Issue 1:
Supporters of casinos often cite a decrease in local unemployment rates post-casino establishment as proof. Casinos positively impact local employment. Since the casino was introduced the local unemployment rate decreased. It seems likely that the casino contributed to the decrease in local unemployment. Possibly. The decrease in local unemployment is greater than the statewide decrease after the casino is implemented. It could be said that the casino has effectively lowered local unemployment.
Issue 2:
The main concept behind higher employment is that a casino needs local labor to operate effectively. This will lead to a decrease in unemployment rates in the region. The important question is not only if casinos reduce unemployment, but for whom they reduce unemployment. Skills such as accounting, card dealing, security, or other specialties are needed for most casino positions. If a casino decides to relocate to a rural area with a less skilled labor force, it will likely attract skilled workers from other regions. If the workforce is not based in the local area and workers travel to casinos, the local area’s unemployment rate will stay the same. Should some skilled workers choose to live close to the casino, the local unemployment rate will decrease as the labor force enlarges. It is this decreased unemployment rate that is often used as evidence that casinos have indeed improved local employment. Unemployment for the original, relatively less skilled population has remained essentially unchanged. Only the higher-skilled, new arrivals have found employment with the casino. It is the employment of these new arrivals that has decreased the unemployment rate.
Casino tax revenue is a benefit.
Issue 1:
Most states tax-adjusted casino revenue and use the taxes to fund state and local programs. In Missouri, the tax rate is 18 percent, and there is an additional 2 percent tax to aid local city governments. Indiana has a 20 percent tax rate. Illinois and Mississippi have a graduated tax schedule.
Casino proponents and state and local governments promote casino tax revenue as a benefit. This revenue is a benefit for the recipients of taxed casino revenue. However, it is important to realize that this revenue is not “new money” to society. Taxes result in a transfer of income from one group to another group. In this case, casino owners to state and local governments (and eventually to program recipients). So, for example, while the state of Missouri collected nearly $190 million in casino taxes during 2001, this $190 million is a cost to casino operators. Zero new money was created as a result of the casino tax.
Issue 2:
State governments use offline and TonyBet online casino tax revenue for various programs, but public education seems to be the favored destination for casino tax revenue in many states. States often promote how much money from casino revenue is earmarked for public education. This suggests to the public that spending on education has increased since the taxing of casino revenue began. Not necessarily.
The problem is that all earmarked revenue is interchangeable. Consider the following example: Your son is in college and spends $40 a week on pizza. You send him a check for $20 and insist that he spends the money on pizza. This suggests that his total spending on pizza will now be $60 a week. But nothing is preventing your son from taking $20 out of his original $40 and using it for something else, and then simply adding your $20 back to get the final $40.
The same works for state, local, and federal governments regardless of the tax and destination of revenue. If $100 million a year from casino taxes is earmarked for education, one would expect total education spending to increase by $100 million.
The swapping of casino revenue has yet to be tested empirically, but the issue has been explored using state lotteries. Numerous studies have found that in those states that earmark lottery funds for education, spending on education has not increased beyond historical trend levels after the introduction of the lottery. Essentially, contrary to the claim made by lottery officials, state lotteries do not appear to help public education. There is no reason to doubt the same result could occur with casino revenue.
Casinos help boost local retail sales.
The issue of whether casinos help or hurt local retail sales. Retail sales tax collections have received the most attention in the academic literature.
Another factor to consider is that many casinos have restaurants, shops, and hotel rooms for casino customers. All items purchased in these outlets are taxable under state and local sales tax laws. A possible loss in retail sales in the local community may be partly offset by an increase in retail sales activity in the casinos.
