Handbook on the Economics of Crime
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Handbook on the Economics of Crime

Edited by Bruce L. Benson and Paul R. Zimmerman

While few economists analyzed criminal behaviour and the criminal justice process before Gary Becker’s seminal 1968 paper, an enormous body of economic research on crime has since been produced. This insightful and comprehensive Handbook reviews and extends much of this important resulting research.
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Chapter 19: Casinos and Crime in the USA

Douglas M. Walker


Douglas M. Walker* INTRODUCTION The modern casino era in the USA began in 1931 when Nevada legalized commercial casinos. Since then, Las Vegas has grown into the premier casino destination in the USA. It was not until 1976 that commercial casinos were legalized elsewhere (Atlantic City, NJ). The latest wave of commercial and tribal casino development began with the Supreme Court’s 1987 decision in California v. Cabazon Band of Mission Indians and the 1988 Indian Gaming Regulatory Act (IGRA). At stake in California v. Cabazon was whether tribal gaming fell under the State’s regulatory powers. The Court held that states lacked authority to regulate tribal gambling. With the IGRA, Congress delegated power to the states to regulate Indian gaming and laid down conditions under which tribal gaming could be offered. In practice, the legislation has meant that federally recognized Indian tribes can offer a particular form of gambling on their reservation, so long as that type of gambling is not banned under state law. States are expected to negotiate with the tribes in good faith in developing state–tribal compacts for casinos. As a result of these legal events, tribal and commercial casinos began to spread across the USA in the late 1980s. As of 2007, there were more than 460 commercial casinos operating in 12 states, with revenues of over $34 billion. Figure 19.1 shows the trend in commercial casino revenues since 1998. Taxes paid to state governments were $5.8 billion (American Gaming Association, 2008). There are over 420...

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