Research addressing the Impact of Indian Gaming on Other Businesses

There is no national study of the impact of Indian gaming on other businesses. A study of that scope would be methodologically challenging and probably rely on vast generalizations. However, research on the impact of Indian gaming on other businesses, known as the substitution effect, has been done at the regional level. In general, this research shows that Indian gaming does not harm other businesses. It also shows that the economic development stimulated by Indian gaming often results in positive changes in retail sales in gaming counties. Additionally, research on the impact of casinos on restaurants shows that all aspects of the food and beverage business increase when casinos are developed.

The Arizona Experience [1]

Local tavern and restaurant associations are often the primary complainants against casino introductions in public policy debates. Of particular concern to this sector is its perceived vulnerability to low-priced food and beverage service offered by the casinos as inducements to patrons. [2] Researchers studying Indian gaming in Arizona analyzed county-level sales in the eating and drinking, food, and general merchandise sectors. In each instance, they examined the change in sales in these sectors from the year prior to the opening of the casino and compare it to the change in the state average over the same period. The results do not show a uniform difference between counties that witnessed the introduction of gaming and state averages. This before and after comparison cannot conclusively establish a causal link between Indian gaming and harm to retail sales in gaming counties.

The Wisconsin Experience [3]

A University Study of the impacts of Native American Gaming (NAG) in Wisconsin shows that “The introduction of NAG has probably enhanced the visitor volume during the peak-season. This is supported by the fact that 51.9% of the businesses experienced and increase while only 6.3% experienced a decrease.” [4] In addition to increasing visitor volume and sales during the peak season, NAG also enhanced the off-season market for other businesses in Wisconsin. The study finds that:

The Impact of Gaming on Restaurants 

According to a university Study, “When Casinos are developed, all aspects of the local food and beverage business increase:  the number of establishments increases—the number of people employed increases—and the payroll increases at an even greater rate than the first two.” [5]

 According to Arthur Anderson, there is a positive relationship between the growth of gaming and restaurants. For example, after a casino was built in Bossier City, Louisiana, the taxable restaurant sales, excluding restaurants in hotels and casinos, increased 5% the first year and 7% the second. [6]