Casinos don’t help state budget deficits

By Richard Nelson


February 6, 2015

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One of the strongest arguments to expand gambling in Kentucky is that we are losing tax revenue to other states. The problem however, is that other states with casino revenue have larger budget deficits than those with no casinos. Consider:

Commercial Casinos
State    Adjusted Gross Casino Rev (2012)        Budget Deficit (2012)

NV                $ 10,860,000,000                            $ 1,200,000,000 

PA                  $ 3,160,000,000                             $ 3,700,000,000

NJ                  $ 3,050,000,000                            $10,000,000,000

IN                   $ 2,610,000,000                             $ 1,300 ,000,000

LA                   $ 2,400,000,000                            $ 1,600,000,000

MS                  $ 2,250,000,000                            $ 630,000,000

NY                  $ 1,800,000,000                             $ 10,000,000,000

MO                 $ 1,770,000,000                              $ 704,000,000

IL                    $ 1,640,000,000                             $ 5,000,000,000

IA                    $ 1,470,000,000                             $ 149,000,000


Isn't it interesting that the casino capital of the northeast, New Jersey, has a state budget deficit nearly three times the casino revenue?

Native American Casinos

CA                                                                   $ 23,000,000,000             

CT                                                                   $ 2,900,000,000

MN                                                                  $ 3,800,000,000  

NY                                                                   $ 10,000,000,000

OK                                                                   $ 500,000,000

WI                                                                    $ 1.600.000,000


States With No Casinos, No Lotteries
UT                                                                    $ 390,000,000

HI                                                                     $ 540,000,000

AK                                                                    $ 0

AL                                                                    $ 979,000,000

AR                                                                    $ 0

WY                                                                   $ 0 


Is it just a coincidence that the presence of casinos impacts state budget deficits? Serious policy makers ought not to neglect the correlation. Anti-casino advocates have argued for years that when people are losing their money by gambling it away (see column B above) they have less to spend on other goods and services. Purchases of those other goods and services are an important revenue stream to state governments. It's a revenue stream that doesn't end up hurting large numbers of people who develop addictions. Which brings up another point. When individuals succumb to gambling addiction, they become a burden on the state. This is yet another explanation for massive budget deficits in states with casinos.  There has yet to be a casino-expansion bill filed  in Frankfort. Perhaps legislators are getting the memo.


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