials feel that it creates prestige and national recognition, and represents a dynamic local economy.

Why not?

Some of the problems associated with casinos are: cannibalization of revenues in other sectors, spiraling tax valuations, increases in organized crime, reliance on local gamblers rather than tourists, increased job opportunities for suburban residents rather than local residents, moral decline of area, and a negative national image.  There has been much research as to the problems associated with casino development.  One common argument is that economic growth is not synonymous with casino gaming due to the cannibalization of local industries as discretionary income is simply shifted from one industry to casinos.  Casino development also often leads to higher property valuations and resultant tax responsibilities, effectively pricing many properties out of alternative uses. Many researchers also feel that the only people who benefit are casino developers and land-owners who sell to casino interests, while the majority of the population experiences costs such as parking concerns, traffic congestion, housing shortages and the transfer of employees from existing industries.  Finally, casino towns gain an identity that is unique to the industry, an identity that is not consistent with the views of most residents.

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LINKS
Terance Rephann's "Casino Gambling as an Economic Devlopment Strategy"
Books about casinos

 

This page created by Rich Fletcher Maintained by DCRP Web Last Updated 15 April 1998