Journal of Gambling Studies

, Volume 31, Issue 2, pp 585–606 | Cite as

A Trade Based View on Casino Taxation: Market Conditions

Original Paper

Abstract

This article presents a trade based theory of casino taxation along with empirical evidence found from Macao as a typical tourism resort. We prove that there is a unique optimum gaming tax in a particular market for casino gambling, argue that any change in this tax is engendered by external demand shifts, and suggest that the economic rent from gambling legalization should be shared through such optimal tax between the public and private sectors. Our work also studies the tradeoff between economic benefits and social costs arising from casino tourism, and provides some policy recommendations for the sustainable development of gaming-led economies. The theoretical arguments in this article turn out to be consistent with empirical observations on Macao realities over the recent decade.

Keywords

Optimum gaming tax Trade equilibrium framework Market conditions Social costs 

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Copyright information

© Springer Science+Business Media New York 2013

Authors and Affiliations

  1. 1.Department of Finance and Business Economics, Faculty of Business AdministrationUniversity of MacauTaipa, Macao SARChina
  2. 2.Department of Management and Marketing, Faculty of Business AdministrationUniversity of MacauTaipa, Macao SARChina

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