Casinos: The Effects of Casinos - Pure Economics

American casinos took in nearly $44 billion during 2003, making the casino industry a very big business. From an economic standpoint, most casinos have been a huge success for their investors. Commercial casino investors range from middle class stockholders in major corporations to billionaires like Donald Trump and Steve Wynn. Most tribal casinos have been economically successful as well, bringing unimagined wealth to Native Americans, many of whom were at the very bottom of America's economic ladder only a decade ago.

Also, casinos are labor-intensive businesses that employ hundreds of thousands of people. These employees support their families, pay taxes, and buy goods and services—factors that contribute to the economic health of their communities.

The economic effects of casinos on local and state governments in terms of taxes and fees are also significant. Commercial casinos pay billions of dollars every year to government agencies in the form of application fees, regulatory fees, wagering taxes, and admission taxes. These monies fund programs that improve the quality of life of people in the immediate vicinity or same state as the casinos. In turn, governments incur increased costs for more police, roads, sewers, and so forth when casinos open in their jurisdictions. Tribal casinos, though exempt from state and local taxation, pay billions of dollars each year to compensate states and municipalities for regulatory and public-service expenses.

Economic factors alone do not justify or vilify an industry. One could argue that the steel industry benefits society by providing many economic benefits (jobs, marketable goods, corporate taxes, and so forth) and harms society by creating pollution. Benefits and harms must be weighed against one another. In addition to crime, bankruptcy, and suicide rates, important issues that are affected by the presence of casinos include employment, tourism, domestic problems, compulsive and underage gambling, and politics.