Casinos also pay taxes to the government which again means that the local community loses the money gained by the casino. Another way in which the local economy does not benefit from the casino is when the casino gets its supplies from external suppliers or the casino owners live outside the casino's economic area. Some of the casino profits can also be lost as a result of government services provided in that area like providing better roads and traffic control to the casino. (Hsu, 1999)
The casino may also require additional police protection and judicial activity in case criminal activity goes up in the region. Las Vegas has also had its own share of problems as an off-shoot of the phenomenal success of casinos there. It has had to deal with air pollution, shortage of water, inadequate methods of mass transportation and other infrastructure related problems. Despite these problems, Las Vegas has become a classical case of casino success with 30 million tourists flocking to the Las Vegas casinos every year. Approximately 90% of the money in the Las Vegas economy comes from casinos. The casino leadership is extremely strong and is aware of the needs of the local community. It is prepared to deal with the problems associated with casino gambling so that the community remains economically strong. As a result, not many people are bothered about the impact of casino gambling on the local community. (Hsu, 1999)
It has been found that a casino can eat into the profits of other local industries. This cannibalization can affect the local economy to some degree. In order to attract more customers, casinos often resort to offering several goods and services free of cost or at heavy discounts. These goods may take the form of food or beverages which may compete with local dining industries and often drive them out of business. Legalized casino gaming can also reduce the profit margins of other forms of legalized gambling like dog racing, horse racing or bingo. (Pierce; Miller, 2004) a study conducted by the National Opinion Research Council under National Gambling Impact Research Commission in 1998 found that pathological gambling in the State cost the society $5 billion per year. In terms of creditor losses and productivity reduction, the cost to the society was $40 billion. On the other hand, apart from increased tourism activity, tax revenues and property values, casino gambling has also spurred the growth of the hotel industry as well as construction activities in the local area. (Florida Council of Compulsive Gambling, Inc., 2004)
In a study conducted on the effect of the addition of a casino in Omaha, Nebraska, it was found that the area's poverty rate would not be significantly affected. It would affect the local economy positively by reducing local gambling expenditure outside the community as well as increase the amount of dollars spent by tourists in the local area. Out of the 57 counties who have legalized casino gambling, 33 have reported job gains whereas 24 have reported job losses. Tax collections have also increased by 19% per year between 1996 and 2001. Casinos in South Dakota and Colorado have imposed restrictions on casino gaming in the form of an upper limit of daily losses as well as disallowing credit. Another trend that has been witnessed is that tax growth and revenues are highest in the first five years of a casino's lifetime. (Goss, 2002)
Several rural communities in the U.S. have implemented one or the other form of casino gambling as a way to revitalize their flagging economies. Casinos in places like Black Hawk in Central City, Deadwood in South Dakota and Cripple Creek in Colorado have met with different levels of success in casino gambling. It has been the experience of these communities that casinos can, at the same time, generate tremendous profits as well as run up huge costs. Therefore, it is essential that community members, leaders, casino owners, casino managers and public officials analyze the issues that might affect the community directly in making the changeover to a casino gambling economy. An unrestrained change to a gambling economy can bring in massive and drastic transformations to the lives of the community members. Thus, it is evident that planning is required at every level of this industry including the community, government and the casino management. This planning effort should include an assessment of present and future competition, analyzing a suitable scale of operations and determining the beneficiaries of the proposed casino setup. (Long, 1996) Having seen both the negative as well as positive impacts of casino gambling on the economy of an area, it is essential to analyze both sides of the story and come to a balanced conclusion that will result in a win-win situation for everybody. (Goss, 2002) the Las Vegas model has shown what a balanced approach to casino gambling can bring to the economy of the local community. (Hsu, 1999)
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