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Toledo Research Study Recognizes Benefits Casinos Have Provided

11 June 2003

Two Toledo City Councilmen, Robert McCloskey and Wade Kapszukiewicz, received an Executive Summary from a legislative aide on the impact of casino gambling on a community. The Toledo City Council plans to have an "Economic Development Committee" hearing on June 18th at 2:00 to discuss "what role legalized gambling and casinos could have in regard to the economic development of the City of Toledo." In conjunction with the announcement of this hearing, the City Council had research conducted to look at the Economic Impact and the Social Impact of casino gambling.

The Executive Summary, which was prepared by a governmental employee detached from the industry and presumably objective, does a lot to dispel many of the common myths about the industry. Here is what the Summary states about the Economic and Social Impacts of casinos on communities:

"Economic Impact

Many of the positive economic impacts are in fact easy to point to if not always to quantify: Sleepy backwaters have become metropolises almost overnight; skyscrapers rise on the beaches at once-fading tourist areas; legions of employees testify to the hope and opportunities that the casinos have brought them and their families; some Indian nations have leapt from prolonged neglect and deprivation to sudden abundance.

After a two-year study of legalized gambling in the United States, the congressionally mandated National Gambling Impact Study Commission (NGISC) found numerous benefits of casino gaming.

  • As it has grown, it has become more than simply an entertainment pass-time: The gambling industry has emerged as an economic mainstay in many communities and plays an increasingly prominent role in state and even regional economies &
  • & a new casino of even limited attractiveness, placed in a market that is not already saturated, will yield positive economic benefits on net to its host economy.
  • Research conducted on behalf of the commission confirms the testimony of & casino workers and government officials that casino gaming creates jobs and reduces the level of unemployment and government assistance in communities that have legalized it.
  • Those communities closest to casinos experienced a 12%-17% drop in welfare payments, unemployment rates and unemployment insurance.

Economics of Casinos in 2001

Nationwide in 2001, 433 commercial casinos operated in 11 states. Gross gaming revenue in these 11 states grew by 5%, to $25.7 billion in 2001. The Commercial casinos workforce numbered more than 364,000 people (if you combine that figure with jobs created in American Indian and racetrack casinos, the industry directly employed more than 577,000 people nationwide). They also generated an additional 450,000 jobs in related businesses. Commercial casinos employees earned wages (including benefits and tips) of $11.5 billion, more than $500 million more than the previous year.

Tax Contributions

The Commercial casinos generated tax revenue to state and local governments of $3.6 billion in 2001, a 4.2% increase over the previous year. The tax rate for the casino industry ranges from a low of 6.25% (Nevada) to a high of 35% (Illinois). The revenue from those taxes benefits education, public safety, economic development and infrastructure improvements, among other state and local programs.

2001 Calendar Year Gaming Tax Revenue

Colorado - $92 million

Illinois - $555.2 million

Indiana - $492.6 million

Iowa - $216.9 million

Louisiana - $374.8 million

Michigan - $219.3 million

Mississippi - $332.6 million

Missouri - $322.7 million

Nevada - $688 million

New Jersey - $342.4 million

South Dakota - $4.5 million

TOTAL - $3.6 billion

Social Impact

The introduction of casinos is commonly associated with debates over the potential for community disruption and an increase in social problems such as higher crime rates, increases in divorce and suicide, and a lower quality of life. However, there has been little evidence that casinos have generated the adverse social impacts, which critics predicted.

I. Crime

Nearly all recent publicly and privately funded studies, as well as the testimony of law enforcement agents from around the country, refute claims by gambling opponents that casinos are linked to increased crime rates in communities and organized crime.

II. Divorce and Suicide

Researchers have found no data supporting the notion that legalizing casino gambling would increase a community's divorce rate. Nor was there any strong correlation between gaming and suicide rates.

III. Problem/Pathological Gambling

NGISC reported that pathological gambling often occurs in conjunction with other behavioral problems, including substance abuse, mood disorders, and personality disorders - a joint occurrence. Because of this, even when an individual acknowledges that gambling contributed to a particular family or social problem, it is extremely difficult to determine exactly what caused the problem."

As the casino gaming industry grows, reality dispels many of the myths about the gaming industry. Too often, the industry is put on the defensive and the benefits are ignored.

It is good to see that as these issues are studied further casino gambling comes to be seen for what it truly is - a form of social entertainment that many people enjoy responsibly.

David Waddell
David Waddell is an attorney for Regulatory Management Counselors, P.C. (RMC), which assists businesses in navigating the legislative, regulatory and licensing systems governing Michigan’s commercial and tribal casino industries. He is the co-author of The State of Michigan Gaming Law Legal Resource Book and one of the founders of The Michigan Gaming Newsletter.

David Waddell Websites:

www.michigangaming.com
David Waddell
David Waddell is an attorney for Regulatory Management Counselors, P.C. (RMC), which assists businesses in navigating the legislative, regulatory and licensing systems governing Michigan’s commercial and tribal casino industries. He is the co-author of The State of Michigan Gaming Law Legal Resource Book and one of the founders of The Michigan Gaming Newsletter.

David Waddell Websites:

www.michigangaming.com