California communities with Indian casinos showed a noticeable increase in personal
bankruptcies and violent crimes compared to those without casinos over the last
decade, according to a working paper by researchers at Sacramento State.
The researchers also linked the casinos to a decrease in unemployment and an
increase in tax revenue, though they speculate that much of the revenue is spent
on increased policing. Findings are from county-level data on local tax revenues,
bankruptcies, employment and crime from 1990 to 2000. The study controls for
a variety of factors.
“We looked at the bad and good things people have said casinos bring,”
says Sacramento State student John Ortiz, who conducted the study with economics
professor Sean Corcoran. “There are bankruptcies and additional crime,
but there is also increased employment and revenue. So it’s hard to make
a sweeping generalization whether, on balance, casinos are good or bad for communities.”
Ortiz says the significant local revenue increases following a casino opening
come primarily from tobacco and hotel taxes. And he says the link between casinos
and personal bankruptcy rates, especially Chapter 7, was “highly significant.”
California, which is now second only to Nevada in casino gambling, has a pair
of initiatives related to gambling on the November ballot. Each could potentially
double the size of existing casinos.
Proposition 68 would allow some non-tribal businesses to expand casino operations
in the state and pay a 33 percent tax unless Native American tribes agreed to
pay a 25 percent tax on gambling revenue, while Proposition 70 would give tribes
exclusive and expanded rights to casino-style gambling in exchange for paying
the state corporate tax.
Ortiz worked in the California gambling industry before enrolling at Sacramento
State. He completed the study through the University’s McNair Scholar’s
Program.
Ortiz and Corcoran plan additional studies on topics such as casino effects
at the city, rather than county, level, and on how casinos have affected American
Indian tribes. Ortiz also plans further study on data hinting that the number
of gambling tables at casinos may lead to more social problems than the number
of slot machines.
More information is available by contacting economics professor Sean Corcoran
at 278-7653 or corcoran@csus.edu.
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California State University, Sacramento • Public Affairs
6000 J Street • Sacramento, CA 95819-6026 • (916) 278-6156 •
infodesk@csus.edu
California State University, Sacramento • Public Affairs
6000 J Street • Sacramento, CA 95819-6026 • (916) 278-6156 • infodesk@csus.edu
