Difficulties with the Casino Industry

A recent article by the Wall Street Journal discusses a Casino Boom in New England where lawmakers are planning to allow the building of two new casinos. Among those eyeing the rights to build the Casino are Native American tribes who already run the Foxwoods Resort Casino and Mohegan Sun Casinos in Connecticut. A congested casino market such as this poses many problems particularly among the Native American Tribes that seek to own them.

First of all, when the government allows new casinos to be built geographically close to preexisting ones, this competition can result in financial difficulty for existing parties. People often flock to city-based casino hubs such as Las Vegas, Detroit, and Atlantic City to name a few. When casinos are built closer to people who would usually travel to a city, they have more incentive to go to the closer casino purely out of convenience. In 2014, Atlantic City had 4 out of its 12 casinos close due to financial difficulty. The reasoning behind the lack of interest in Atlantic City could be for a variety of reasons but some speculate is was because people are going to casinos closer to their homes. Relating this to the New England area, in an already small geographical location the competition with too many casinos might be harmful to the industry there as a whole.

Aside from the industry difficulties, tribes involved with Native American casinos tend to face poverty issues among their members. An article by The Economist about how cash from casinos makes Native Americans poorer states, “Of the 17 tribes in the study that handed profits directly to members, ten saw their poverty rates rise. Of the seven tribes that did not, only two saw such an increase.” The tactic of sharing the profits with the members of the tribe is more common yet it has more negative affects. When people specifically from lower income brackets are given excess money from their tribe’s casino, they have the temptation to go try and gamble their profits for hopes of more. This results in people wasting money and possibly developing gambling addictions. If casino profits are not handled well, tribes may be inadvertently harming their own members.

Overall, I think casinos are great for attracting tourism and boosting a local economy. I also believe that lawmakers need to be more careful in their decisions regarding placement of new casinos. The market is delicate and according to this article, it has only just recently picked up after a gradual decline from 2001-2010.












2 thoughts on “Difficulties with the Casino Industry

  1. luctommo@umich.edu'Lucas Morrison

    Very interesting that there appears to be a correlation between casino profit distribution amongst tribes and poverty rates. Perhaps tribes should explore the possibility of using the funds to make investments in things like infrastructure and public services so that the money stays within the tribe.

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