Expanded Gambling in Georgia:

Expanded Gambling in Georgia: Expanded Gambling in Georgia: - Start

Added : 2016-08-16 Views :29K

Download Presentation

Expanded Gambling in Georgia:




Download Presentation - The PPT/PDF document "Expanded Gambling in Georgia:" is the property of its rightful owner. Permission is granted to download and print the materials on this web site for personal, non-commercial use only, and to display it on your personal computer provided you do not modify the materials and that you retain all copyright notices contained in the materials. By downloading content from our website, you accept the terms of this agreement.



Presentations text content in Expanded Gambling in Georgia:

Slide1

Expanded Gambling in Georgia: Social and Economic Impacts to ConsiderPublic Hearing CommentsAtlanta, GA10 December 2015

Douglas M. Walker, Ph.D.

Professor of Economics

College of Charleston

Charleston, SC, USA

Slide2

About me

Professional BackgroundCollege of Charleston (2007-present)Georgia College (1998-2007)Research on socio-economic impacts of gambling2 booksMore than 50 journal articles and book chaptersConsultant for state government agencies, includingFlorida LegislatureMaryland State Lottery and Gaming Control AgencyMassachusetts Gaming CommissionMissouri Office of the Attorney General…and various research agencies and industry groups

2

Slide3

Interest in Georgia

Georgia resident for 9 yearsGA casino expansion would represent large expansion in SE, and could affect politics in South CarolinaInteresting perspectives, outdated research cited during Savannah meeting in Nov.

3

Slide4

1 Economic perspective on gambling

Everyone has a perspective, or bias… Economics focuses on voluntary, mutually beneficial transactionsConsumers are sovereign and rational‘Gambling’ is putting something of value at risk on the outcome of an uncertain eventEnjoyable and entertaining to some people, not to othersSince the expected value of all casino bets, lotteries, etc., is negative, gambling must provide entertainment valuePsychologists generally view the issues from the perspective of minimizing potential harms from expanded gambling…

4

Slide5

Disordered gambling

Research suggests that 0.4 – 2.0% of the adult population has a gambling disorderNot ‘rational’ – inability to control behaviorSuffer financial stress, problems with family, friends, career‘Social costs’ are attributed to pathological gamblersCommon view that ‘vice’ goods with potential for addiction should be regulatedGov’t role to protect vulnerable populationsGambling is viewed differently from ice cream, shoes, etc.

5

Slide6

2 Economic benefits

Measurable benefits include:Tax revenues Employment & wagesEconomic growth/developmentLess-measurable benefits:Consumer benefitsMore entertainment firms competing => lower pricesHigher quality ‘entertainment’ optionsIncreased variety‘Counterfactual’ is important What industry might have otherwise expanded?

6

Slide7

Tax revenues

Taxes are technically transfers of wealthTax revenues are the primary reason for legalization in the U.S.Tax rates on GGR range from 6% to over 60%CT tribal casinos pay 25% slot revenues to stateDE tax on VLT revenue 62%ME taxes 16% table games, 39-46% on slotsMD slots taxed at 67%; 20% on table gamesPA slots taxed at 55%Then casinos pay income taxes…Lower tax rates are likely to encourage larger capital investment

7

Slide8

Tax revenues, cont.

2011 study showed slightly negative effect of casino revenues on state tax revenuesBut effect is positive when tourism and economic growth effects are considered – indirect tax revenues attributable to casinosStates tax GGR at much higher rates (25-30% avg) than sales taxes (6% avg)1-to-1 substitution in spending => casinos increase tax revenuesLottery ‘tax’ is about 30%Lottery and casinos will raise more tax revenue than either alone

8

Slide9

Market saturation?

