Abstract
For many years regions have benefited from the existence of pari-mutuel horse racing tracks. Significant government revenue has been generated, racing and horse related industry has been developed, and tourism has been greatly increased for these regions as a direct result of the existence of a pari-mutuel race track. Supporters of racing point out that the race tracks provide jobs and revenue for the area, and that the development which accompanies the tracks does not lead to some of the negative externalities associated with industrial development. Recognizing these benefits, many states are contemplating or have recently passed laws to allow pari-mutuel betting. These states hope that pari-mutuel race tracks will bring economic development to and provide government revenue for the region. This paper develops a theoretical model and uses empirical analysis to identify the factors which determine the success or failure of pari-mutuel horse racing tracks.
Highlights
As of 1987, 27 states sanctioned pari-mutuel horse racing and had operating race tracks
Supporters of racing point out that race tracks provide jobs and revenue for the area, and that the accompanying development is free of the negative externalities associated with heavy industrial development [Kopp Du Teil (1990)]
Arguments against horse racing and other forms of gambling are made by religious groups and animal rights advocates [Kopp Du Teil (1990)]
Summary
As of 1987, 27 states sanctioned pari-mutuel horse racing and had operating race tracks (see Table 1). New Mexico New York Ohio Oklahoma Oregon Pennsylvania Washington West Virginia Wyoming. Benefits from pari-mutuel horse racing tracks include significant government revenue, the development of racing and horse related industry, and tourism. Arguments against horse racing and other forms of gambling are made by religious groups and animal rights advocates [Kopp Du Teil (1990)]. Some religious groups, which represent large constituencies, oppose gambling. They and others believe that there is a correlation between horse racing, gambling and crime and corruption. On these bases, opponents argue against sanctioning pari-mutuel racing
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