PJ Heimsch
AP Economics
12/3/19
The casino industry is very polarizing in the way that people view gambling. Some see it as a form of entertainment, while others believe it to be a tax on the poor. These opinions on the betting are created by the benefits and disadvantages of casinos on local economies. Casinos can create a boost in tourism in a local area, but over time for some locations that rise in tourism will dissipate. The construction of a casino in a local place has boom or bust written all over it.
Las Vegas creates a great example for a location where casinos can fuel a thriving economy. According to a study by the Nevada Resort Association, Nevada’s gambling industry formed an economic impact of $67.6 billion in 2018. This impact factors in all indirect and direct economic impacts, such as the tourism flow created and tax revenue. For example, the total tax revenue for Nevada in 2018 was $3.8 billion, and of that $1.5 billion was contributed by the hotel and casino industry. Below is a chart of the 10 largest taxpayers in Nevada (bolded are firms from the hotel and casino industry).
An example of a bust would be Atlantic City, New Jersey in 1978. Atlantic City gave an attempt at duplicating the economic growth that Las Vegas experienced. It was the first legal US casino not located in Nevada. Atlantic City was ready to experience a decrease in unemployment rate, an increase in tourism flow, and much more. Instead within 4 years a third of the cities local businesses closed and within 15 years the unemployment rate was double the New Jersey average. These effects were the result of the location of the casino. The destination was not as enticing as the Las Vegas area, which resulted in the casino relying on local consistency.
The effect of casinos on the economy can be a boom or bust. Some places boom due to the increasing tourism, more jobs created, and higher tax revenues. On the other hand, some locations bust due to limited market share because of other casinos (in state or out of state), and substitution due to all the variations of gambling.
Works Cited
“The Economic and Social Effects of Casinos.” Gambling: What's at Stake?, Encyclopedia.com, 26 Nov. 2019, www.encyclopedia.com/reference/social-sciences-magazines/economic-and-social-effects-casinos#D.“How Gaming Benefits Nevada.” How Gaming Benefits Nevada | Taxes, www.nevadaresorts.org/benefits/taxes.php.
“Spotlight on Economics: Do Casinos Have a Positive Effect on Economic Growth?” Spotlight on Economics: Do Casinos Have a Positive Effect on Economic Growth? - Ag News from NDSU, www.ag.ndsu.edu/news/columns/spotlight-on-economics/spotlight-on-economics-do-casinos-have-a-positive-effect-on-economic-growth.
While casinos may have a positive economic effect for the government or casino itself,the consumers are hurt by spending money at such places. Obviously, because casinos make money, more people lose than win. Adding to that, most people who win, refuse to quit until it is too late, and in the end, lose money anyway. The taxes that the casinos pay may help state governments, but it places a burden on the people instead of helping them. This is an interesting look into how casinos effect our economy.
ReplyDeleteAn interesting fact about casinos that I did not know until recently is that they purposely have no windows to blind the consumer to the concept of time while gambling. I personally believe that this makes their business slightly unethical, although the consumer has full power to leave at any point they wish. I did not know about the impact that a casino has on the surrounding community.
ReplyDeleteAgastya Asthana,
ReplyDeleteI have been fascinated by Casinos and how they work for a long time but I created a fallacy of my own that casinos could never do any harm to the economy or lifestyle of the place it is located in. I can now see that casinos area go big or go home scenario where it could go really great for you, in Las Vegas case, or it go severely bad, in Atlantic City's case. In my time in the U.K. I had noticed a lot of casinos every block and they were thriving, as well as causing more people to visit and create a sense of livelihood in the neighborhood since people would stay around a lot longer.
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