The Impacts of Gaming Expansion on Economic Growth: A Theoretical Reconsideration
- 573 Downloads
This paper employs a general equilibrium framework to analyze the effects on economic growth of global expansions in casino gaming, which exports gambling services largely to non-residents. Both domestic and foreign investments in the gaming sector bring in not only substantial revenues but also positive spillover effects on related sectors and even on the entire local economy. However, an over-expansion of commercial gambling may lead to deterioration in the terms of trade with an adverse impact on real income. If this situation persists, it would not be impossible for immiserizing growth to occur. As a highly profitable sector, casino gaming may enable its operators to diversify out of this risk if they invest retained profits in non-gaming sectors to cash in on the spillover effects it has created. The gaming-dominant economy can then be directed on a more balanced and sustainable growth path, and will become less susceptible to business cycles. Indeed, economic experiences in the world’s major casino resorts are consistent basically with this argument for diversification. We believe that after the current global crisis fades away, economic growth and resulting surges in global demand for gambling services can provide further opportunities for the expansion of existing casino resorts and the development of new gaming markets.
KeywordsGambling services Economic growth General equilibrium Welfare analysis
- Analysis Group, Inc. (2005). A survey of urban gaming in America. Los Angeles, CA.Google Scholar
- Appleyard, D. R., Field, A. J., Jr., & Cobb, S. L. (2008). International economics (6th ed.). New York: McGraw-Hill.Google Scholar
- Carbaugh, R. J. (2009). International economics (12th ed.). Mason, OH: Thomson, South-Western.Google Scholar
- Caves, R. E., Frankel, J. A., & Jones, R. W. (2007). World trade and payments: An introduction (10th ed.). Boston, MA: Pearson Education.Google Scholar
- Christiansen, E. (2005). The impacts of gaming taxation in the U.S. Christiansen Capital Advisors LLC, American Gaming Association.Google Scholar
- Cotte, J. (1997). Chances, trances, and lots of slots: Gambling motives and consumption experiences. Journal of Leisure Research, 29(4), 380–406.Google Scholar
- Datamonitor. (2009). Casino & gaming in Asia-Pacific: Industry profile. Australia: Datamonitor Asia-Pacific.Google Scholar
- DICJ. (2006). Data-Statistics-2007. Retrieved July 5, 2008 from http://www.dicj.gov.mo/EN/index.htm.
- DICJ. (2007). Survey on Manpower Needs and Wages. Retrieved July 5, 2008 from http://www.dsec.gov.mo/index.asp?src=english/html/e_employment.html.
- DICJ. (2008). Data-Statistics-2008. Retrieved November 3, 2008 from http://www.dicj.gov.mo/EN/Estat/DadosEstat/2008/estat.htm#n1.
- DSEC. (2007). E-Publications—Tourism and Services—Visitor Arrivals. Retrieved August 5, 2008 from http://www.dsec.gov.mo/index.asp?src=/english./html/e_tourism.html.
- DSEC. (2008). E-Publications—Tourism and Services—Visitor Arrivals. Retrieved November 3, 2008 from http://www.dsec.gov.mo/index.asp?src=/english./html/e_tourism.html.
- DSEC. (2009). Gross Domestic Product—By Expenditure Approach. Retrieved October 15, 2009 from http://www.dsec.gov.mo/Statistic.aspx?lang=en-US.
- Ernst & Young. (2007). Global gaming bulletin (25th anniversary edition). UK: EYGM Limited.Google Scholar
- Ernst & Young. (2008). Reviewing the market: The 2008 global gaming bulletin. UK: EYGM Limited.Google Scholar
- Gu, X. H., & Li, G. Q. (2009). Why do various gaming markets adopt different tax rates? Journal of Gambling Business and Economics, 3(1), 65–88.Google Scholar
- Ho, J., & Jalal, K. (2004). City on fire: Macau real estate market. Macau Business, October, 18–22.Google Scholar
- Janson, D. (1989). Casino funds to aid project in urban areas. New York Times, January 15.Google Scholar
- Kilby, J., Fox, J., & Lucas, A. F. (2005). Casino operations management (2nd ed.). Hoboken, NJ: Wiley.Google Scholar
- Lau, A. (2007), Casino confessions: game is over. Macau Business, August, 18–22.Google Scholar
- MAM (Monetary Authority of Macao). (2009). Annual Reports for Year 2008, see its website at: www.amcm.gov.mo/Annual_Reports/Report.htm.
- Markusen, J. R., Melvin, J. R., Kaempfer, W. H., & Maskus, K. E. (1995). International trade: Theory and evidence. New York: McGraw-Hill.Google Scholar
- Rephann, T. J., Dalton, M., Stair, A., & Isserman, A. (1997). Casino gambling as an economic development strategy. Tourism Economics, 3(2), 161–183.Google Scholar
- Rose, A. and Associates. (1998). The regional economic impacts of casino gambling: assessment of the literature and establishment of a research agenda. Retrieved July 19, 2008 from http://govinfo.library.unt.edu/ngisc/reports/ecoimprpt.Pdf.
- Siu, R. C. S. (2007). Is casino gaming a productivity sector? A conceptual and cross-jurisdiction analysis. Journal of Gambling Business and Economics, 1(2), 129–146.Google Scholar
- Thompson, W. N., & Stream, C. (2006). Casino taxation and economic development: American lessons for Asian policymakers. Law, regulation and control issues of the Asian gaming industry (pp. 39–82). Institute for the Study of Commercial Gaming, University of Macao: Macao SAR.Google Scholar
- Tso, A. (2008). Stalled flight. Macao Business, July, 72–75.Google Scholar
- Varian, H. R. (2006). Intermediate microeconomics (7th edition): A modern approach. New York: W W Norton & Company.Google Scholar
- Walker, D. M. (2007). The economics of casino gambling. New York: Springer.Google Scholar
- Wynn, S. (1993). Legalized gaming: winners and losers. WLC Annual Meeting, September.Google Scholar