The impact of legalized casino gambling on crime

Abstract

The expansion of casino gambling has been controversial, with the economic and crime impacts heavily debated. Yet, few studies have considered the impact casinos have beyond the border of their host community or state. Using county-level data between 1994 and 2012, this paper examines the impact that casino legalization had on crime rates using a Spatial Durbin Model (SDM) to account for spatial dependence. A difference-in-differences model suggests that in the long term commercial casinos are associated with no significant change in crime in their host county, but crimes in surrounding adjacent counties do significantly increase. Indian casinos in contrast are associated with long-term reductions in crime in their surrounding counties. However, a distributed lag model, used to detect year-to-year variation in crime, reveals that both commercial and Indian casinos are associated with increases in crime in the years immediately following their opening. For commercial casinos these increases were statistically significant in the host county for six years, whereas for Indian casinos a statistically significant increase occurred in the first two years after opening. Impacts on surrounding adjacent counties were also significant but generally for fewer years. These initial increases in crime were offset by significant decreases in crime many years later explaining the long-term pattern captured in the difference-in-differences model.