Ohio's gamble on casinos

Sunday, April 09, 2006

Ohio is now moving down and of promoting casinos is economic development. Read more.

Casinos work as economic development strategies only in a relatively isolated cases. In particular, they are appropriate for rural regions that are within a reasonable driving distance of larger metropolitan areas. Casinos can operate as an effective way to shift income from stronger metro regions to weaker rural counties. (So, for example, the casino in Rising Sun, IN draws from metro Cincinnati.)

Given the competition from Las vegas and Atlantic City, casinos generally do not work well in larger metro regions. To be an income generator, casinos must attract over 60% of their patrons from outside the region. In metro areas like Detroit, hitting this target is very difficult.

An example from Louisiana illustrates the point. Casinos in Shreveport are successful as income generators. Located in the northwest corner of the state, Shreveport is able to draw patrons from Texas, Oklahoma and Arkansas (where gambling is outlawed.)

In contrast, casinos in Baton Rouge do little to boost the regional economy. These casinos have no clear target market from which to draw patrons.

Overall, the Great Lakes states are facing tough times ahead. Among these states, Ohio has been the worst performer. Staking the future on gambling will help some real estate developers, but it will not generate the innovation economy Ohio needs.

posted by Ed Morrison |

Subscribe with Bloglines

Creative Commons License
This work is licensed under a Creative Commons License.
The Web EDPro Weblog