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Last Updated: Tuesday, 23 November, 2004, 23:31 GMT
Do casinos bring riches to provincial towns?
Stephen Evans
By Stephen Evans
BBC North America business correspondent

The Argosy Casino in Riverside, Missouri is a cavern of delight.

Argosy casino
Welcome to the pleasure dome
Inside a windowless hall in a newly-built, fantasy castle, there are 1,750 slot machines which flash and chirrup.

In the past year, nearly two million gamblers have fed more than $100m into their ever open maws.

But five minutes' drive from the casino is another cavern of delights: Riverside City Hall has a state of the art council chamber with a state of the art fire and police station attached. It is the sort of municipal facility that local politicians dream of being able to afford.

The latter, of course, has been paid for by the former.

Many see this as a formula that could be replicated in the UK where the government is currently considering relaxing its gambling laws to allow more casinos.

Riverside boon

For Mayor Betty Burch in Riverside, it is a bitter-sweet balancing act.

They put the casinos in the depressed communities and they found that the gamblers were economically depressed people because the casinos were near those people
Professor Bill Thompson, a specialist in gaming studies at the University of Nevada, Las Vegas
Riverside's facilities in which she takes such pride were financed by taxation from the casino, but the grim side of that bargain is that Mrs Burch's sister became a gambling addict in the process.

All the same, Mayor Burch remains convinced that the price was worth paying. She agonised as a political leader before putting her weight behind acceptance of the casino on the grounds that its revenue would pay for all kinds of facilities from a community centre to paving.

If you ask her now, she will tell you that she doesn't want to talk about her sister's problems beyond saying that she is very sad about it and that they don't alter her opinion that the casino has been a boon for Riverside.

Recycling money

Which it probably has.

But does that mean that all small towns should get themselves a casino sharpish to fill the municipal coffers to the public's benefit?

Argosy casino
What sort of people will come?

Not exactly. The economics of casinos depends on where the gamblers come from. Broadly, if gamblers can be enticed from outside a town, the town itself benefits from the spending.

Las Vegas would still be a small town in the desert were it not for gambling by the millions who bring their money from across the world.

As Professor Bill Eadington, the Director of the Institute for the Study of Gambling at the University of Nevada at Reno, says: "When most of your visitors are coming from outside that region then a casino can be a very strong economic engine for stimulating that particular regional or local economy."

If, though, a casino is put in a large, existing city and attracts mostly local people, then it is merely recycling local money.

Depressed

There is, of course, a benefit if outside companies can be attracted to build a casino in the first place. And if local people decide to gamble in their local casino rather than, say, flying to Las Vegas or even driving to the one in the neighbouring town, then that's an economic gain too.

Argosy casino
Earnings taken here pay for services elsewhere

Correspondingly, there's a loss if taxation of gambling is removed to the capital city far away or if profits are removed to parent companies in America or Australia or South Africa or any of the other countries with big gaming companies.

So, for many towns, the gain of the casino is not as great as it might seem.

The punters do spend, but it's money that might well have been spent locally anyway.

As Professor Bill Thompson, a specialist in gaming studies at the University of Nevada, Las Vegas, puts it: "They put the casinos in the depressed communities and they found that the gamblers were economically depressed people because the casinos were near those people."


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