Casino: Positive and Negative Impacts
Gambling is big business and an important industry from an economic point of view.
What kind of economic impact does the gambling industry have?
This question has been raised in recent years as new jurisdictions (in contrast to the established jurisdictions of Nevada and Atlantic City) consider legalizing new forms of gambling or expanding existing ones.
In August 1996, federal legislation created the national Gambling Impact Study Commission to examine the social and economic impacts of gambling in the United States.
One of the main difficulties in addressing the issue of gambling's economic impacts is the dearth of truly objective, unbiased research.
Critics of gambling and those who oppose it for a variety of reasons tend to focus on the economic and social costs associated with gambling and play down its positive aspects.
Like the casinos, for instance. The existence of casinos creates demand for the goods and services of non-gambling businesses.
Many of the businesses are unique to the gambling industry (for example, slot/video machine manufacturing, sales, and service; lottery ticket production) but many businesses that operate in a non-gambling context have branched out to serve this growing industry--- companies that provide interior design, funds transfer systems, signage, furniture, security, and advertising.
The casino industry experienced considerable growth and expansion during the 1990s.
That expansion was financed by a large investment of money. One study estimates that $12.8 billion was spent on new construction, expansion, remodeling, and refurbishment of casinos between 1993 and 1995.
Clearly, expenditures of this magnitude have reverberating effects throughout the economy.
In addition, local and state governments and the federal government receive approximately $2.9 billion in taxes from the total revenues of casinos.
That figure includes income, sales, and property taxes, but most of it (65 percent) is taxes paid on revenues from gambling, which vary from state to state and range from 3 to 20 percent.
An analysis of the economic impact of gambling has been done by Michael Evans, an economist at Northwestern University.
However, the Evans study was commissioned by International Game Technology, a major manufacturer of slot, video poker, and other gambling machines--- and it focused exclusively on the positive economic impacts of gambling.
Evans concluded that throughout the United States the recent establishment of casinos has resulted in a rise in employment and a decrease in unemployment. This study also stresses that tax revenues have increased as a result of legalized casino gambling. Also, he estimated that even if the number of casinos remains constant, total direct tax revenues received by state and local governments from casino gambling will rise to $5.3 billion by 2005.