Economic Benefits Of Casino Gambling

Although religious and moral objections have opposed gambling for centuries, there are real social and personal benefits from gamblling.

Economic Benefits Of Casino Gambling Center
Benefits Of Casinos

The purported economic benefits from casino gambling include tax revenues, increased employment, higher wages and payments to capital, and enhanced economic growth. These benefits, should they occur, are not necessarily without costs. For example, the casino industry may partially or entirely “cannibalize” other industries.
Sep 06, 2018 Most places where casino gambling has been legalized have realized that this fun and potentially lucrative form of entertainment provides lots of positive benefits for their economy. Having a casino can create a fun social outlet and can be of huge benefit to the surrounding area as well.

How often do you see “experts” mention the benefits of gambling on the news or in business conference settings? For that matter, how often do the universities teach students about how great gambling is? And what about the churches?

Economic Benefits of Gambling. Imagine a community where gambling is being promoted or supported. Jobs for the residents become available, tourism industry is alive because there is a lot of recreational and cultural opportunities and many historical buildings are being preserved.

Although more than 1 billion people gamble each year (about 1/7 of the world’s population), many religious people argue that gambling is sinful. While various religious traditions differ on why they oppose gambling, among Christians the gambling stereotype has long been used to depict a major sin. Oddly enough, the Bible has nothing to say about gambling, although many people mistakenly believe that gambling is a sin.

Some Christian writers reinterpret the many of passages to support their arguments against gambling. The Bible’s warnings against “loving money” more than “loving god” have nothing to do with gambling; a businessman who never gambles can love money. A poor person with no income can love money. Sadly many generations of devout people have been misled into thinking that gambling itself is a sin.

On the other hand gambling has been the ruin of many a man — there is no doubt about that. Science has shown that gambling addiction is real and it causes severe changes to brain function and chemistry. People who cannot stop gambling truly cannot – and they need to seek help for their gambling addiction.

And perhaps because of these many concerns, many people do ask what are the benefits of gambling. Below you’ll find some of the good benefits of gambling. The list is not exhaustive. Nor is it intended to be a full-throttle rebuttal against anti-gambling arguments. People should be aware that despite its darker side gambling does provide real value to society in many ways.

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Here are 7 benefits of gambling anyone should appreciate:

Local Economies Benefit from Gambling Business
People Use Gambling for Fun and Entertainment
Modern Casinos Offer Safe Environments for Gambling
Some People Do Win Money from Gambling
Government Tax Revenues Rely on Gambling
New Income Opportunities Arise in the Gambling Industry
Gaming and Play Include Gambling

1. Local Economies Benefit from Gambling Business

The more people who gather in an area the more economic activity they create. People exchange goods and services, or they exchange money for goods and services. Local populations gain jobs, new customers, and sell more goods and services when a casino opens in their community. And these people spend the money they earn in their own local economies.

Newly built casinos create many opportunities for their local workers and business businesses. And because they attract large numbers of travelers casinos help local hotels and other tourist attractions. Much of the money these people lose at the casinos is spent on those employees and local services.

2. People Use Gambling for Fun and Entertainment

Yes, you will probably lose money when you gamble but if you have fun doing so, what is the difference between losing $200 at a casino and spending $200 on expensive tickets for a show or sporting event? You still had fun. You still went home safe and satisfied.

If you can live without the gambling but enjoy it — you’re probably okay. If you only gamble with money you can afford to lose, and not with money you need for bills and to live on — you’re probably okay. Gambling is a great group activity for friends and family, and many groups do organize special gambling trips to casinos that are maybe a few hours’ drive away.

3. Modern Casinos Offer Safe Environments for Gambling

Sure, there are seedy backroom gambling parlors where people you would not want to cross come to gamble, but that stereotype has been put down in many places by large, professional casinos. The casinos hire security guards, monitor their parking lots, and take precautions against violent crime afflicting their patrons. Yes, crime still happens around casinos but it is rare and police are usually close by.

No place is truly safe but a large gambling pavilion like a casino or race track offers a safe environment in which to eat, enjoy live shows (or sometimes closed-circuit broadcasts), and generally to have an enjoyable experience. You may even win some money.

4. Some People Do Win Money from Gambling

Yes, there are always winners in gambling. I don’t mean “the house always wins”, although that is most often true. I mean that every day casinos and racing tracks pay out large sums to people who “beat the odds”. So you just may find yourself with an unexpected, delightful windfall.

Winning at gambling is not easy and it’s a hard lifestyle for those who practice it full-time. Gambling is a feast-or-famine proposition for many professionals, but some people believe they can beat the odds consistently by mastering the skills of poker and blackjack.

5. Government Tax Revenues Rely on Gambling

If you pay taxes on your gambling winnings then you are being a good citizen. But there is another form of gambling that contributes to government revenues: government-run lotteries. Lottery games like Powerball and Mega Millions, not to mention thousands of scratch off games, generate billions of dollars in revenues for states every year.

The lottery is a self-imposed tax. It doesn’t generate enough money to replace the income tax but it certainly makes a big difference in state budgets. Of course, the original justifications for running state-run lotteries included funding educational initiatives. But critics have warned that when economies turn bad governments turn to their lottery revenues to fund other needs.

