The gambling industry is indeed a huge one – only in the US the amount of money spent in casinos alone was over one hundred billion dollars.
Although the industry has significantly lower taxes, it promises distressed urban communities a chance of experiencing a boom in their economy. Namely, they claim that when casinos come into a town, they promote jobs and visitors. They give examples such as Las Vegas and Atlantic City, which were practically not even on the map until they developed gambling communities.
But, the truth behind this claim is that most communities will never experience a boost like the ones in Las Vegas and Atlantic City. Those cities are unique in that they provided a service and experience when those kinds of experiences were rare. There was a scarcity in the market and that is the main reason they were successful. A lot of people came to those towns and regions to gamble, and today it is the same. But the fact remains that other towns will probably not see the same success.
With more and more states legalizing gambling, there are more places to gamble and the market becomes diffused. If there are casinos in every town, people aren’t going to flock to a faraway place just to have some fun gambling. Even profits in popular destinations are falling. The casino profits in Atlantic City fell by 35 percent only in 2013, and the trend seems to be going downwards.
But, even if another town could emulate the situation, this success also comes with a price. There is a strong correlation between the proximity of casinos and people developing gambling issues. Gambling issues are much more common in Las Vegas than anywhere else in the US.
So there is very little evidence that states and towns would benefit from casinos opening. Although some areas have many issues to solve, opening a casino would do nothing to get rid of the problem. The only thing that could come of it is money that residents would otherwise spend at productive businesses going to a casino and undermining any economic growth.