Submission Type

Presentation

Submission Title

Is a Clustered or Dispersed Casino Location Model Better?

Session Title

Session 2-3-C: Regulatory Change and Models

Location

Caesars Palace, Las Vegas, Nevada

Start Date

29-5-2019 1:45 PM

End Date

29-5-2019 3:10 PM

Disciplines

Economics | Geography

Abstract

This paper will examine how regulatory models of casino location affect casino performance in various jurisdictions. Specifically, it examines how “clustered” casinos, such as those in the Mississippi Gulf coast or Kansas City, compare to those operating in a more “dispersed” regulatory model, such as that in Massachusetts, Kansas, and Ohio. The comparison focuses on economic performance, including variables such as industry and tax revenues, employment and wages, as well as other possible factors, such as voter and population location, tourism volume, and regional competition.

Conceptually, either a dispersed or agglomerated casino industry could generate economic benefits. Furthermore, economic benefits may be heavily influenced by the proportion of tourist activity to “locals’” activity. Agglomerated markets will perhaps attract larger numbers of tourists who find numerous entertainment options conveniently located together. So traveling to such a market ensures that a wide variety of consumers can find multiple entertainment opportunities. All of the casinos located within such a market are likely to attract a portion of visitors. Their goal is to be competitive relative to other nearby casinos.

On the other hand, dispersed casinos may be more likely to attract a larger number of local customers and those out-of-state, but in the immediate vicinity. Casino customers within the state are likely to travel to the closest casino in their state.

In short, it is not obvious which geographic location strategy would create more benefits for the casino industry and the hosting jurisdiction (in terms of government revenue). This is an important empirical question that would clearly impact law makers, regulators, and industry decision-making, with respect to the best strategy for expansion of the commercial casino industry in the US and elsewhere.

Keywords

casinos, economic performance, location, clustering, agglomeration, tourism

Author Bio

Doug Walker is a professor of economics at the College of Charleston, in South Carolina. Much of his research has focused on the socioeconomic effects of gambling. More recently, his work has focused on responsible gambling and behavioral economics. He was recently appointed a Research Fellow at UNLV's International Center for Gaming Regulation.

Funding Sources

This project is supported by a Research Fellowship at the UNLV International Center for Gaming Regulation.

Competing Interests

No competing interests exist. Funding received over the past three years is from sources that would not have a vested interest in the outcome of this research.

Comments

If funding sources are still needed, despite the statement on competing interests, please let me know.

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May 29th, 1:45 PM May 29th, 3:10 PM

Is a Clustered or Dispersed Casino Location Model Better?

Caesars Palace, Las Vegas, Nevada

This paper will examine how regulatory models of casino location affect casino performance in various jurisdictions. Specifically, it examines how “clustered” casinos, such as those in the Mississippi Gulf coast or Kansas City, compare to those operating in a more “dispersed” regulatory model, such as that in Massachusetts, Kansas, and Ohio. The comparison focuses on economic performance, including variables such as industry and tax revenues, employment and wages, as well as other possible factors, such as voter and population location, tourism volume, and regional competition.

Conceptually, either a dispersed or agglomerated casino industry could generate economic benefits. Furthermore, economic benefits may be heavily influenced by the proportion of tourist activity to “locals’” activity. Agglomerated markets will perhaps attract larger numbers of tourists who find numerous entertainment options conveniently located together. So traveling to such a market ensures that a wide variety of consumers can find multiple entertainment opportunities. All of the casinos located within such a market are likely to attract a portion of visitors. Their goal is to be competitive relative to other nearby casinos.

On the other hand, dispersed casinos may be more likely to attract a larger number of local customers and those out-of-state, but in the immediate vicinity. Casino customers within the state are likely to travel to the closest casino in their state.

In short, it is not obvious which geographic location strategy would create more benefits for the casino industry and the hosting jurisdiction (in terms of government revenue). This is an important empirical question that would clearly impact law makers, regulators, and industry decision-making, with respect to the best strategy for expansion of the commercial casino industry in the US and elsewhere.