Lowell Sun, Thursday, January 13, 2005

Study finds casinos would have modest impact on state's economy

By Julie Mehegan, Sun Statehouse Bureau

BOSTON The introduction of Las Vegas-style casinos to the Bay State would bring modest gains in jobs and home prices, lead to slightly higher bankruptcy rates and reported crimes, but would have "surprisingly little impact" on the economy and crime in Massachusetts overall, according to a study being released today.

"Compared to the sometimes overheated rhetoric around the issue, our results were flaming moderate on this," said Phineas Baxandall, assistant director of the Rappaport Institute for Greater Boston and co-author of the study, titled "Betting on the Future: The Economic Impacts of Legalized Gambling."

Baxandall and his co-author, Dartmouth College economics professor Bruce Sacerdote, began their research after talking to policy-makers about the need for unbiased data on the effect casinos might have on the Massachusetts economy.

Gambling supporters have long argued that expanded gaming would be a financial windfall for the Bay State. As the economy nose-dived in recent years, the call grew louder for casinos and slot machines to help replenish the state's coffers.

But opponents say the social costs associated with excessive gambling and the financial burden on communities that host casinos would blunt any possible financial reward.

According to the results of the study, neither scenario is entirely accurate.

Researchers examined counties in the United States that have casinos and counties that do not, focusing on employment rates, home prices, bankruptcies, crime, revenue and spending.

Among the findings:

There was no significant difference in total government revenues and expenditures per capita in areas where casinos opened in the 1980s and 1990s compared to noncasino areas.

Per-capita spending and revenues declined slightly in areas with casinos, attributed to population increases.

While more total jobs were created in casino counties, the population in those counties also grew, resulting in little change in employment rates.

Median home prices in casino counties increased by about $6,000 over noncasino counties.

Personal bankruptcy rates in casino counties are about 10 percent higher [3.27 bankruptcies per 1,000 people] than in non-casino counties [2.98 per 1,000].

Total reported crimes increased slightly in casino counties, but only because of population increases. Overall crime rates actually declined.

"These results suggest that economic, fiscal or public safety factors are insufficient to either deny or invite casinos into Massachusetts," Baxandall and Sacerdote wrote, suggesting policy-makers consider "less quantitative factors" when debating casinos, such as whether they would alter the state's character.

Casino bills have been filed in every legislative session for at least a decade. Facing a lack of votes, a group of senators withdrew a proposal in 2003 that would have allowed two casinos and slot machines at the state's racetracks. The House rejected a similar proposal in 2002.

But lawmakers who support casino gambling continue their efforts. Several gambling bills are scheduled to be taken up in the session that began this month, including one that would allow two Indian casinos and slot machines at the tracks.

Massachusetts is one of only 14 states that does not allow either casinos or slot machines.

The full study can be found at www.ksg.harvard.edu/rappaport

Made available with permission of the publisher.