The Effect of Legalized Gambling on State Government Revenue

14 Pages Posted: 12 Jan 2011

See all articles by Douglas M. Walker

Douglas M. Walker

College of Charleston - School of Business and Economics

John D. Jackson

Auburn University - Department of Economics

Abstract

Legalized gambling is an attractive option to state governments facing tightening fiscal constraints. Yet, the empirical evidence on the effect of gambling on state revenues is limited. Most studies examine a single industry in a single state, and for a relatively short period of time. This study provides a more general analysis of gambling industries and their effects on state revenues. We use data on gambling volume and state government revenues net of federal government transfers for all 50 states from 1985 to 2000. We find that lotteries and horse racing tend to increase state revenues, while casinos and greyhound racing tend to decrease state revenues.

JEL Classification: H2, H7, L8

Suggested Citation

Walker, Douglas M. and Jackson, John Douglas, The Effect of Legalized Gambling on State Government Revenue. Contemporary Economic Policy, Vol. 29, No. 1, pp. 101-114, 2011. Available at SSRN: https://ssrn.com/abstract=1738109 or http://dx.doi.org/10.1111/j.1465-7287.2010.00198.x

Douglas M. Walker (Contact Author)

College of Charleston - School of Business and Economics ( email )

Charleston, SC
United States

John Douglas Jackson

Auburn University - Department of Economics ( email )

415 W. Magnolia
Auburn, AL 36849-5242
United States

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