The impact of casino gambling on bankruptcy rates: A county level analysis

Abstract

Roughly 250 U.S. counties have legalized casino gambling within their borders. Sixty of these counties have established commercial casino operations, with the remainder supporting tribal casinos. Past research has provided mixed results regarding the impact of these casinos on market and non-market outcomes. The goal of this research study is to estimate the impact of casinos on two of these outcome variables -- individual and business bankruptcy rates -- over the decade of the 1990s. The study matches each casino county with a non-casino county according to U.S. Census region, household income, population and population density. Using simple descriptive statistics and regression analysis, the study estimates the impacts of casinos on bankruptcy rates. Our regression analysis on matched-pair counties indicates that those counties that legalized casino gambling during the 1990s experienced a cumulative growth rate in individual bankruptcies that was more than double the growth rate for corresponding non-casino counties. However, the cumulative rate of change in business bankruptcy rates in the casino counties was, on average, 35.4 percent lower than the applicable rate for the non-casino counties.

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