Diminishing Or Negating The Multiplier Effect: The Transfer of Consumer Dollars to Legalized Gambling: Should A Negative Socio-Economic “Crime Multiplier” be Included in Gambling Cost/Benefit Analyses?

This analysis reviews whether the logical extension of the socio-economic costs caused by pathological gambling should include a negative socio-economic (i.e., "crime") multiplier in gambling cost/benefit analyses. ... B. Legalized Gambling as Diminishing or Negating the Multiplier Effect of "Consumer Dollars" While the spending of consumer dollars in an economy constitutes a positive economic multiplier effect (usually between "2" and "3" in most scenarios), during the 1990s academics postulated that the multiplier effect was less when those same consumer dollars were spent in decriminalized gambling activities--thus, constituting a net drain on an economy. In 1991, academics even theorized that legalized gambling activities, such as casino activities, might constitute a negative economic "multiplier effect. ... In 1996 Professor William Thompson and economist Ricardo Gazel utilized RIMS in their report, The Monetary Impacts of Riverboat Casino Gambling in Illinois. ... The Thompson and Gazel report prodded a follow-up 1998 report financed by the Illinois Gaming Board, The Impact of Riverboat Casino Gambling on the Illinois Economy, 1991-1995 (REAL 1998 Report). ... Except for not addressing the socio-economic costs, the REAL 1998 Report revealed that "each dollar expended by the casino operations generated an additional $ 0.72 worth of activity elsewhere in the state's economy" (that is, a dollar multiplier effect of "1.72").