Gambling Causes Economic Decline

Across the nation gambling proponents try to promote casinos, state-run lotteries, river-boast gambling, and Indian Gaming based on the appeal of the "economic development" that these activities would bring to the area. We are promised that thousands of jobs would be generated and that local hotels, restaurants and other commercial endeavors would benefit from the coat-tail effect of the gambling. We are promised that regional economies will prosper with the advent of the lottery or casinos, and that state revenues that pour in from direct management of the lottery and taxation or management of the video gambling will bring great prosperity to the state government and lots of its projects. Actual research on the effect of gambling on local and regional economies indicates that increases in gambling brings economic decline.

Professor Robert Goodman, in his study entitled, "Legalized Gambling as a Strategy for Economic Development", describes the effect of gambling on local business. He indicates that a study in South Dakota a year after legalizing video gambling in the state did "..show significant declines for selected activities such as clothing stores, recreation services, business services, auto dealers and service stations." Professor Goodman's report, further quotes Timothy Ryan, a University of New Orleans economist, who reported that a proposed casino in New Orleans , "..will direct over $62 million from all retail businesses, excluding hotels." He reported that in, "Atlantic City, homelessness increased after the introduction of casinos, while clothing stores and eating and drinking establishments declined. Only a few retail stores opened in the off-Boardwalk and downtown areas." He further stated, "Researchers calculated that the growth of crime in the Atlantic City region reduced property values by $24,000,000 for each easily accessible community to Atlantic City.." He points out that compulsive gambling is a major influence causing regional economic decline. His research, along with the research of Yaffee and Politzer show that compulsive gamblers drain regional economies of billions of dollars per year because of costly social programs and damage to existing businesses.

Research sponsored by the Illinois Business Review in the Spring of 1994 was done on four riverboat communities to determine if the communities really experienced increases in employment as promised by gambling proponents. After studying the employment figures for these four communities, the reports states that the, "...simple before and after comparisons suggest that riverboats did not create the jobs that were promised, and in fact, had little effect on reducing unemployment." They further found that, "..none of the riverboats for which a full year of post-opening data was available showed a significant effect of the riverboat on reducing unemployment or increasing employment, though one showed a significant negative effect on employment." The Albuquerque Journal reported in June of 1992 that riverboat towns in Iowa suffered the loss of hundreds of jobs because of the capricious will of the gambling industry when Fort Madison had its two floating casinos pulled out unexpectedly. Casinos promise to create thousands of jobs, but Professor John Kindt, a professor at University of Illinois, said, "The field research indicates that nationwide you stand to lose 1.5 jobs for every job the casinos create. In Chicago the field research indicated that 2 to 2.75 jobs would be lost if a land-based casino were built and that is why Governor Edgar vetoed the proposal." Kindt says of gambling in general, "...for every dollar legalized gambling interests indicate is contributed in taxes, it really costs the taxpayer $3.00 to address the increased socio-economic costs to society."