Casino Economics a Hazy Area
In late 2000, a casino company came to Jefferson County, Mo., with a bold prediction.
As it pitched a new casino in Kimmswick, Isle of Capri Casinos Inc. boasted that the project would pump $199 million into the local economy.
But here's what the company later kept quiet: An economist from Nebraska came to a very different - but equally eye-popping - conclusion. The casino would have been a tiny gain for the county and a loss for Kimmswick, he said.
Welcome to the hazy art of casino economics, a field that's gaining importance for the St. Louis region, with more than $1 billion of gambling industry investment on tap over the next few years.
During such expansion, casino backers routinely pump up the value of gambling parlors as a boon for the local economy.
The truth often isn't so rosy, nor is it so clear cut. Most experts say casinos can help distressed neighborhoods, bring jobs to small towns and generate millions of dollars in tax revenue. But these gains often come at the expense of other groups, such as restaurants and movie theaters.
A casino can have a significant regional economic benefit only if it draws out-of-town gamblers in droves, said Charles Leven, a professor emeritus of economics at Washington University. ''That's worked for Atlantic City, and Las Vegas practically lives off of it," but it's unlikely to pan out the same way for the two new casinos that Pinnacle Entertainment Inc. is building on the western banks of the Mississippi River, he said.
''Yes, there's going to be an impact from these new casinos," Leven said. ''And, yes, it's going to be positive. But it's going to be modest, and it's going to be vastly smaller than what the casino operators claim."
June 26, 2006
Posted By Susan Torres
Staff Editor, CasinoGamblingWeb.com
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