Abstract
Abstract This paper studies the entry and tax regulation of oligopolistically competitive privately run casinos and government‐run casinos in a jurisdiction. We highlight three important external effects from casino‐style gambling: non‐casino income creation, social disorder costs, and cross‐border gambling. The laissez‐faire equilibrium need not be overcrowding compared with regulated or government‐run regimes. Entry regulation may lead to higher jurisdiction welfare than tax regulation. Government‐run casinos always operate on a larger scale and achieve higher welfare than other regimes, given the same number of casinos. With an endogenous fraction of external gamblers, a dispersed casino configuration yields higher welfare than a centralized one.
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