The casino effect: Do casinos spur growth and which communities benefit?

Abstract

There has been a dramatic increase and spread of "Las Vegas" style casinos in the United States over the last 20 years. Using data on employment from across the US, this research finds that, in general, counties experience an increase in employment after a casino opens when compared with counties without casinos. The effect on industries related to casinos is somewhat mixed, but in general mildly positive, which would suggest that casinos provide a positive employment spillover into the surrounding local community. Intertemporal estimation suggests that the casino effect grows over time and provide evidence that the results are not influenced by endogenous casino location. Estimates on how the overall effects vary across different population densities show that low-density communities see much larger employment growth than more densely populated areas. Finally, additional estimation finds little impact on employment levels in neighboring counties, although there are some small effects in certain sectors.

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