Research & Commentary: Economic Impact of Casino Development

Published December 16, 2011

During its 2012 session, the Florida legislature will consider bills to allow the construction of large destination casino resorts in Broward and Miami-Dade Counties. Gambling is already widespread in Florida: animal racing, jai-alai, and other smaller pari-mutuel enterprises cater to locals, and one existing casino resort, owned by an Indian tribe, attracts a limited number of out-of-state visitors.

Proponents of the legislation contend it will bring about significant growth in Florida’s economy. They cite research supporting the notion casinos foster economic development and new jobs while attracting tourists, so important to the state’s economy. They also say there’s very little evidence casinos increase crime.

Opponents of the gaming bill argue the new “mega casinos” would funnel all the benefits to the state government while the local communities would be stuck addressing the enormous traffic, infrastructure, law enforcement, and social costs of the new resorts. They also note that in places such as Las Vegas and Atlantic City—where gaming is already very widespread—new casinos can end up getting most of their business by taking it from existing gambling enterprises.

The following articles examine the economic development effects of casinos from several perspectives.

Casino Gambling as an Economic Development Strategy
Terance J. Rephann, Margaret Dalton, Anthony Stair, and Andrew Isserman use quasi-experimental control group methods to study 68 counties where casinos were opened in 1989–1993 and three multi-casino counties in the same time period. Results show casino gambling tends to be adopted by economically struggling counties and can be a successful economic development strategy.

Economic Impact of Casino Development
Heather Brome of the New England Public Policy Center at the Federal Reserve Bank of Boston summarizes data on state revenues from gaming in New England and provides a review of the literature on the potential secondary impacts of casinos on local economies.

The Regional Economic Impacts of Casino Gambling: Assessment of the Literature and Establishment of a Research Agenda
This report, commissioned by the National Gambling Impact Study Commission, assesses the many studies on the economic impacts of casino gambling/gaming.

Gambling with the Numbers,0,138059.story
Nick Sortal of the South Florida Sun Sentinel writes about several revenue projections for the proposed South Florida casinos.

Proposed Gaming Bill Would Have Negative Impact
Armando Codina writes in the Miami Herald about the potential negative consequences of the gaming bill and the construction of new destination casinos in South Florida.

On Casino Resorts Bill, Sponsors Set the Record Straight
Gaming bill sponsors state Sen. Ellyn Setnor Bogdanoff and state Rep. Erik Fresen explain the rationale behind their gaming bill and answer critics’ concerns.

Casinos and Economic Development: A Look at the Issues
Thomas A. Garrett of the Federal Reserve Bank of St. Louis examines several of the main issues facing governments in the casino development debate.

Do Casinos Cause Economic Growth?
Douglas M. Walker and John D. Jackson examine the relationship between casino gambling and state economic growth using Granger causality analysis modified for use with panel data. They found no Granger-causal relationship between real casino revenues and real per-capita income at the state level.