The Effects of Casinos on

The Effects of Casinos on Local Communities

Dayna Edwards and Betty Jo Nash

LDR 640: Financial Systems Management

Siena Heights University, Lansing, Michigan

May 15, 2012

Excitement

Criticism

“This

is terrible!”

Division between Local and State Government

Congressman Mike Rogers

“The state’s existing casinos have not been the windfall many expect them to be (Rob South. 2012).”

Lansing Mayor Virg Bernero

“It will create thousands of good jobs, attract tens of thousands of tourists to the region, and generate enough revenue to allow our city to send all of our school district graduates to college (Rob South, 2012).”

What are the positive & negative effects?

Positive Effects

Private Sector Jobs 58%

Generate Revenue for Local and State Government

Gun Lake Casino State Government$7.8 Million Local Government

Wayland School System

Reinstate two-way transportation to road events

Eliminate their pay-to-play sports participation fee

Casinos

Negative Effects: Jobs

Low Paying High Stress

More Negative Increases

Traffic

Petty Crime

Decline in the Quality of Life

Divorce

Abuse

Neglect

Suicide

Homelessness

Background

Indian Gaming Regulatory Act of 1988

Legalized gambling in 48 of 50 states

Based on direct, indirect and induced impacts, the commercial casino industry supported approximately $125 billion in spending and nearly 820,000 jobs in the U.S. economy in 2010, which is roughly equivalent to 1 percent of the $14.5 trillion U.S. gross domestic product

Building the industry

(1) positive public opinion towards the value of gambling as an entertainment option, (2) governments’ viewing gaming activities as mechanisms that create jobs and generate welcome revenues, and (3) Native American tribes capitalizing on opportunities for economic self sufficiency through gaming

Economic Impacts

Wages, jobs, public assistance

Tourism & economic development

Multiplier factor

Negative effects to community

There are three major negative impacts (costs to the local economy) to be estimated: the cannibalization impact; additional public expenditures; and negative externalities

Crime

Cost of social aspects

Applying the research to Lansing

Project economic impact

Convention center & tourism

Location proximity

Trickle down

Marketing

References

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American Casino Guide. Retrieved May 12, 2012 from, http://www.americancasinoguide.com/casinos-by-state/michigan-casinos.html

American Gaming Association (2012a). Beyond the casino floor: economic impacts of the commercial casino industry. Retrieved May 12, 2012, from http://www.multivu.com/assets/53019/documents/Full-Report-Beyond-the-Casino-Floor-original.PDF

American Gaming Association (2012b). Commercial casinos remain a driving force in U.S. economy. Retrieved May 12, 2012, from http://www.multivu.com/mnr/53019-aga-report-shows-economic-impacts-of-commercial-casino-industry

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Ellison, Garret. (2011, November 28). Gun Lake Casino pays out $7.8 million to state, local governments. Retrieved April 21, 2012, from

http://www.mlive.com/news/grandrapids/index.ssf/2011/11/gun_lake_casino_pays_out_78_mi.html

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Goodman, R.and Feser, E. (1998). Understanding the Economic Impact of Casinos in Missouri. Retrieved May 12, 2012, from http://casinowatch.org/costs/casinos_mo.html

Jackson, Lazarus. (2012, March 21). Despite council vote, casino still poor idea. The State News. Retrieved April 21, 2012, from

http://envoy.lcc.edu

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National Gambling Impact Study Commission Final Report. (1999, June 18).

Retrieved from

http://govinfo.library.unt.edu/ngisc/reports/fullrpt.html

New England Public Policy Center. (2006, September 14). Economic impact of casino development memorandum. Retrieved May 12, 2012, from http://www.bos.frb.org/economic/neppc/memos/2006/brome091406.pdf

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Smith, Rod. (2003, May 5). Gaming industry uses survey results to tout influence. Las Vegas Review. Retrieved April 22, 2012, from

http://envoy.lcc.edu:2259

South, Rob. (2012, January 24). Lansing casino could cost Michigan money. Retrieved April 21, 2012, from

http://www.mlive.com/politics/index.ssf/2012/01/report lansing casino could co.html

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http://www.mlive.com/lansing-news/index.ssf/2012/05/lansing_casino_approved_reject.html