•  
  •  
 

Keywords

casino markets, threshold, range, regional development, competition

Disciplines

Gaming and Casino Operations Management | Gaming Law | Public Economics | Regional Economics

Document Type

Original Research Article

Abstract

This paper utilizes data on Missouri’s casino industry to examine how clustered casinos, such as those in Kansas City and St. Louis, perform compared to dispersed or isolated casinos, such as those in Boonville, Caruthersville, La Grange, and St. Joseph. Missouri limits the number of casino licenses allowed; however, it does not explicitly mandate casino locations. Missouri provides a unique natural experiment for comparing location model performance. Although there is no published research on which type of casino location model is more effective for generating industry revenues and associated taxes, state legislatures have nevertheless been following an isolated casino location model. But it is not at all obvious that this strategy leads to higher aggregate revenues. Using 2011 data on Missouri’s casino industry, we find that casino performance may not depend on whether it is isolated or in a cluster. This result suggests that the casino market is relatively efficient, given the regulations it faces. However, there may still be significant costs from restricting casino locations. We speculate that politicians are likely to use the isolated model as a mechanism to maximize voter support for casino legalization.

Funding Sources

Doug Walker received support for this project through a Research Fellowship from the UNLV International Center for Gaming Regulation. Other than approval of the topic as a part of the Fellowship application, the ICGR had no involvement in any aspect of the study. Additional funding was provided by the Center for Public Choice and Market Process at the College of Charleston; the CPC had no involvement in any aspect of the project. Todd Nesbit received no funding for this project.

Competing Interests

Since summer, 2020, Doug Walker has received a stipend as a Senior Fellow at the Center for Public Choice at the College of Charleston. He has received travel reimbursements from the College of Charleston (State of South Carolina) to present gambling-related research, compensation for consulting work from Meister Economic Consulting and Aristocrat Technologies, and honoraria for research presentations from the City of Yokohama, Japan, and Georgia College (University System of Georgia). Todd Nesbit has no competing interests.

Download


Share

COinS