Northwestern University Newsfeed

July 19, 2004

Like other communities across the nation, the city of Chicago has considered opening a casino in the city. Edwin S. Mills, professor of real estate and finance at Northwestern University, believes gambling casinos can have a positive economic impact on the community.

Mills: People come to a casino and they also buy meals offsite, they stay in hotels offsite, and other things. Now, some casinos are a better place for that than others. In Las Vegas, the benefits to the community are helped by the fact that they now have a very large, very fine convention center. If the casino is stuck out in the middle of nowhere, as some Indian casinos are, then of course these side benefits are quite minor.

Mills says city-owned casinos often suffer from inefficient operation.

Mills: Of course what happens is that the profits go to the city instead of to the shareholders. And these things are expensive to build. Practically no city government is known for building and operating business enterprises efficiently. It’s a big business and it’s a province of business, or at least it should be.

Mills says community support for casinos depends on how the question is asked.

Mills: You have to ask these questions carefully. So, “suppose it would earn X million dollars for the city, would you be willing to tolerate a casino?” That’s one way to ask. Another way is, “Do you like commercial gambling?”

Mills says government-run gambling is not a new idea.

Mills: The fact is that the state is into commercial gambling in a big way with the state lottery. And that’s had some benefits. It’s helped to run the numbers game into the ground. It’s little more than a piece of legalized extortion because the payout rate is only about 50% or two-thirds in most state-run lotteries.

Mills says casinos do attract some crime.

Mills: Any time you get large groups of people, there are criminals, whether they’re pickpockets, or prostitutes, or dope sellers, or whatever. But also it depends on policing. There’s no reason you couldn’t take some of the money the city would get from the casinos and step up the police force somewhat.