Are Casinos Good for Communities?

When local, or even provincial or state governments find themselves in need of greater revenue streams to support education, healthcare or other services, but don't want to raise taxes, casinos and lotteries are often promoted as ways to produce a sizable influx of cash, boost tourism and provide a new source of entertainment for the locals. It's important that we stop and ask the question, Are Casinos Good for Communities?

As of 2006, Canada's gaming industry was one of the largest contributors to the Canadian economy at more than $15 Billion per year. Directly supporting 135,000 full time jobs and generating almost $9 Billion per year to fund government and community projects.

Clearly, gambling is big business, and when governments are able to cash in on that revenue in a positive way, there can be benefits. But are there also economic side-effects? There are several, including negative impacts on home valuations and local businesses.

The impact of casinos on neighboring property values is "unambiguously negative," according to the economists at the National Association of Realtors. "Casinos don't encourage non-gaming businesses to open nearby, because the people who most often visit casinos do not wander out to visit other shops and businesses. A casino is not like a movie theater or a sports stadium, offering a time-limited amusement. It is designed to be an all-absorbing environment that does not release its customers until they have exhausted their money."

Not only do casinos fail to greatly increase the profile of neighbouring businesses, much of their profit is not from generating new wealth. The highly touted economic benefits may not be as grand as they first appear:

". . . critics point out that gambling only redistributes existing money, but does not generate much new wealth. In fact, it can have a detrimental effect on the surrounding economy as leisure spending is diverted away from local businesses. Every dollar spent in a casino is a dollar that might have been spent in local restaurants, cinemas or shops."

The outlier to this occurs when a Casino is able to attract wealthy high-rollers from afar who, when they lose, pump money into the local economy. But even if the economic benefit was worth it, what is the cost to society?

". . . there's no dispute that gambling causes crime. The only questions, he says, "are how big is the impact and can you get a good measurement." Even the American Gaming Association agrees that gambling addiction is a social problem."

The same article goes on to highlight a 2004 report that almost one-third of pathological gamblers "admitted having committed robbery in the previous year. Approximately 13 percent had assaulted someone for money."

Many argue that it is only the few individuals who suffer from the societal effects of gambling addiction. The numbers tell us otherwise. According to the University of Calgary:

"Gambling becomes a problem when it interferes with personal life, work life, personal and household finances, or physical and/or mental health. Up to 3% of Canadians suffer from a gambling problem. This rate is similar to the prevalence of alcoholism in Canada."

Few would argue that alcoholism is only a "minor problem." If 3% suffer from a gambling problem, that accounts for more than 700,000 Canadians. Gambling problems affect more than just those with the problem. How many families are affected? How many work places are affected?

While there may be some economic benefits to Casinos, lotteries and other forms of gambling, they have essentially become another tax on the poor as shown by Americanvalues.org.

"In this way, state-sponsored casino gambling creates a stratified pattern that parallels the separate and unequal life patterns in education, marriage, work, and play that increasingly divide America into haves and have-nots. Those in the upper ranks of the income distribution rarely, if ever, make it a weekly habit to gamble at the local casino. Those in the lower ranks of the income distribution often do. Those in the upper ranks rarely, if ever, contribute a large share of their income to the state's take of casino revenues. Those in the lower ranks do."

Casinos are a lot of things. However, they are not good for communities.