An Analysis of the Gaming Industry in Illinois
AdvisorNichols, Mark W.
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In 2012, Illinois passed legislation allowing Video Gaming Terminals (VGTs) outside of casinos. This legislation was passed in order to increase tax revenues from gambling in a market that had seen decreases in revenues and admissions over the past 8 years. Many mature gambling markets have also seen decreases in revenues and tax collections in recent years.It was expected that the revenues from VGTs and the number of VGT machines would have a negative impact on the existing casinos through different measures including: casino revenue, slot revenue, table revenue, slot machines, tables, and admissions. Using OLS and VAR models, it was found that casino slot revenues decrease by about 0.12% for each 1% increase in VGT revenues. Admissions decrease by about 12 people for each VGT machine added to the market. According to the Granger Causality test, the causation is running from VGTs to admissions.