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Casino Gambling and Bankruptcy in New United States Casino Jurisdictions

NCJ Number
Journal of Socio-Economics Volume: 29 Issue: 3 Dated: 2000 Pages: 247-261
Date Published
15 pages

Using data on personal consumer bankruptcy for the fourth quarter of 1989 through the first quarter of 1998, this study examined the impact of casino gambling on per capita personal bankruptcy filings.


The findings show that casino gambling is linked to an increase in personal bankruptcy in seven of eight communities that recently adopted casino gambling compared to a set of matching control jurisdictions without casinos. In five of the seven jurisdictions, the increase in personal bankruptcies was significant. In one jurisdiction with casino gambling (Harrison County, MS), however, bankruptcy per capita significantly decreased. The authors speculate that this decrease is due to the features of both the community and the casino industry in Biloxi, MS. The most significant changes in bankruptcy filings occurred under Chapter 13 bankruptcy, rather than under Chapter 7, which suggests that an increasing proportion of those filing personal bankruptcy are creating repayment plans for their debts. Although the findings suggest a positive correlation between casino gambling and consumer bankruptcy, research on this issue is still in its infancy, so more research is needed before any firm conclusions can be drawn. The eight communities with casino gambling are Sioux City, IA; St. Joseph, St. Louis City, and St. Louis County, MO; Alton, Peoria, and East Peoria, IL; and Biloxi, MS. These communities have all had casino gambling for at least 4 years. County-level data on personal bankruptcy, including Chapter 7 and Chapter 13 filings, were obtained from SMR Research Corporation. The dataset used for this study is unique in that it is at the county level. This approach enabled researchers to obtain a clearer picture of how bankruptcy rates in counties change with the introduction of casino gambling. A review of the bankruptcy literature is also provided. 1 figure, 5 tables, and 26 references

Date Published: January 1, 2000