Betting on Jobs

“Casino Gaming and Local Employment Trends” by Thomas A. Garrett, in Review (Jan.–Feb. 2004), Federal Reserve Bank of St. Louis, Public Affairs Dept., P.O. Box 442, St. Louis, Mo. 63166–0442.

The prospect of jobs, jobs, jobs is one of the chief enticements held out by proponents of corporate casino gaming when they seek permission to operate in a community. Yet it’s by no means obvious that local workers are winners when the gambling establishment arrives.

“Most casino jobs require some skill, be it accounting, dealing cards, security, or other expertise,” observes Garrett, a senior economist at the Federal Reserve Bank of St. Louis. In an urban area, enough such skilled labor may well be available locally, but in a rural area, it may have to be imported from outside the community. Further, the introduction of casino gaming might cause some local businesses to close, and the resulting number of lost jobs might offset some or all of the new casino jobs.

The jobs question is not just academic. Corporate casino gaming, which generated more than $27 billion in revenue in 2001, is now available in 10 states—and is likely to expand to others as state governments feel the pinch of budget deficits that are collectively approaching $70 billion this fiscal year.

Garrett explored what happened to employment between 1986 and 2002 in six counties that introduced casino gaming during the early-to-mid-1990s: four rural counties (two in Mississippi, one in Illinois, and one in Iowa) and two urban (St. Clair, Illinois, and St. Louis, Missouri). In three of the rural counties, employment went up. The number of people working in Tunica County, Mississippi, for example, increased by 3,144 between late 1992, when the first casino was introduced, and the end of 2001, even though the population increased by only 1,172. So the increased employment benefited the precasino residents more than the new ones. Casino gaming is now Tunica County’s main industry, and it has apparently lifted other employment, especially in services, which went from 123 jobs in 1992 to 2,441 in 2001.

But the fourth rural area, Lee County, Iowa, had 1,846 fewer jobs at the end of 2001 than it had when a casino opened there in late 1994. In the same seven-year period, the county showed a population loss of 1,652. Perhaps, Garrett notes, casino gaming slowed the demographic hemorrhage.

The impact of casino gaming on the local residents of the two urban counties was harder to discern because casino employment was such a small part of the overall total. Nevertheless, the 1,184 casino jobs in St. Clair County were 11 percent of the county’s total jobs gain by the end of 2001, and the 2,050 casino jobs in St. Louis County were 12 percent of the gain there.

On balance, Garrett concludes, casino gaming appears a pretty good bet in terms of local employment, especially in rural areas.