Casinos: Too good to be true?


To build casinos in Massachusetts, or to not build casinos in Massachusetts.  Like every issue, there are supporters on both sides of this long-winded debate here in the bay state.   However, that is not really the heart of the issue when talking about building up the gambling industry.  What should be focused on are the effects that will be felt should casinos be constructed and whether the cost is too high for our fellow Massachusetts residents.

The focal point of the pro-casino argument appears to be that casinos are an economic goldmine as they can generate millions of dollars in state revenue and hundreds of new jobs.  In the state of Pennsylvania, the revenue gained from slot machines alone increased by a total of 14.27% in February 2009 as compared to February 2008.  This means that the state was able to collect over $80, 000 in taxes for that month alone.1 Equally impressive numbers can be seen in other states.  In Indiana, the government pocketed $7 billion in taxes for the year 2008.2

The prospect of reaping so much tax revenue is understandably a strong incentive for states to build casinos, especially in light of the current economic climate.  However, the evidence in support of increased job growth is mixed, though there are signs that casinos can increase employment.  Though new jobs are generated, a state cannot expect to see unemployment rates drop uniformly across the board, as any gains appear to be relative since they are dependent on the casino’s location.  According to a recent report, casinos draw skilled workers to fill the positions they create—which is great news for the surrounding populations, but not necessarily for the immediate area where the casinos were constructed.3 The report doesn’t outright dismiss the notion that casinos can improve unemployment, in fact it embraces the idea, but merely paints a more realistic picture of the Midas touch mentality.4

Opponents do not appear to view casinos in quite the same light.  They believe that of all the forms of gambling, slot machines are the most addictive, and the most likely to exasperate gambling addictions.  Current research shows that slot machines have a similar effect on brain chemistry as does the drug cocaine, as discussed in the video provided by Casino Facts.org.5 Research proves that slots are highly addictive because of the areas of the brain that they activate: the ventral striatum and the insula.  When these areas of the brain are triggered, slots players feel an intense desire to keep playing even though they know they are loosing money.6 These are the same parts of the brain that are triggered when individuals become addicted to drugs.  Furthermore, the majority of a casino’s profits can tend to come from the slot machines, which are magnets for individuals with gambling addictions.  Thus critics contend that slot machines are a form of predatory gambling which should not be legalized.

The movement against the casinos also argues that expanding the gambling industry is not sound way to build up state revenue, especially in times of economic distress.  Members assert that casinos are not as financially beneficial because they can adversely affect the local economy more than is usually realized.  Specifically, casinos can negatively impact an economy by burdening local businesses because of a loss of productivity by the employees.  Research demonstrates that the efforts made by businesses to recover from such losses, especially where chronic gamblers are concerned, tends to put them at a financial disadvantage.  Essentially, proponents do not believe that genuine economic benefits can be fully realized when jobs gained are created at the expense of others.7

In the end, which ever side anyone takes depends on the merits of the arguments given.  The pro-casino premise, casinos are the solution to economic woes, should be further examined as casinos appear to have inflated the benefits they purport to provide.  Another concern with the pro-casino argument is the fact that they have not appeared to dispute the connection between slots machines and gambling addictions.  The dissident premise, casinos do more harm than good, also warrants more study as they too rely on biased evidence.8

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1Pennsylvania Gaming Control Board, “Pennsylvania Slots Casino Revenue in February Soar 14% Above Previous Year,” 5 March 2009 <http://www.pgcb.state.pa.us/?pr=250> (28 March 2010).

2Indiana Business Review, “The Two-Sided Coin: Casino Gaming and Casino Tax Revenue in Indiana,” Spring 2009 <http://www.ibrc.indiana.edu/IBR/2009/spring/article1.html> (28 March 2010).

3Garrett, Thomas A., Casino Gaming and Local Employment Trends (St. Louis, 2004), pgs 12-13 <http://research.stlouisfed.org/publications/review/04/01/garrett.pdf> (28 March 2010).

4The legend of King Midas says that he was granted a wish which gave him the ability to turn whatever he pleased into gold. His wish brought him seemingly endless wealth and happiness until he turned his daughter to gold. At times, casinos appear to be mistaken for King Midas since they purportedly provide endless economic benefits without creating economic hardship. Thus, the Midas touch mentality was created.

5Casino Facts.org, “Assessing a Massachusetts casino’s impact on the community, region and state,” 2010 <http://casinofacts.org/index.php> (25 March 2010).

6The University of Chicago Medical Center, “Science Life: A blog of new and ideas in biomedicine: Slot Machines: Neuroscience in Action,” 9 November 2009 <http://sciencelife.uchospitals.edu/2009/11/09/slot-machines-neuroscience-in-action/> (29 March 2010).

7 Grinols, Earl L. & Mustard, David B., Business Profitability versus Social Profitability: Evaluating Industries with Externalities, The Case of Casinos, (2001), pgs 149, 151 http://spgfoundation.org/Library/Studies%20and%20White%20Papers/Economics/Grinols%20Mustard.pdf (28 March 2010).

8These biases are present in the materials prepared for both sides. Following the links used in this article and those included under the Useful Links page should help shed more light on the issue. Any apparent bias against either side is the direct result of the material used by the writer during the creation of this article.

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