Report: Most casino revenue in Massachusetts comes from problem gamblers

A ten-year study on the impact of legalizing casinos in Massachusetts shows that – while gambling has led to hundreds of millions of dollars in revenues for the state, almost all of that spending comes from people with gambling problems.

About 10% of Massachusetts residents are considered problem or at risk gamblers and that number has not changed since the state legalized casinos in 2011.

However, the state-sponsored study – led by UMass Amherst researchers – found that 90% of all casino revenue comes from those problem gamblers. That’s up from 74% when the study began ten years ago.

Study authors say regulators should be concerned.

“There needs to be a reduction of the industry’s financial reliance on at-risk and problem gamblers as the 90% of revenue from this 9.9% of the population is much too high,” the authors wrote.

They suggested regulators take action to reduce problems, such as offering alerts to gamblers who engage in risky behavior, enacting mandatory spending limits, and restricting ATM withdrawals.

The report also says there have been some economic upsides to casinos, including an overall increase in economic activity, especially around construction of the Encore Boston casino in eastern Massachusetts. That said, recreational spending at casinos has led to less spending on other industries in those cities, like restaurants and bars. Moreover, the vast majority of casino workers quit other full time jobs when they started working at the casino, and fewer than 40% of casino workers earn a living wage for their county.

The authors stress that the positive findings in the report should not be applied to sports betting or online gambling, which was legalized more recently, “as the economic benefits of these formats appear to be much smaller and the risk of social harm is likely much greater due to lack of prior exposure.”

They recommend a separate study of sports betting alone.