Abstract
This paper studies the entry and tax regulation of oligopolistically competitive privately run casinos and government-run casinos in a jurisdiction. We highlight three important external effects from casino-style gambling: non-casino income creation, social disorder costs, and cross-border gambling. The laissez-faire equilibrium need not be overcrowding compared with regulated or government-run regimes. Entry regulation may lead to higher jurisdiction welfare than tax regulation. Government-run casinos always operate on a larger scale and achieve higher welfare than other regimes, given the same number of casinos. With an endogenous fraction of external gamblers, a dispersed casino configuration yields higher welfare than a centralized one.
| Original language | English |
|---|---|
| Pages (from-to) | 1058-1085 |
| Number of pages | 28 |
| Journal | Canadian Journal of Economics |
| Volume | 43 |
| Issue number | 3 |
| DOIs | |
| State | Published - Aug 2010 |