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Casinos more often lead to losses than to
economic development
Casinos More Often Lead to Losses
than
to Economic Development
Scientific American Magazine - October 3, 2001
All that glitters is definitely not gold when it comes to casinos. In a
special
gambling issue of the journal Managerial and Decision Economics, two
economists
describe their recent analysis of the costs and benefits associated
with
introducing a casino to a community. Although many officials have
promoted
casinos as a means to support lasting economic development, Earl
Grinols
of the University of Illinois at Urbana-Champaign and David Mustard of
the
University of Georgia concluded the opposite. They found that the costs
outstripped the gains almost twofold—an imbalance that amounts to a
national
loss of at least $27.5 billion each year. : "Much of the information has been funded by the gambling industry itself," Grinols says, "and is marked by poorly executed or biased economic-impact studies that use incomplete data or make conclusions not supported by facts." Very often, calculations wrongly include the tax receipts and wages from a casino without also taking into account the establishment's effect on other businesses, from whom they drain revenue. Also underestimated, Grinols and Mustard say, are the social costs. Two-thirds to 80 percent of gambling revenues come from just 10 percent of the population. But among this group, one in five files for bankruptcy and 21 to 36 percent gets fired from their job. These pathological gamblers take "a predictable path of exhausting personal resources, selling insurance policies, selling possessions and 'borrowing' from family and friends" to the tune of $13,586 a year. So too, crime rates are approximately eight percent higher in counties with casinos at least four years old. Kristin Leutwyler, October 03, 2001 http://www.sciam.com/article.cfm?articleID=000B7B07-4BFB-1C63-B882809EC588ED9F |
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