Purpose of Review
This paper is a review of the recent academic literature on the socioeconomic impacts of gambling. The purpose is to provide a review of the most recent contributions to the growing literature regarding the economic and social impacts of gambling, with a focus on casinos. We divide our review into two sections: economic impacts and social impacts.
Better data availability across a wider set of jurisdictions has resulted in improved research quality in recent contributions to this literature.
The most recent literature in this area suggests that casinos often have at least a modestly positive economic impact on their host economies. It is more difficult to measure the social impacts, and the net social impacts of casinos remain unclear. The variety of conclusions from recent research suggests that the industry’s impacts vary with characteristics of the hosting state, country, or regional economy.
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We do not believe there is an important distinction between the “economics of the casino industry” and the “economics of gambling”; since the casino industry facilitates gambling as its key service, gambling and the casino industry are synonymous vis-à-vis their impacts on society. However, we do acknowledge that lotteries and, to a lesser degree, pari-mutuel gambling may have social and economic impacts on society.
In addition to the academic studies on employment and wages, there are a variety of consulting reports performed for various governments (e.g., state governments such as Florida and Kansas). However, these studies are generally not reviewed here as they do not undergo a formal peer review process.
For a listing of 2015 casino tax rates, see the National Conference of State Legislatures list at http://www.ncsl.org/research/financial-services-and-commerce/casino-tax-and-expenditures-2013.aspx
Papers of particular interest, published recently, have been highlighted as: • Of importance •• Of major importance
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Forrest D. An economic and social review of gambling in Great Britain. J Gambling Bus Econ. 2013;7(3):1–33. This article surveys the impacts of gambling in Great Britain and estimates that consumer benefits are substantially greater than the social costs of gambling.
Walker DM, Jackson JD. Do U.S. gambling industries cannibalize each other? Public Finance Rev. 2008;36(3):308–33.
Gallagher RM. An examination of cannibalization effects within the riverboat gaming industry: the case of Illinois-area casinos. Growth Chang. 2014;45(1):41–59. This study finds that new riverboat casinos do indeed cannibalize business from existing riverboat casinos, but these impacts decline rapidly with distance.
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Johnson LT, Ratcliffe JH. A partial test of the impact of a casino on neighborhood crime. Secur J. 2014;Online First:1–17. This study uses neighborhood data for Philadelphia, and finds no significant impact of a new casino on violent street felonies, vehicle crime, drug crime, or residential burglary.
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Humphreys BR, Soebbing BP. Access to legal gambling and the incidence of crime: evidence from Alberta. Growth Chang. 2014;45(1):98–120. This study examines the link between crime and both legal casinos and VLTs, finding little significant results other than a slight increase in credit card fraud from VLTs.
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Cotti CD, Walker DM. The impact of casinos on fatal alcohol-related traffic accidents in the United States. J Health Econ. 2010;29(6):788–96. This study finds that casinos result in significant increases in drunk driving and fatal alcohol-related traffic accidents for rural counties but opposite in more populated areas.
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Barron JM, Staten ME, Wilshusen SM. The impact of casino gambling on personal bankruptcy filing rates. Contemp Econ Policy. 2002;20(4):440–55.
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Boardman B, Perry JJ. Access to gambling and declaring personal bankruptcy. J Soc Econ. 2007;36:789–801. This study finds that states that adopted lotteries and casinos prior to 1995 did experience significantly higher personal bankruptcy rates, but that the effect has disappeared since that time.
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Thanks to Elizabeth Mandell for research assistance.
Conflict of Interest
Dr. Walker reports personal fees from Gambling Research Exchange Ontario, personal fees from Kansas Lottery Gaming Facilities Review Board, personal fees from Maryland State Lottery & Gaming Control Agency, personal fees from State of Florida Legislature, outside the submitted work. Dr. Sobel has nothing to disclose.
Human and Animal Rights and Informed Consent
This article does not contain any studies with human or animal subjects performed by either of the authors.
This article is part of the Topical Collection on Gambling
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Walker, D.M., Sobel, R.S. Social and Economic Impacts of Gambling. Curr Addict Rep 3, 293–298 (2016). https://doi.org/10.1007/s40429-016-0109-8