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Casinos, Crime, and Community Costs


  • Earl L. Grinols

    (Baylor University, and Terry College of Business)

  • David B. Mustard

    (University of Georgia and the Institute for the Study of Labor)


We examine the relationship between casinos and crime using county-level data for the United States between 1977 and 1996. Casinos were nonexistent outside Nevada before 1978, and expanded to many other states during our sample period. Most factors that reduce crime occur before or shortly after a casino opens, whereas those that increase crime, including problem and pathological gambling, occur over time. The results suggest that the effect on crime is low shortly after a casino opens, and grows over time. Roughly 8% of crime in casino counties in 1996 was attributable to casinos, costing the average adult $75 per year. © 2006 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.

Suggested Citation

  • Earl L. Grinols & David B. Mustard, 2006. "Casinos, Crime, and Community Costs," The Review of Economics and Statistics, MIT Press, vol. 88(1), pages 28-45, February.
  • Handle: RePEc:tpr:restat:v:88:y:2006:i:1:p:28-45

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    References listed on IDEAS

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    5. Luca Bossi & Pedro Gomis-Porqueras & David L. Kelly, 2007. "Optimal Second Best Taxation of Addictive Goods," Working Papers 0708, University of Miami, Department of Economics.
    6. Douglas M. Walker, 2008. "The Diluted Economics of Casinos and Crime: A Rejoinder to Grinols and Mustard’s Reply," Econ Journal Watch, Econ Journal Watch, vol. 5(2), pages 148-155, May.
    7. Brad R. Humphreys & John A. Nyman & Jane E. Ruseski, 2016. "The Effect of Recreational Gambling on Regional Health Outcomes: Evidence from Canadian Provinces," Working Papers 16-28, Department of Economics, West Virginia University.
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    11. Falls, Gregory A. & Thompson, Philip B., 2014. "Casinos, casino size, and crime: A panel data analysis of Michigan counties," The Quarterly Review of Economics and Finance, Elsevier, vol. 54(1), pages 123-132.
    12. Humphreys, Brad R. & Marchand, Joseph, 2013. "New casinos and local labor markets: Evidence from Canada," Labour Economics, Elsevier, vol. 24(C), pages 151-160.
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    16. Daniel M. Hungerman, 2014. "Do Religious Proscriptions Matter?: Evidence from a Theory-Based Test," Journal of Human Resources, University of Wisconsin Press, vol. 49(4), pages 1053-1093.
    17. George F. N. Shoukry, 2016. "Criminals' Response To Changing Crime Lucre," Economic Inquiry, Western Economic Association International, vol. 54(3), pages 1464-1483, July.
    18. Huang, Haifang & Humphreys, Brad & Zhou, Li, 2014. "Urban Casinos and Local Housing Markets: Evidence from the US," Working Papers 2014-4, University of Alberta, Department of Economics.
    19. Douglas M. Walker, 2008. "Do Casinos Really Cause Crime?," Econ Journal Watch, Econ Journal Watch, vol. 5(1), pages 4-20, January.
    20. William S. Reece, 2010. "Casinos, Hotels, And Crime," Contemporary Economic Policy, Western Economic Association International, vol. 28(2), pages 145-161, April.
    21. Cotti, Chad D. & Walker, Douglas M., 2010. "The impact of casinos on fatal alcohol-related traffic accidents in the United States," Journal of Health Economics, Elsevier, vol. 29(6), pages 788-796, December.
    22. Douglas M. Walker, 2010. "Casinos and Crime in the USA," Chapters,in: Handbook on the Economics of Crime, chapter 19 Edward Elgar Publishing.
    23. Markham, Francis & Doran, Bruce & Young, Martin, 2016. "The relationship between electronic gaming machine accessibility and police-recorded domestic violence: A spatio-temporal analysis of 654 postcodes in Victoria, Australia, 2005–2014," Social Science & Medicine, Elsevier, vol. 162(C), pages 106-114.
    24. Robert E. Hoyt & David B. Mustard & Lars S. Powell, 2005. "The Effectiveness of Insurance Fraud Statutues: Evidence from Automobile Insurance," Risk and Insurance 0501001, EconWPA.

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