Increasing Odds: the Impact of Casino Gaming Size, Location, and Economic Stream Style Differences on County Revenue in Pennsylvania
Date of Award
Doctor of Philosophy
Public Affairs and Administration
Dr. Robert Peters
Dr. Kevin Corder
David Rebuck, J.D.
casino, gaming, revenue, catchment, Pigovian Tax, spatial economics
As county administrators seek new revenue streams, casino gaming becomes a valuable local revenue production mechanism. Recently, Pennsylvania has been vastly successful with developing a conunercial casino market. The American Gaming Association in 2017 found that Pennsylvania has the largest sole commercial casino industry and highest effective tax rate in the United States. The case study of the Pennsylvania gaming industry is utilized to investigate plannable casino born factor impacts on county revenue. State and local regulations dictate the method and location (plannable factors) of permitted casino gaming via quotas and licensure. Casino born factors created as a result of implementing casino gaming (e.g. revenue agreements, hosting/bordering proximity, size, or physical location demographics) are tested in conjunction with traditional economic factors of per capita income and job sector growth rates to test the impact on total county revenue. The Pennsylvania case is examined using annual data from 1999-2017 to investigate the effects of 13 casinos on county economies.
The statistical model, hierarchal regression, used by this study allows casino born factors to be selectively added to the model which helped to isolate the impact of each variable grouping (style, size, distance) on revenue. The studied population starts broad by including all counties in the first two regressions, then narrows to focus on casino impact on only casino hosting county revenues. All regressions included the traditional economic variables. The impact of job rates was found to have mixed impact and significance on county revenues throughout the regression. Some jobs such as retail provided more positive revenue impacts, while others like construction did not. Per capita income had the most significant positive impact out of all the traditional variables, but the true focus of the work was on the impact of casino born factors on county revenues.
The first impact factors added to the regression measured whether physically being around a casino (hosting/bordering) is more important for revenue production, or, if a revenue sharing agreement is more valuable. The research generally indicates that revenue sharing agreements increase county revenues as does hosting a casino. The impact of bordering a casino hosting county on revenues was negative and consistent throughout the model. The size of a casino (measured by gross terminal revenues and/or the number of employees) was added to the regression model and counterintuitive results were found. Against expectations, the size of the casino, regardless of measurement style employed by this study, does not significantly impact revenue on a county level. The last regression introduced casino born location-based variables including the distance from a casino to the next nearest in and out of state population center and casino. Data results indicated that county revenues increased if a casino is placed closer to a state border, or, close to out of state population centers and away from other casinos and in-state population centers. The research provides insight to administrators contemplating the implementation of casino gaming as a local revenue generating mechanism by providing case research on economic stream style, size, and location impact.
Koch, Brandon W., "Increasing Odds: the Impact of Casino Gaming Size, Location, and Economic Stream Style Differences on County Revenue in Pennsylvania" (2020). Dissertations. 3552.