The legalization of casinos is a controversial issue. The stigma against gambling persists although perceptions about it being immoral are changing. Gambling does have some societal and economic costs that need to be considered when determining whether casinos are good for the economy. There are many benefits of casinos to the economy in terms of more job opportunities, more tax revenue to state and local governments, and growth in local retail sales.
Consistently increasing revenue
American voters are changing their attitudes toward gambling. They realize that tax revenue from casinos can have many positive effects on local communities and the economy. Playing casino games and sports betting has become widely popular in the United States over the past few years. The casino gambling industry generates over $325 billion a year according to the American Gaming Association (AGA). The revenue from online casinos is growing consistently. The size of the online gambling market in the United States rose to over $19 billion in 2023, which was an increase of about 28% from 2022.
Increase in employment
Various studies have looked at the relationship between casinos and job growth rates with mixed results. Commercial and tribal casinos support 1.8 million jobs. This includes jobs at casinos and in related businesses. These jobs generate over $100 billion in wages. Despite economic headwinds, casinos continue to provide jobs and drive economic activity. Casinos are some of the largest employers in the states, and they have major commitments in terms of wages and benefits. The industry provides more direct jobs than many other sectors. Employees use their wages to purchase goods and services which generates secondary economic activity.
Increase in casino tax revenue
Changes in GDP are a good indicator of overall economic health. U.S. GDP growth in the first quarter of 2024 increased by 1.4%, and in the second quarter, it increased at an annual rate of 2.8%. The casino industry generates $53 million in taxes, and states use that gambling industry tax revenue to fund local and state programs. Public education is one of the destinations for tax revenue in many states. Schools, infrastructure, and health care all benefit from casino tax revenue.
Growth in local retail sales
Much attention has been paid to whether casinos help or hurt local retail sales. If non-local visitors spend some time in a state gambling, dining out, going to shows, etc., then local retail sales will increase. Many casinos have restaurants, shops, hotels, and entertainment venues for casino customers. Various web apps provide them with personalized experiences and make purchasing easy. All items they buy are taxable under local and state sales tax laws. Casinos in rural areas may have less local retail sales than those in cities, which attracts many tourists.
Societal costs
It is also important to look at societal costs when considering whether casinos are good for the economy. The negative aspects of casino gambling are well documented. Is the money from casinos more than the cost of the economy of social issues such as gambling addiction? This can lead to financial distress for individuals and families. It can also result in increased crime and bankruptcy rates.
Recession-proof income
Many modern casinos offer not only gambling but entertainment, dining, and accommodation. This helps to make them more sustainable, even if revenue from gambling decreases. Their loyalty programs also help to retain customers, even in a struggling economy. Promotions and discounts can have the same effect.
A nuanced impact
Casinos can power economic development, but the impact is nuanced, making it hard to evaluate. It is important to take the broader socio-economic context into account. Creating jobs can stimulate local economies, especially in areas where jobs are scarce. The tax revenue from casinos can have many positive effects on local communities. Casinos can also increase tourism by attracting visitors. This can benefit nearby businesses such as restaurants and bars.