Is the NE market ‘saturated’?Closure of 4 of 12 Atlantic City casinosShould a particular state care about regional saturation?Are casino companies willing to build more?A great market test of a saturated marketRegulations may need to consider potential future competition Discussion of lower tax rates in DE, INOther regulatory changes to help stabilize industry

9

Slide10

Casino revenues in NE states

10

Slide11

Casino taxes paid in NE states

11

Slide12

12

Slide13

Casino taxes & politics

Taxes from gambling (casinos + lotteries) represent < 5% of revenue in most statesGov’t allows industry to exist, enforces monopoly‘Defensive legalization’Why not keep $ at home?Gambling taxes are ‘voluntary’‘regressivity’ question is interestingFiscal stress reliefAvoid cutting spending or raising other taxes

13

Slide14

Employment & wages

Do casinos create new jobs or ‘cannibalize’ jobs in other industries?County-level analysis shows a positive employment effect and minor wage effect from casinosPositive impacts concentrated in entertainment & hospitality sectorsEffect size depends on county size

14

Slide15

Casinos and economic growth

Some markets clearly see significant economic growth due to casinosLas VegasMacaoMississippi Gulf CoastIntuition: increased economic activity is the source of economic growthImpacts in other markets not as obvious

15

Slide16

Consumer benefits

Rarely discussed in political debate over casinosBenefits mentioned earlierLower prices More variety Higher qualityTourism: new option for potential touristsEntertainment isn’t tangible, but it benefits consumersBaseball game ticketsCritics: gambling is a ‘sterile transfer of money’

16

Slide17

3 Economic costs

‘Industry cannibalization’Evidence that casinos harm lottery salesRelationship to other industries: ‘market competition’Little evidence of an overall negative impact on other industriesResults could be market-specificAdditional infrastructure requirementsRegulations/taxes typically require casinos to pay for

17

Slide18

Net (measurable) economic impact

Considering just the economic benefitsTax revenuesEmployment & wage effectsConsumer benefitsAnd economic costsInter-industry competitionGambling industriesNon-gambling industriesInfrastructure costsVery likely to be positive

18

Slide19

4 Social costs of gambling

Social costs are mostly attributed to pathological gamblersIncome lost from missed workCrime Corruption of public officials Divorce caused by gamblingBankruptcyMost ‘costs’ defy monetary measurementBut they’ve been estimated at $10,000Critics claim: Cost:Benefit ratio is 3:1But policymakers need data to help inform decisions…

19

Slide20

Comorbidity

Most pathological gamblers have other disordersPetry, Stinson, and Grant (2005, p. 569) find:74.2% have alcohol use disorders38.1% have drug use disorders41.3% have anxiety disorders28.5% have obsessive-compulsive personality disorderHow can ‘social costs of gambling’ be measured when most pathological gamblers have multiple disorders?Most social cost studies ignore this issueResult is an exaggeration of the social costs attributable to gambling.

20

Slide21

5 Casinos and crime

Key concern about casinos is the potential link to crimePathological gamblers are more likely to commit crimesCasinos attract potential victims with cash and potential criminalsEvidence is mixed, and appears to be dependent upon how ‘crime rate’ is measuredInclude or exclude ‘visitors’?Reno studies showed areas near casinos are safer

21

Slide22

6 Other concerns

Other important concerns defy measurement in cost-benefit analysesCitizens may have concerns about gambling changing the cultureNIMBYMoral concerns about gamblingShould the state condone casino gambling?What about lottery gambling?Beer with > 5% ?Individual freedom and the role of government in restricting industry?These are real considerations that often get ignored in the face of seemingly precise and authoritative data

22

Slide23

Summary of research

Good data, ability to measure economic benefitsEmployment Wages Tax revenuesDifficult to measure consumer benefitsEconomic costs (e.g., industry cannibalization) are more difficult, but still measurableSocial costs are very difficult to measure Research should focus on types of harms and their prevalence – not estimating social costs in $

23

Slide24

Contact Information

Doug WalkerProfessor of EconomicsCollege of Charleston5 Liberty St., Rm. 427Charleston, SC 29401Tel: (843) 953-8192Email: dougwalker2@gmail.comWeb: walkerd.people.cofc.edu casinonomics.net

Casinonomics (2013)

24

Slide25

Slide26

Slide27

Slide28

Slide29

Slide30

Slide31

Slide32

Slide33

Slide34

Slide35

Slide36

Slide37

Slide38

Slide39

Slide40

Slide41

Slide42

Slide43

Slide44


About DocSlides
DocSlides allows users to easily upload and share presentations, PDF documents, and images.Share your documents with the world , watch,share and upload any time you want. How can you benefit from using DocSlides? DocSlides consists documents from individuals and organizations on topics ranging from technology and business to travel, health, and education. Find and search for what interests you, and learn from people and more. You can also download DocSlides to read or reference later.
Youtube