Published:  12:30 AM, 08 October 2019

Effects of casino business in local economy

Effects of casino business in local economy

Mini-casinos are being allowed in the commonwealth and local municipalities in the Susquehanna Valley have been voting on whether or not to allow a casino to come to the area.

But will local economies improve if a casino opens? Most studies show a positive economic impact when a casino opens in a specific area, however some studies do not.

I would not pay much attention to either side. As somebody who has studied economic impact studies extensively, I can assure you that any there are many who will manipulate the numbers to show how great or terrible an entity will be for an economy.

Let us instead use some economic logic to think through this issue. We will start with a claim that bringing casinos to an area will have a negative economic impact.

Claims like this one by PBS Frontline can be found on many anti-gambling websites: "Two studies of the riverboat casinos in Illinois concluded that for every one job created by the riverboats, most of the surrounding communities probably lost one or more jobs "While many other anti-gambling proponents make similar claims, it does not hold up to logical scrutiny. In order for a casino to actually have a negative economic impact, two things initially have to occur.

One is that a casino would reduce the economic activity of at least some other local businesses. For instance, people who choose to go to a casino could have instead gone to a movie, out to dinner, to a high school theatre performance, or spent their money at other local places.

Over time this would lead to a negative impact on local businesses. But even if some local businesses are worse off, it is not a given that an area will lose jobs. For that to happen, the casino would have to send more of its revenue out of the local area than the other local businesses.

Suppose people decide to go to a casino and spend $100 there instead of at a restaurant. The casino (and previously the restaurant) will enjoy some of that $100 as profits, with the rest going to workers, equipment, food, materials, etc. For casinos to have a negative impact, they would have to send more of their money out of the local area for these purchases. While it could happen, it is not obvious that it does.

The writer is a poet and columnist

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