An Economic Comparison of Gambling behavior in Atlantic City and Las Vegas

Abstract

Using data from a recent survey that we commissioned, this article investigates (for the first time in the public domain) the demography and tax incidence implications of casino gambling in Atlantic City, and does so in conjunction with a comparison to Las Vegas. The results indicate that the two gambling environments are very different in terms of the characteristics of those who gamble, and as a result, the tax incidence implications. Speccfically, Atlantic City appears to primarily attract two distinct groups of gamblers, those who are older and wealthier and who gamble extensively, and those who are older and poorer, who gamble very little. As a result, the tax inherent in casino gaming in Atlantic City is only slightly regressive. This differs markedly from the results for Las Vegas, which imply that Las Vegas gamblers are primarily vacationers who gamble voraciously with less regard for income and thus pay a very regressive tax.