LJWorld.com / Study links bankruptcy, proximity of casinos

Archive for Monday, March 15, 2004

The Associated Press

March 15, 2004

Omaha, Neb. — A Creighton University study on possible casino links to bankruptcies revealed differing results for individuals and businesses.

The recently released study showed personal bankruptcy filings in counties with casinos were higher than in noncasino counties in the United States during the 1990s.

However, the study showed business bankruptcies in casino counties were lower on average than in noncasino counties.

Associate law professor Edward Morse and economics professor Ernie Goss conducted the study that charted 250 U.S. counties containing casinos. They compared bankruptcy filings from 1990 to 1999 to noncasino counties of similar population, income, and rates of poverty and employment.

The study found that individual bankruptcies were more than 100 percent higher in casino counties than in noncasino counties. But casino counties had 35.4 percent fewer business bankruptcies.

The report's authors did not take into account a county's debt load. It is possible that a casino county's population had a higher debt load before the casino arrived and the casino did not add to that debt load, a report on the study said.

Morse theorized that individual bankruptcies outpace business bankruptcies in casino counties because the casino increases potential for problem gamblers in that county, thus causing more bankruptcies for individuals.

"It's consistent with people's intuition about the impact a casino has on a local population," Morse said.

Businesses may not be negatively affected by these compulsive behaviors.

"In many jurisdictions, the business community surrounding a casino may well experience beneficial economic impacts from the inputs and services that casino operations require," the report said.