How Does Gambling Affect The Economy?

How Does Gambling Affect The Economy?

How Does Gambling Affect The Economy?

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Philadelphia, PACasinos - Casinos, and gambling in forms such as live casino games online have become a very prominent industry in the United States over the recent descents. Before the 1980s, you could only gamble in Atlantic City or Vegas, but in the past 40 years, over 30 states have legalized gambling in some way. 

Gambling And The Economy

Some states decided to legalize it for economic growth, as it is seen to have benefits in greater tax revenue, local sales in retail, and employment rates. However, we have to wonder if gambling is as good for the economy as we may think or if it is worse.  In recent times we have seen massive economic turmoil; in these times, it would be interesting to see if casinos and gambling helped stabilize economies during these turbulent stages of the world’s market or if it was actually hindering it.



The go-to perspective would be that it helps, as even in times when it was illegal, it has been prevalent, and it has been a practice around for a very long time. But is the truth as obvious as its success?

Casino Gambling And The American Economy

People wager a lot in casinos; it is not a trivial business in the slightest. In 2000, there was over $370 billion, and considering how much casinos have grown in popularity since then, you could at least triple this number now.



For perspective, this would count as at least $1,300 per person in the US. Of this annual total, around 92% of this goes back to players as winnings, which allows $26 billion for casinos in profit. Remember, this was over 20 years ago!

As the revenue of casinos will vary from state to state, there are differences here also. Nevada has the biggest market of all, with a majority of the casinos here getting around $9.5 billion in gross revenue around this time. However, riverboat casinos in Illinois and Missouri in this time would get around $1 to $2 billion around this time.



While economic development is used by this industry and governments to sell the idea to the populace, with more casinos popping up and more casinos online, the increased economic impact is not exactly translucent.

Casinos Do Increase Employment

First, we want to look at the theory that casinos increase employment rates in the United States.

This would make sense, as it is an industry that does need employees and a few in different roles. However, whether or not the fact that casinos exist actually has an impact on the unemployment rate is a different thing.

Is it possible that casinos take potential employees from other sectors? Or is it actually reducing the unemployment rate?

Unemployment Rates

It would seem that casino appearance typically points to lower rates of unemployment. This is seen in how local unemployment rates drop after casinos are introduced. This means that casinos help to lower rates of unemployment… or at least, they might.

The change in unemployment rates in local areas needs to be compared with statewide employment rates at a specific time. If changes are the same, employment growth does not have so much to do with the casinos but just typical economical cycles.

Considering casinos as the factor is not totally moot; however, there should always be considerations of other factors.

These changes in employment rates should be considered as part of economical cycles, population changes, conditions of local businesses, and such.

Areas In Which Unemployment Is Prevented

However, the basic premise of this theory is that casino operations require labor workers, and labor will come from locally to the casino, which reduces unemployment in said area.

We should be considering whether casinos decrease unemployment in what specific sector.

A majority of casino jobs need skills, be it dealing cards, accounting, security, and such. If a casino moves to a rural location with a shortage of skilled individuals, they may employ from outside of the area.

So, it is important to consider the sector and skill sets of those who gain employment.

Casino Tax Revenues

When considering the economic impact of casinos and gambling, it is also important to consider the tax effects as well.

Tax Percentages

State taxes will have adjusted casino revenues, using the tax to fund programs. In Missouri, for example, the rate is at 18%, with 2% additional to aid local city governments.

Casino tax revenue is seen as a benefit. However, this revenue is not new money.

Tax Destination

Whether or not casino tax actually impacts the economy depends on where this tax goes. Does it go into education? If so, it may impact the economy of a state in some years, when those who have benefited from it can then give back.

However, it depends on where the state utilizes the tax, such as with any other industry.

Is It Good Or Bad?

Honestly, casinos and gambling impact the economy the same as any other industry. Money goes in through customers, the businesses profit, and tax is collected and put back into the system.

Economically, casinos and gambling are as beneficial for the economy as any shop in your city.


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