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Do Casinos Cause Economic Growth?

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  • Douglas M. Walker
  • John D. Jackson

Abstract

. Casino gambling is a popular form of entertainment and is purported to have positive effects on host economies. The industry surely affects local labor markets and tax revenues. However, there has been little evidence on the effects of casino gambling on state economic growth. This paper examines that relationship using Granger‐causality analysis modified for use with panel data. Our results indicate that there is no Granger‐causal relationship between real casino revenues and real per capita income at the state level. The results are based on annual data from 1991 to 2005. These findings contradict an earlier study that found that casino revenues Granger‐cause economic growth, using quarterly data from 1991 to 1996. Possible explanations for the differences in short‐ and long‐run effects are discussed.

Suggested Citation

  • Douglas M. Walker & John D. Jackson, 2007. "Do Casinos Cause Economic Growth?," American Journal of Economics and Sociology, Wiley Blackwell, vol. 66(3), pages 593-607, July.
    • Handle: RePEc:bla:ajecsc:v:66:y:2007:i:3:p:593-607
    DOI: 10.1111/j.1536-7150.2007.00528.x
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    References listed on IDEAS

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    1. Grinols,Earl L., 2004. "Gambling in America," Cambridge Books, Cambridge University Press, number 9780521830133.
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    Cited by:

    1. Amir Borges Ferreira Neto & Collin D. Hodges & Hyunwoong Pyun, 2016. "Voting Dynamics and the Birth of State-owned Casinos in Kansas," Economics Bulletin, AccessEcon, vol. 36(1), pages 329-336.
    2. Melisa Bubonya & David P. Byrne, 2020. "Supplying Slot Machines to the Poor," Southern Economic Journal, John Wiley & Sons, vol. 86(3), pages 1081-1109, January.
    3. June Buchanan & Yun Shen, 2021. "Gambling and marketing: a systematic literature review using HistCite," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 61(2), pages 2837-2851, June.
    4. Lambert, Thomas, 2021. "US Gambling Stagnation: Will New Gambling Forms Make a Difference?," MPRA Paper 108549, University Library of Munich, Germany.
    5. Timothy Jeonglyeol Lee, 2011. "Research Note: The Economic Impact of Opening a Gaming Venue in Australia," Tourism Economics, , vol. 17(2), pages 457-464, April.
    6. Aurora MURGEA, 2015. "International Confidence in Italian Economy. A Spread and Gambling Analysis," Timisoara Journal of Economics and Business, West University of Timisoara, Romania, Faculty of Economics and Business Administration, vol. 8(1s), pages 70-89, February.
    7. James Richard Hill & Peter A. Groothuis, 2012. "The Effects of Per Capita Tribal Payments on the Fertility, Education, and Labor Force Participation of Tribal Members," Business and Economic Research, Macrothink Institute, vol. 2(2), pages 106-118, December.
    8. Humphreys, Brad R. & Marchand, Joseph, 2013. "New casinos and local labor markets: Evidence from Canada," Labour Economics, Elsevier, vol. 24(C), pages 151-160.
    9. Karl R. Geisler & Mark W. Nichols, 2016. "Riverboat casino gambling impacts on employment and income in host and surrounding counties," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 56(1), pages 101-123, January.
    10. Jonathan Wiley & Douglas Walker, 2011. "Casino Revenues and Retail Property Values: The Detroit Case," The Journal of Real Estate Finance and Economics, Springer, vol. 42(1), pages 99-114, January.
    11. Nichols, Mark W. & Tosun, Mehmet Serkan, 2017. "The impact of legalized casino gambling on crime," Regional Science and Urban Economics, Elsevier, vol. 66(C), pages 1-15.
    12. Douglas M. Walker, 2008. "Do Casinos Really Cause Crime?," Econ Journal Watch, Econ Journal Watch, vol. 5(1), pages 4-20, January.
    13. Srinivasan, Arun & Lambert, Thomas, 2015. "The Impact of Stagnating Casino Revenues on State and Local Tax Receipts," MPRA Paper 69738, University Library of Munich, Germany.
    14. Douglas M. Walker & Todd M. Nesbit, 2014. "Casino Revenue Sensitivity to Competing Casinos: A Spatial Analysis of Missouri," Growth and Change, Wiley Blackwell, vol. 45(1), pages 21-40, March.

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