The Negative Impacts Of Legalized Gambling On Businesses

Under good economic conditions, but particularly during recessionaryperiods, there is usually intense competition between states to attract newbusinesses. New businesses improve local and state economies by providingan influx of investment dollars, jobs, and new tax revenues. As statesand municipalities attempted to boost economic growth during the recessionaryU.S. economy of 1991-1992, the legalized gambling organizationsin Nevada and in Atlantic City, New Jersey, saw the perfect opportunity toexpand their organizations into previously unexploited regions. Notwithstanding contrary positions argued by legalized gambling interestsin their efforts to gain and exploit new population bases, and withrare exceptions, legalized gambling activities do not generate long-term oreven mid-term strategic economic development or tax revenues. Anyprofit generated by legalized gambling almost invariably comes from someconsumer's pre-existing funds, and the resources devoted to gambling aretaken from other activities. In fact, legalized gambling interests have bothpromoted and discouraged legalized gambling when necessary to furthertheir objectives. In one instance, major legalized gambling organizations conducted public relations campaigns arguing that their casinos wouldcreate economic development, jobs, and tax revenues in Illinois. However,in order to undercut their competition in California and preserve theirown gambling operations in Nevada, some of these same organizationssimultaneously conducted public relations campaigns in California arguingjust the opposite.