A new study by the Rockefeller Institute of Government shows that states get only a short-term boost by legalizing gaming to solve budget deficits or otherwise raise revenue without imposing politically unpopular new taxes.
The report by the public-policy research group says post-recession casino openings have not generated nearly the amount of taxes and fees as before the economic crisis of 2008, particularly with the added element of market saturation. Even once-stalwart lottery revenues have declined for two years in a row.
“History shows that in the long run, the growth in state revenues from gambling activities slows or even reverses and declines,” the study said.
The saturation of the gaming market is evident not only from the collapse of Atlantic City, which saw its property tax base shrink nearly 70 percent after casinos opened in Pennsylvania, Delaware and Maryland. The study found that inflation-adjusted revenues from commercial casinos declined 1.5 percent between 2008 and 2015. While revenues grew in states with newly authorized casinos, they declined in states with older, established casinos.
When considering taxes and fees from all major sources of gambling, including lotteries, revenues grew by only $0.5 billion, or 1.8 percent nationwide during the same period, the study found.
