Overview of the Economic and Social Impacts of Gambling in the United States

Casino gambling is very popular with consumers and politicians, and it has become one of the fastest growing entertainment industries around the world. However, the economic effects of casino gambling and gambling behavior still have not received much research attention. The purpose of this paper is to provide an overview of the empirical research on the economic and social impacts of gambling performed by the author. The issues examined include the economic growth effects of casino gambling, the relationships among gambling industries and the implications of these relationships on net government tax revenue, the social costs of gambling, casinos and crime, casinos and political corruption, and problems with cost-benefit analysis applied to gambling. Despite an increase in the amount of research on the gambling industry, its overall impacts on the economy and society are largely unknown. More research on gambling would be helpful as more U.S. states – and nations – turn toward legalized gambling to help with fiscal crises. * Associate Professor of Economics, College of Charleston, Charleston, SC, USA ([email protected]). This chapter is based on a paper presented at the Macao Polytechnic Institute Global Gaming Management Seminar Series, October 23, 2009. The author gratefully acknowledges financial support from the Macao Polytechnic Institute, the U.S. Department of Education, Title VI-A, International Studies & Foreign Language, and the Global Trade Resource Center at the College of Charleston.