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ABSTRACT
Corporate casino gambling has expanded from being legal in only two U.S. states (Nevada and New Jersey) in the late 1980s to 12 states in 2006. As a result, the annual gambling revenue realized by the casino industry has grown from $9 billion in 1991 to over $32 billion in 2006. The growth of gambling in many states has not been matched by a corresponding increase in academic research on casino gambling. To shed more light on casino gambling and state budgets, this research examines state education spending following the introduction of corporate casino gambling and attempts to answer the following question: Does gambling revenue earmarked for education spending displace funds usually spent on these programs?
INTRODUCTION
Corporate casino gambling has expanded from being legal in only two U.S. states (Nevada and New Jersey) in the late 1980s to 12 states in 2006. As a result, the annual gambling revenue realized by the casino industry has grown from $9 billion in 1991 to over $32 billion in 2006. The growth of gambling in many states has not been matched by a corresponding increase of academic research on casino gambling. The majority of studies on corporate casinos focus on the social vices associated with gambling (Schofield, Mummery, Wang, & Dickson, 2004; Shaffer & Kidman, 2004; Raylu & Oei, 2002; Welte et al., 2001; Bondolfi, Osiek, & Ferrero, 2000; Slutske et al., 2000; Korn & Shaffer, 1999; Miller & Westermeyer, 1996; Smart & Ferris, 1996), such as increases in violence and pathological gambling (Berman & Siegel, 1992; Castellani, 2000; Herscovitch, 1999). Some studies on the economic impact of casino gambling are commissioned by corporate casinos to tout their economic benefits to states and localities. There are only a few rigorous academic studies on the fiscal impact of casino gambling. In general, most citizens and policymakers lack sufficient information about the fiscal impact of gambling taxes on state budgets.
In order to shed more light on the relationship between casino gambling and state budgets, this research examines state spending displacement following the introduction of corporate casino gambling and attempts to answer the following question: Does gambling revenue earmarked for state education spending displace funds usually spent on these programs? Based on promises made to gain public...