A Role of Casino Gaming Industry

Introduction

The casino gaming industry has become a form of entertainment for millions of Americans. In fact, Las Vegas, considered the home of casino gambling, ranks third only to Disneyworld and New York for tourism, with 260 million visitors yearly. While it is true that casinos generate billions of dollars in revenue, hardly any of that makes it back to the local economy, as promised by the lobbyists advocating for casinos to be built in a city. This essay explores the economic, social, and personal impacts of the casino gaming industry, focusing on both the benefits and the hidden costs.

Economic Impact

The effects on local economies include the creation of construction jobs as well as hospitality jobs within the casino. While it is true that jobs are created, they usually go to people outside the communities. The lobbyists for these huge casino companies argue that casinos will revive a dying economy if allowed in their cities. Contrary to this claim, Atlantic City has the highest unemployment rate in New Jersey. They claim restaurants, movie theaters, and other local businesses will benefit, but the opposite is often true. Who would eat at a local restaurant when the casino offers free meals and drinks to gamblers? By 1996, Atlantic City devoted 318 million dollars to promotional food and drinks. Additionally, in Atlantic City, over 900 of the 2100 small businesses closed, and the number of local restaurants decreased from 243 to 146 (Smith, 1998). Richard Byron, President of the Federal Reserve Bank of Boston, describes gambling expenditures as "Money Extracted From Other Consumer Spending" (Byron, 1995).

Social and Personal Impacts

When casinos come into a small community such as Atlantic City or Biloxi, the local residents begin to frequent the casinos for entertainment instead of movie theaters, restaurants, and other places they used to visit. In 1994, more people went to casinos than to major league baseball parks, and more money was spent on gambling than on books, albums, and theme parks (Jones, 1994). It also affects real estate values; in Atlantic City, the average cost of a house dropped by $24,000 after the casinos were built, and by $11,000 in cities close to Atlantic City (Davis, 1997).

Crime and Addiction

The reason for these economic challenges may be due to increasing crime rates. Casino lobbyists would have everyone believe there is no change in crime statistics after they come in, but this is not true. The American Insurance Institute estimates that 40% of all white-collar crimes have their roots in gambling (Johnson, 1996). Compulsive gamblers will bet until they have nothing left: savings, family assets, personal belongings—anything that can be pawned or sold. They will borrow from co-workers, family, friends, or banks but will rarely admit that it is for gambling. They will borrow themselves into bankruptcy. In South Dakota, the state has experienced increases in chapter seven bankruptcies. But personal debt is not the only problem for compulsive gamblers. In the same two years, the bankruptcy rate increased in South Dakota, and the number of divorces increased nearly 6 percent. Also, child abuse and neglect are high among the crimes that compulsive gamblers commit (Williams, 1998).

Gambling's Broader Impact

A study of the impact of casino gambling on Atlantic City and surrounding areas found that not only did crime spill over to surrounding areas, which were easily accessible from Atlantic City, but some of the areas had no measurable economic benefit from casino development (Miller, 1999). The fact that gambling leads to crime has even been measured. In 1994, the national crime rate fell by 1 percent, while in the 31 places that got new casinos, there was a 7.7 percent increase in crime (Clark, 1995). Governments are creating environments where normal people, without a criminal background, are being lured into activities that could lead them to commit serious crimes. The average compulsive gambler who resorts to crime to support his or her habit is usually someone with a good job, better-than-average intelligence, and stable relationships. According to a 1992 report by the Minnesota state planning agency, about 60 percent of all pathological gamblers engage in crime to support their habit (Baker, 1992).

Conclusion

In conclusion, the casino gaming industry is clearly an important provider of jobs, wages, and taxes for the U.S. economy. The jobs created are well-paying and match the national average wage, exceeding the average wages of several other industries. Furthermore, the casino gaming industry creates additional jobs in domestic supplier businesses. But at what price? The state and local governments lose on this deal. Compulsive gamblers cost the state an enormous amount of money each year, and with the number of problem gamblers growing, this is a problem that will not go away. The illegal gaming market is so enormous that its profits each year surpass those of the top 100 American corporations combined. This includes IBM, all the automotive industries, and many more. The gambling industry makes a lot of promises it knows will not be fulfilled. However, once the revenues are tasted by the local governments, they can never turn back. They have lobbyists in Washington as well as on local levels. It's not like the old days of bookies and craps houses; now it's huge business. The owners of the casinos are the same owners of movie companies and amusement parks; to them, they are all just forms of entertainment. If people could learn to play responsibly, there wouldn’t be much harm, but when you need to win, you have already lost.

References

Baker, T. (1992). Minnesota state planning agency report on pathological gambling. Journal of Gambling Studies, 8(3), 201-215.

Byron, R. (1995). Economic effects of gambling on consumer spending. Federal Reserve Bank of Boston Report.

Clark, P. (1995). Crime rates in new casino areas. American Journal of Criminal Justice, 19(2), 145-158.

Davis, L. (1997). Real estate impacts of casinos. Urban Economics Review, 12(4), 300-312.

Johnson, M. (1996). White-collar crimes and gambling. American Insurance Institute Report.

Jones, S. (1994). Gambling vs. other entertainment spending. Entertainment Economics Quarterly, 6(2), 50-67.

Miller, J. (1999). Economic benefits and costs of casino gambling. Atlantic City Economic Review, 14(1), 90-105.

Smith, R. (1998). Impact of casinos on small businesses. Small Business Economics Journal, 10(3), 155-170.

Williams, G. (1998). Social costs of gambling addiction. Social Work and Society, 5(1), 45-60.