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Wednesday, April 03, 2013


Could the economy affected the results of this study?

I think researchers here make a great point that we really need a longitudinal study to be able to understand this better. At this point, even in Iowa, we really don't have enough data to state for sure that gambling participation increases initially when gambling is a novelty and then decreases. Some data indicate that this may not be the case:


One thing to note is that the gambling participation seems to stay steady and at a higher rate than when gambling is introduced. As gambling becomes more available, it is likely that the trend continues, which is certainly the case throughout the rest of the country.

Great work, thanks!

A factor that might not be considered is taxation of gambling revenues in new markets. Pennsylvania taxes slot revenues at 55% and table games at 25%, and Maryland taxes slot revenues at 66%. Compare this to Nevada (7%) and New Jersey (8.5%, which breaks down as 7% tax and 1.5% mandatory investment in Atlantic City).

For a casino operator to make their expected profit in a newer, higher tax market, the games have to have a greater negative expectation to pay the higher taxes. This may lead gamblers to burn out or go broke that much sooner.

Other factors are the growth of so-called "carnival games" like three-card poker (higher house advantage than blackjack or baccarat) and volatility of returns on slot machines. Double Diamond, which has been in use in casinos for 20 years or longer, has a maximum payout of 799:1. Slot machines that pay 5000 coins per coin bet can be found. The growth of so-called penny slots that allow $2.50 a spin or more to be bet and where most of the payout lies in hitting a bonus round, are probably also contributing to the decline in gambling over time.

To answer the other commenter, Pennsylvania had the highest slot revenue in their history in March 2013.

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