Casinos Unlikely to Cause Significant Benefits or Problems

Contact: Doug Gavel
Phone: 617-495-1115
Date: January 13, 2005

Cambridge, MA — Allowing a few large casinos to operate in southeastern and/or western Massachusetts would produce some modest benefits in those regions, create some modest problems, and have surprisingly little impact in a host of other areas according to “Betting on the Future: The Economic Impacts of Legalized Gambling,” a study released today by the Rappaport Institute at Harvard’s Kennedy School of Government.
The study’s authors, Rappaport Institute assistant director Phineas Baxandall and Bruce Sacerdote, an associate professor of economics at Dartmouth College, reached these conclusions after comparing the experience of counties in the United States that house casinos with those that do not. They focused especially on more populous counties, similar to those in Massachusetts, and larger casinos, such as those proposed for Massachusetts. They found that:
The population of casino counties grew 5 percent faster than the population of non-casino counties while the number of jobs in all casino counties grew 6.7 percent faster than in non-casino counties. In more populous casino counties, however, population increased 8 percent faster than similar non-casino counties, while jobs in populous casino counties increased only 5.7 percent faster than in similar non-casino counties. Similarly, median house prices in all casino counties rose about $6,000 more than in non-casino counties. This effect, however, seems to have been concentrated in sparsely populated rural counties.
Personal bankruptcy rates in all counties with casinos rose by about 10 percent and by 15 percent in more populous counties with casinos. Total reported crimes also increased slightly in casino counties, but only because of population increases associated with casinos. The crime rate (the number of crimes per 1,000 residents) actually declined.
Local and county governments in areas where casinos opened did not see their revenues or their spending rise any faster than in similar non-casino areas. Given that population increased faster in areas with casinos, this means that per-capita public-sector spending and revenues in casino counties rose more slowly than in similar non-casino counties.
“Casino gambling is not a trivial issue, but employment, finances and crime are insufficient rationales for deciding whether to deny or allow casinos in Massachusetts,” Baxandall said. “Policymakers, therefore, must consider other issues when deciding whether to allow casino gambling in the state.”
The report is available on the Rappaport Institute website.


John F. Kennedy School of Government 79 John F. Kennedy Street
Cambridge, MA 02138
617-495-1100 Get Directions Visit Contact Page