A decade-long study by University of Massachusetts Amherst researchers has revealed a complex picture of casino gambling’s impact on the Bay State. While the industry generates substantial economic benefits, it relies heavily on at-risk gamblers for revenue, raising important questions about the social costs of legalized gambling.
Summary: The most comprehensive casino impact investigation ever conducted shows Massachusetts casinos have created thousands of jobs and billions in economic activity, but 90% of revenue comes from at-risk and problem gamblers. The study tracked impacts before and after the opening of three casinos between 2015-2019.
Estimated reading time: 15 minutes
The Economic Success Story
When Massachusetts lawmakers approved casino gambling in 2011, they hoped to create jobs and keep gambling dollars within state borders. By those measures, the initiative has largely succeeded. The construction of three casinos – Plainridge Park, MGM Springfield, and Encore Boston Harbor – injected $2.8 billion into the state economy and employed more than 8,000 full-time construction workers.
Today, these venues employ approximately 5,000 people and generate $1.15 billion in annual gross gaming revenue, plus another $321 million in non-gaming revenue. State coffers have benefited significantly, with gaming tax revenue rising from $78 million in 2016 to $330 million in 2023.
“Overall, the three casinos have generated a significant amount of economic activity, both during the construction and operational phases of the casinos. Further, the facilities provided resilience during the post-COVID recovery period,” said Mark Melnik, who leads the SEIGMA economic team at the UMass Donahue Institute.
The Hidden Costs
But beneath these impressive numbers lies a more troubling reality. The SEIGMA study found that 90% of casino revenue comes from at-risk and problem gamblers – a sharp increase from 74% in 2013-2014. This concentration of revenue from vulnerable populations has raised serious concerns among researchers.
“The biggest negative impact from our perspective is that most of the revenues generated by the casinos come from people who are at risk for or experiencing gambling problems,” said lead investigator Rachel Volberg, research professor of epidemiology in the School of Public Health and Health Sciences.
The economic ripple effects have been mixed. While casinos have created thousands of jobs, about 75% of their employees left other full-time positions to work at the casinos, creating workforce challenges in other sectors. Moreover, only 39% of casino employees earn a living wage for their county, though this exceeds typical rates in the accommodations and food services sector.
A Shifting Landscape
Local businesses have felt the impact of the casinos’ presence. Between 46% and 80% of casino patrons report spending less at other establishments, particularly restaurants and bars. As Melnik explains, “Businesses in the recreation and leisure sectors of the economy always compete for the disposable income of consumers. While the Massachusetts casinos attract new consumers from outside of the state, it is not surprising to see some level of competition for both labor and customers in this industry sector.”
Public attitudes toward gambling have grown increasingly skeptical. A majority of Massachusetts residents now believe gambling is too widely available, and overall casino patronage appears to be declining. These trends, combined with increased traffic, accidents, and a small but significant rise in illegal gambling, suggest the state may have reached casino saturation.
The researchers recommend developing strategies to reduce reliance on at-risk gamblers and carefully considering any gambling expansion plans. “The message to the Legislature would be to slow their roll on legalizing any other type of gambling,” Volberg noted.
Quiz
- What percentage of casino revenue comes from at-risk and problem gamblers in 2021-2022?
- How much do Massachusetts casinos generate in annual gross gaming revenue?
- What percentage of casino employees left other full-time jobs to work at casinos?
Answers:
- 90%
- $1.15 billion
- 75%
Glossary of Terms
- SEIGMA: Social and Economic Impacts of Gambling in Massachusetts
- Gross Gaming Revenue: Revenue after prizes but before operational expenses
- At-Risk Gambler: Individual showing signs of potential gambling problems
- Living Wage: Pay rate allowing workers to meet basic needs in their county
- Gaming Tax Revenue: State taxes collected from casino gambling operations
For more information about the study methodology and detailed findings, visit the Massachusetts Gaming Commission website.
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