Despite high hopes, casino’s economic payoff not sure bet

My work in the gaming markets in Louisiana demonstrates that for a region to benefit economically, at least 60% of the customer base must come from outside the region.

For example, the casinos in Shreveport draw from Texas, Oklahoma and Arkansas and generate a positive economic benefit for Northwest Louisiana. Customers for the casino in Baton Rouge are largely local, so the net impact is negative (even before you factor in the socials costs).

In Cleveland and Toledo’s case, these casinos are late to the game and will not be able to hit the 60% threshold.

The immediate benefits — higher revenues to local entities, and casino jobs — will mask deeper negative impacts: wealth transfers from Cleveland residents to casino owners and social costs.

These social costs will hit inner city neighborhoods most severely. These costs are highest in neighborhoods closest to the casino. The criminal costs of gaming may appear low at first, but research suggests they increase over time. (Grinols and Mustard, Casinos, Crime and Community Costs: 2004)

Casinos, Crime, and Community Costs

You can download a report reviewing the literature on gaming, prepared for Fort Wayne in 2009 here.

The Kentucky Youth Association, an independent advocacy group for children and families in Kentucky, has also published a useful three page policy brief that can help Cleveland prepare for what’s next: The Social Consequences of Legalizing Gambling in Kentucky .

In Massachusetts, there has also been recent concern over social costs of gambling: Downside of gambling raises worry

You can access the New Hampshire study here.

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