Casinos and Economic Growth

Abstract

One of the primary reasons for governments legalizing casino gambling is the purported economic benefits from casino development. Among these benefits is economic growth. Over the last half-century, policies that promote economic growth have become an integral part of public sector economic activity. In the United States, state government attempts to attract industry via tax breaks and financial incentives have been the object of considerable research attention. But the apparent inability of either of these sets of policies to sustain successful outcomes over time has led state policy makers to explore alternative avenues. Writing in the 1930s, Joseph Schumpeter noted that one method of spurring economic growth is to provide a new good to the consuming public. Since legalization of a previously illegal activity is tantamount to introducing a “new good” to the public menu of consumption possibilities, there should be no surprise that a growth policy that has seen increasing popularity is legalized gambling.