The Impact of Casinos on Local Property Values
Casinos provide entertainment to many. Furthermore, they generate significant tax revenue for their home communities and create employment opportunities for locals.
However, casinos can have an adverse effect on the real estate market in their immediate vicinity. Therefore, it’s essential to comprehend what impact casinos will have before purchasing property in this area.
Casinos can provide local residents with jobs, which could improve their incomes and raise property values. However, there are a few factors to take into account when assessing whether casinos will increase or decrease property values in an area.
When considering where employment increases are coming from, one must consider whether those jobs are coming from within or outside the region. This depends on the skillset required for a casino’s operation and can vary depending on location.
Another factor is the amount of traffic a casino draws. If most customers are local, then this could have an advantageous effect on retail sales and state tax collections.
Conversely, if most of a casino’s customers come from out-of-state, then its effect on local retail sales could be negative. This phenomenon is known as the substitution effect; it occurs when local customers who would have otherwise stayed home instead of gambling visit the casino for other purposes instead.
Increased tax revenue
Casinos generate a substantial amount of tax revenue for their home cities and towns, providing local politicians with funds to fund essential community services or avoid budget cuts elsewhere. This is especially essential in struggling economies.
California cities such as Commerce, Bell Gardens, Colma, Hawaiian Gardens and Gardena depend on casinos for local tax revenue support and to provide employment opportunities to residents in the region. Casinos also play an integral role in keeping unemployment rates low and providing much-needed jobs.
State and local governments often tout the casino tax revenue as a boon for recipients, yet in reality it costs them money that could otherwise be put towards improving their economies. While it may temporarily increase local retail sales, this does not always offset the loss in property values. It is likely that short term local retail sales will decrease as more non-local residents take their leisure time at the casinos instead of back home.
Increased retail sales
Casinos bring with them increased retail sales, which in turn benefits the local economy. Attracting many vacationers and tourists means more patronage for local businesses.
Another advantage is the employment of locals, which helps reduce unemployment in a community. This is especially true for land-based casinos who typically hire table dealers, bartenders, wait staffs and security personnel from nearby areas.
However, if the first casino that opens up shop in an area does not maintain its amenities, property values could suffer. This could also be attributed to other nearby casinos drawing away business from the initial establishment.
Decreased property prices
Opening a casino can alter the perception of property prices in an area, either for good or ill. Residents have the power to decide whether this development is beneficial or detrimental for them.
According to a recent study conducted by the National Association of Realtors, casino gaming has an “unmistakably negative effect” on local property values.
By extension, they can reduce the value of properties in an area by anywhere from 2% to 10%. This is significant since real estate generally serves as a long-term investment.
However, the study also highlights that casinos may in some cases increase property value. This is especially true for rental properties which may attract tourists looking to gamble.
For those seeking to purchase property near a casino, this can be an attractive opportunity. However, it’s essential to remember that investing in real estate is always risky; one cannot predict exactly how the market will perform five years from now.