How Do Casinos Affect Communities?
Giacopassi, David, Nichols, Mark, Stitt, B. Grant, Business Perspectives
To win cards, it helps to have the right combination. Similarly, communities need the right combination of elements to be successful.
Prior to 1976, Nevada was the only state where casino-style gambling was legal. In 1976, New Jersey entered the arena of casino gambling by allowing casinos to operate in Atlantic City with the intention of revitalizing the once-prosperous but, at the time, economically-troubled seaside resort. Other states have since legalized commercial gambling as a means of revitalizing economically-depressed communities. Those states include South Dakota (1988), Iowa (1989), Illinois (1990), Colorado (1991), Mississippi (1992), Louisiana (1993), Missouri (1994), Indiana (1995), and Michigan (1996). When the 31 states that contain Native American casinos are included in the count, an overwhelming majority of states have some form of casino gambling. Casino gross revenues (customer spending and gaming losses) for 1996 exceeded $19 billion in the United States. This amount is equal to about 10 percent of all leisure expenditures and is greater than the expenditures for all spectator sports, film box offices, and theme parks combined.
The rapid growth of casino-style gambling has been controversial. National opinion surveys tend to indicate that gambling is a complex issue with divided opinions. For example, a Gallup Poll found that only 41 percent of a national sample of adults were in favor of casinos coming to their communities. However, 63 percent were in favor of "resort casinos," indicating that a majority of respondents were not morally opposed to casino gambling but feared the negative consequences that might accompany the presence of a casino in their community. Crime is often the greatest fear. Gallup, for example, found that 76 percent of the public believe organized crime is involved in the casino industry.
Advocates, however, claim that casino-style games bring much-needed revenue, economic growth, and jobs to economically-depressed communities. Casinos frequently present themselves as a family entertainment destination featuring, in addition to gambling, inexpensive food, lodging, entertainment, theme parks, golf courses, movie theaters, and video arcades. Indeed, the use of the term "gaming" to define their product reflects the belief that visiting a casino is a form of entertainment.
Opponents of casino gaming, on the other hand, claim that increased social costs, including crime and problem gambling, outweigh the economic benefits. Casino gambling, more than the lottery or pari-mutuel racing, is thought to be injurious to the moral fabric of a community. Casino gambling is also the form of gambling most associated with problem gambling. Moreover, the free alcohol, paycheck cashing promotions, ready access to credit card and bank machines that provide immediate cash, and other marketing programs implemented by the casinos are all seen as promoting irresponsible behavior and preying on the weaknesses of others.
Because casino gambling is a relatively new phenomenon in most areas of the country, few studies have systematically examined casino gambling's impact on crime or other aspects of community life. The costs and benefits of casino gambling are fiercely debated, but, unfortunately, this deliberation is most often done by those with a strong pro- or anti-gambling agenda. Serious academic research on casinos and casino gambling is scarce. Yet, what impact casinos have on the social and economic fabric of a community is a question of some social importance.
In response to the need to address the above issues, the National Institute of Justice (the research arm of the Bureau of Justice) has funded a $252,000 research project at The University of Memphis and the University of Nevada, Reno, to study the impact of casinos in new casino jurisdictions. The research will study eight new casino jurisdictions (Sioux City, Iowa; St. Joseph, St. …