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  • Writer's pictureJesse Ledbetter

The Impact of Casinos on Local Communities: A Critical Perspective



Introduction

The debate surrounding the effects of casinos on local communities has been ongoing for years, with proponents highlighting economic benefits and job opportunities, while opponents raise concerns about social issues and potential harm. To approach this topic from a critical perspective, we'll explore various studies that shed light on the complex relationship between casinos and their impact on areas such as tourism, local labor markets, communities, housing markets, and crime rates. It's essential to acknowledge that this discussion is not exhaustive but aims to provide a foundation for informed opinions.


Tourism Benefits

Casinos have often been touted as a means of promoting tourism and driving economic growth. However, as noted by Eadington, the success of using casinos as a growth and tourism strategy has been mixed1. The effects of casinos on tourism can vary significantly depending on various factors, making it necessary to consider the broader context.


Local Labor Markets

  1. Industry Growth: Cotti's research indicates that the impact of casinos on industries related to them is somewhat mixed but generally mildly positive. Casinos can contribute positively to local employment and earnings in the surrounding community2.

  2. Jobs: Cotti's study further suggests that while some industries may experience small effects, the overall employment levels in neighboring counties are minimally affected by the presence of casinos2.

  3. Income: Economopoulos' research found that casinos tend to raise per capita income in urban areas but lower it in rural areas. However, there are significant gains in private employment, total employment, and retail employment. These gains, though, tend to erode over time3.

It is essential to consider the specific economic and demographic characteristics of the region when analyzing the impact of casinos on local labor markets.


Impact on Local Communities

The presence of urban casinos in low socio-economic communities has raised concerns about their impact on these areas. O'Gilvie's literature review highlights the following key findings4:

  1. Urban casinos are typically placed in disadvantaged communities with some existing gambling culture.

  2. Promised socio-economic improvements are often not sustainable in urban casino neighborhoods.

  3. Increased accessibility and availability of urban casinos could lead to gambling-related problems, negatively affecting host communities.

However, Schray's research suggests that well-designed casinos can act as anchors for street-level commerce in neighborhoods4. Moreover, O'Gilvie's study found that exposure to the casino did not significantly affect poverty-level outcomes in New York City over time4.


Housing Markets and Increase in Housing Costs

The relationship between casinos and housing markets is complex:

  1. Huang, Humphreys, and Zhou found that casino openings do not significantly affect the volume of housing applications or the economic profile of homebuyers. However, they are associated with slowdowns in the growth of average loan amounts, which is used as a proxy for house prices5.

  2. This research also suggests that casino openings can have a negative impact on the housing values of nearby communities5. The effect is substantial near casinos but dissipates quickly over distance.

  3. Interestingly, Wiley and Walker's study found that casinos can have a positive influence on retail property values within a 5-mile radius, suggesting a complementary effect on other businesses5.

Crime

One of the most debated aspects of casino impact is their influence on crime rates. Research in this area is mixed:

  1. Johnson and Ratcliffe's count modeling regression results indicate that the operation of a casino had no significant effect on various crime categories in the surrounding community6.

  2. Nichols and Tosun's research, however, suggests that initial increases in crime may be offset by significant decreases in crime many years later, explaining a long-term pattern6.

Conclusion

The impact of casinos on local communities is multifaceted and highly context-dependent. While some studies indicate positive economic contributions and minimal effects on crime, others highlight concerns about social issues and housing market dynamics. This complex interplay underscores the need for further research and a nuanced approach to evaluating the pros and cons of casino development in specific regions.


In forming opinions on this topic, it is crucial to consider the unique characteristics of each community and weigh the potential benefits against the potential risks. As with any complex issue, ongoing research and critical analysis are essential to making informed decisions about the role of casinos in local economies and communities.


For more in-depth information and analysis, you can refer to "The National Gambling Impact Study Commission" report available at here7.


Footnotes

  1. Eadington, W. (2003). The Spread of Casinos and Their Role in Tourism Development.

  2. Cotti, C. (2008). The Effect of Casinos on Local Labor Markets: A County Level Analysis. ↩2

  3. Economopoulos, A.J. (2015). EXAMINING THE IMPACT OF CASINOS ON ECONOMIC DEVELOPMENT: A SPATIAL ANALYSIS OF THE COUNTIES IN THE MID-ATLANTIC REGION.

  4. O’Gilvie, P.J. (2022). The impact of casino proximity on northeast urban communities: a literature review. ↩2 ↩3

  5. Huang, H., Humphreys, B.M., & Zhou, L. (2018). Urban Casinos and Local Housing Markets: Evidence from the US; Do urban casinos affect nearby neighbourhoods? Evidence from Canada.; Casino Revenues and Retail Property Values: The Detroit Case. ↩2 ↩3

  6. Johnson, L.T., & Ratcliffe, J.H. (2023). A partial test of the impact of a casino on neighborhood crime; The impact of legalized casino gambling on crime. ↩2

  7. "The National Gambling Impact Study Commission" report available here.

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