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Spring 2000

Research Magazine > ARCHIVE > Spring 00 > Article

Gambling on Casinos
by Arthur Sands

A plus B doesn't always equal C. Not when you're dealing with the statistics of casinos.

As more states allowed gambling casinos in the past decade, the consensus was that casinos lowered the crime rate in the communities in which they were located. Lobby-ists, developers and management pointed to studies showing dips in the crime rate after a flurry of casino construction in the 1990s.

"I thought it was fundamentally wrong," said David Mustard, a UGA Terry College of Business professor. "They weren't showing the whole picture, and many of the studies were funded by the gambling industry."

In his studies, Mustard compared the crime rate in counties where casinos opened to the rate in casino-free counties. Indeed, crime decreased in casino counties, his study showed, but at a much smaller percentage than in casino-free counties.

Casino counties had an average of 8 percent more crime than non-casino counties.

Complicating the picture for local policymakers is that the crime rates didn't increase right away. For instance, crime often did not increase until the second or third year. By the fifth to seventh year, aggravated assaults were up more than 50 percent and robbery by more than 70 percent in the counties Mustard studied.

Mustard's research doesn't differentiate between Atlantic City or Vegas-style casinos and Riverboat or Indian Reservation casinos. He hopes to explore that more in a subsequent study. For this project, any facility the government classified a Class III gaming facility (excluding bingo parlors and lotteries, for instance) would be applicable.

So why is the crime rate higher in casino counties?

Largely, because the addictive nature of gambling is a recipe for trouble. Casinos may increase crime by attracting unsavory clients, more visitors and the outgrowths of legal gambling, such as prostitution, Mustard said.

"The sheer addictiveness surprised me a bit," Mustard said. "About 80 percent of gamblers who go to Gamblers Anonymous have committed crimes. It starts innocently enough. A casino goes into a county, a couple of months later, you visit it.

"You get slowly hooked. You exhaust your savings. You start borrowing from your credit card. You borrow from your friends. It may take a few years before people go through this process and start committing crimes," he said. "There's a compulsion to continue that behavior, and you have to obtain more resources."

Mustard recently presented his findings at the American Law and Economics Association, the University of Buffalo and the University of Rochester. He also was a recent guest of the FBI in Louisville, Ky. - a major battleground for the legalization of casinos.

Mustard said future studies will show whether casinos in rural areas have the same impact as those in highly populated cities. He also plans to examine differences in geographic areas and among Indian Reservations.

For more information, access http://www.terry.uga.edu/~dmustard/ or e-mail mustard@terry.uga.edu.

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