Measuring the Economic Effects of Casinos on Local Areas:

1 Introduction The purpose of this paper is to provide an overview of community matching, one of the methods we will use to analyze the economic impacts of gaming venues in Massachusetts. 1 Community matching involves selecting a group of communities that are economically and demographically similar to the casino host communities in Massachusetts. Once casinos open in Massachusetts, comparisons of data trends between the casino host communities and their matched control communities will provide a relative assessment of the impacts of casinos over time. To be clear, community matching is not the only method we will use to conduct our economic impact analysis. Rather, it is intended to complement our other methods and enhance our overall assessment of the economic impacts of casinos. While a brief description of our methods is outlined below, the purpose and focus of this paper is to provide detail about the community matching method. Casino gambling in the United States includes commercially operated casinos, Class III Indian casinos and racetracks with co-located slot machines or video lottery terminals. Before 1990, casino gambling was legal and operating in two states: Nevada and New Jersey. In November 2011, legislation was passed permitting casinos to be introduced to Massachusetts for the first time. Three casino licenses are available in Massachusetts with one license allocated in each of three regions of the state along with a single license for a slots parlor with no geographic restriction as to its location. When its first casino opens in 2015, Massachusetts will be the 36 th state with legal operating casinos. This is a remarkable transformation in a twenty five year span, particularly compared to the nearly five-decade span between 1931, when Nevada legalized casinos, and 1978, when the first casino outside Nevada opened in Atlantic City, New Jersey. This expansion of casino gambling has been controversial with much of the debate centered on the social and economic impacts of casino gambling. This debate is ongoing, in part because measuring the impacts of a casino is challenging. The nature of that challenge is described below along with our chosen methods for evaluating the economic impacts of casino introduction. 1 In this analysis, gaming venues are defined as commercial casinos, Class III Indian casinos, or racetracks with slot machines and video lottery terminals. 2 The broader SEIGMA project will provide a comprehensive review of social and economic impacts related to the introduction …