Gaming,States, and Tax Revenues—the Tortoise or the Hare: A CGE Comparative Assessment of Casino Resorts and Games‐Only Casinos

Theoretically speaking, heavy tax rates on gambling should dampen growth of the casino revenues. Indeed, a cursory glance at data across U.S. states suggests that more jobs and income are generated directly by the gaming industry when lower tax rates are applied. Using a detailed computable general equilibrium model, we evaluate the effects of a proposed machine‐based casino on New Jersey's economy as well as on the state's existing set of casino resorts in Atlantic City. We find few winners other than the state's tax coffers.