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UNLV Report Examines Economic Dynamics of Casino-Resort in Toronto

UNLV International Gaming Institute report contends a casino-resort would not harm existing businesses.
Research  |  Nov 2, 2012  |  By Afsha Bawany
Media Contact: Afsha Bawany, UNLV Media Relations, (702) 895-5515
The development of an integrated casino-resort would likely stimulate the Greater Toronto Area economy according to a UNLV International Gaming Institute report. (Aaron Mayes / UNLV Photo Services)

A new UNLV International Gaming Institute (IGI) report concludes that the development of an integrated casino-resort in the Greater Toronto Area (GTA) would likely help surrounding businesses and stimulate the GTA's economy.

The proposed the integrated resort - similar to Las Vegas's model - would include a hotel, convention and retail space, restaurants, and entertainment amenities.

UNLV researchers Kahlil S. Philander and Bo Bernhard contend that existing research suggests that the tourism, entertainment, lodging, and food and beverage industries could benefit from a casino that includes non-gaming amenities. While the GTA has several forms of gaming, including lotteries, horse racing, bingo, and multi-game sports wagering, integrated resorts are currently located well outside of Toronto.

Philander and Bernhard cite peer-reviewed research on the effects of "cannibalization," a term used to describe the impact of casino-style gaming on surrounding regional businesses. They conclude that there is no strong evidence to suggest a GTA resort-casino will adversely affect nearby businesses, nor would it greatly affect lottery revenues.

"There is minimal downside risk to other industries from the expansion of casino gaming in the GTA," wrote Philander and Bernhard in the report. "It is striking that while a "cannibalization" claim is often made with respect to casino gaming, we could not find strong empirical evidence to support this argument."

A review of economic research on casino gaming's impact on other gaming and non-gaming industries in the U.S. shows that casino competition can be healthy, leading to employment and business growth for the region.

Among the findings:

  • A casino-resort will bring in business and leisure travelers from outside of the GTA.
  • There may be a slight reduction of lottery ticket purchases, but losses will likely be countered by a net increase in public tax revenue from the development of the resort.
  • While the Ontario Lottery and Gaming Corporation (OLG) does not yet offer online gaming, the presence of a casino-resort will not significantly affect the future of online gaming in the Greater Toronto Area.

"Informing the Public Debate: Cannibalization-The Effect of New Casinos on Gaming and Non-Gaming Businesses," was supported by a grant from the Canadian Gaming Association. The paper is the first in a series that will examine the potential development of a casino resort in the Greater Toronto Area.

Visit UNLV's International Gaming Institute for more information.