Casinos: Good or Bad for the City You Live In?

Many cities in Canada have placed their bets on casinos to help drive economic activity and stimulate development. With the economy continuing to sputter along, many places are looking to felt covered tables and one-armed bandits as saviours. Once thought of as 'Toronto The Good', Ontario's capital is the latest municipality thinking of going Vegas, but is the glitz and glamour all it's made out to be? Let's take a look at how a casino can help or hinder a city.

Tax Revenue
Gambling in Canada is big business. Last year, all legalized gambling contributed $13.7 billion in net revenue to governments. Casinos contributed 34% of that total. While this certainly sounds great, some research shows that governments that build casinos don't always spread their new wealth as expected. Instead of building roads and schools, for example, there is evidence that governments use gambling revenue on other priorities like debt reduction, which don't have the same immediate impacts on the people living in the shadow of the casino.

Tourism
One of the mantras casino supporters like to repeat is, "if we build it, they will come." Tourism is seen as one of the great benefits to any city willing to put up the tens of millions of dollars required to build the neon palace. Okay... but. Research out of the University of Nevada, Reno (where they know a thing or two about gambling) points out that the benefits of tourism tend to be felt only by smaller, rural areas or resorts with casinos (ie. destination casinos) because weekend James Bonds have to travel to get there and are likely to eat at the local restaurant and complete their souvenir spoon collection at the gift shop.

Job Creation
Employment rates are stagnant across the country so casinos look like a great solution: build a big, flashy building and stuff it full of hospitality workers and blackjack dealers. The problem with working in the gambling industry is that it's not always that well paid. According to a recent Statistics Canada report, workers in the gambling industry were paid, on average, $21.95 an hour versus $24.05 for workers in other industries (they were, however, more likely to receive tips). Another factor to consider is that casinos can have a negative impact on employment in surrounding businesses. If a casino has a restaurant, for example, patrons are less likely to leave to discover the neighborhood bistro around the corner.

Crime and addiction
Studies have shown that the introduction of gambling through a casino into a community can increase the rate of problem gamblers. While the effects of this have been hard to track,it seems that problem gambling can be linked to divorce, personal bankruptcies and even suicides. It appears casinos can lead to increased crime in a community, particularly financial crimes like money laundering, counterfeiting and cheating at the tables. Also, research shows problem gamblers can be involved in property crimes to support their habit.