While using lottery revenues for non-educational purpose may not be a bad thing, it is a political hot potato that must be handled carefully. Constituents want to know that their money is being handled responsibly by their government representatives.

6. New Income Opportunities Arise in the Gambling Industry

Believe it or not, there are people who make money off of gambling without gambling. These are the gambling sites affiliates who review online gambling sites and brick-and-mortar casinos. The gambling affiliate industry lives in a shadowy corner of the law, somewhat overlooked by precise laws that stipulate who can earn money from gambling and who cannot. You’re allowed to take payment for advertising. It’s not your responsibility to make sure that players and gaming providers comply with the law.

The affiliate industry is much larger than gambling. Online affiliates sell everything from books to expensive cars. They offer furniture, vacation deals, discount coupons, and just about everything you can imagine.

7. Gaming and Play Include Gambling

Gambling is gaming. An Introduction to the Science of Games says that:

Game play is an important part of human behavior but it has taken on more importance than in the individual person’s development. For example, we use the Olympic Games to bring whole nations together in a celebration of fair and brotherly competition. Hundreds of millions of people follow the Olympic sports and other international gaming compatitions closely even though doing so does not enhance their survival or chances of surviving.

Human game play is thus special because it has gone beyond preparing us for life; we now use games to enhance our lives.

“We use games to enhance our lives” is a very apt statement indeed. I think I have shown that games — even gambling — does indeed enhance our lives in many ways.

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The cost benefit analysis

Each time casino legalization or expansion is considered, similar issues come up. Casino proponents argue that casinos will create tax revenues, jobs, and can push average wages higher.

Opponents argue that the social costs, such as crime, industry “cannibalization,” and problem gambling, outweigh the potential benefits. Both sides discount the opposition’s claims. So what does the research show?

When it comes to the economic benefits of casinos, there have been several studies on economic growth, employment, and wages. Perhaps the most comprehensive study on employment and wages was done at the US county level.

Controlling for a variety of factors, the results showed that counties with casinos have higher employment (by around 8%) than those without; wages were slightly higher in casino counties.

There is also published evidence that casinos have a positive impact on state-level economic growth, though that evidence has not been consistent over time.

Tax benefits

Perhaps the most important political benefit of casinos is tax revenues. Although in most states legalized gambling provides a very small proportion of state tax receipts (usually far less than 5%), casino taxes do make it easier for politicians to avoid spending cuts or other tax increases.

Benefits Of Casinos

In Massachusetts, one of the motivations for casino legalization is that many Bay State residents gamble at casinos in Connecticut and Rhode Island. If new casinos keep hundreds of millions of casino revenue in the state, that means additional tax revenue for the state.

Problem gamblers

On the cost side of the equation, researchers agree that the majority of costs are attributable to problem gamblers, who make up around 1% of the population. These people develop a variety of problems, including reduced employment productivity; financial problems, bad debts and bankruptcies; committing crimes to get money for gambling; and lying to friends and family.

Interestingly, the spread of casinos across the country may not have caused a significant increase in the prevalence of problem gambling. Research has suggested that when casinos expand in an area, there is a short-term increase in the problem gambling rate, but that the rate levels off over time. The result has been a fairly stable prevalence of problem gambling across place and time.

Since the 1990s researchers have been trying to put a monetary value on these social costs of problem gambling. Unfortunately, such measurement is tricky.

Researchers have estimated that around 70% of problem gamblers have other problems, such as drug or alcohol abuse. Thus, it becomes impossible to attribute social costs specifically to the person’s gambling problem. Nevertheless, the scientific literature on the types of difficulties associated with problem gambling is well-developed.

Crowding out competitors

Casino critics typically argue that casinos will harm other industries. This is so-called “industry cannibalization.” The fact is that any new business that competes with existing businesses does the same thing. This is simply a part of market economies.

One can sympathize with existing firms; they never like having more competition. But in the end, a new casino creates a new option for consumers. If they didn’t enjoy gambling, consumers wouldn’t spend their money at casinos.

What about casinos’ impacts on lotteries? There have been recent claims that casinos could significantly harm the Massachusetts lottery. Recent empirical evidence from a study we did in Maryland tends to contradict this.

We found that the establishment of casinos in Maryland led to about a 2.75% decrease in lottery sales. This is hardly a major impact, but it is nothing to sneeze at.

Massachusetts has the most successful lottery in the country, and casinos will probably have a small negative impact on lottery sales. On net, though, gambling tax receipts will almost certainly increase with casinos.

How, then, to assess impact

Policymakers in different parts of the country have taken different approaches to understanding the impacts of casinos. Some states have commissioned comprehensive studies, while others have acted without much empirical evidence. Massachusetts has commissioned a comprehensive multi-year study of the economic and social impact of the introduction of casino gambling.

It’s true that casinos have a variety of impacts on their host communities; they create both costs and benefits, both of which are probably less important than casinos’ strongest supporters and opponents claim.

But from a purely economic perspective, even considering the difficulties in measuring them, the benefits from casinos likely outweigh the costs – with the key benefits being those to consumers who like casino gambling.

This article is part of a series on gambling in America. You can read the rest of the series here.