Casino gambling can boost rural counties, fed analysts.

A RECENT ANALYSIS OF CASIno gambling's economic impact in the Federal Reserve Bank of St. Louis district, which includes Arkansas, suggests that rural counties could gain in household and payroll employment by allowing casinos.

But the study by economist Thomas A. Garrett that appears in the January/February issue of Review also said the origin and skill level of the work force could have a major influence on a casino's economic impact.

Two of the six counties studied in the analysis are Tunica and Warren counties in Mississippi, the counties that include Tunica and Vicksburg.

Whether or not there will be another attempt to legalize casino-type wagering in Arkansas during the next election remains up in the air.

Barry Emigh of Hot Springs, a former candidate for governor, has been working to get a voter-initiated constitutional amendment on the November ballot that would allow gambling, including card games and slot machines, in bars, hotels or other businesses that serve mixed drinks. Although the ballot title and name have been approved by Attorney General Mike Beebe, so far it hasn't gone anywhere.

Emigh's proposal also would legalize bingo, raffles and a state-operated lottery as well as allow gambling at any establishment where mix drinks are sold.

Emigh must collect the signatures of 80,570 registered voters to get the proposed amendment on the ballot.

Arkansas has had some type of gambling proposal on the ballot in just about every recent election, only to see them tossed out by the state Supreme Court or rejected by the voters.

Still, with huge money problems looming because of mandated educational reforms, legislators and residents might give gambling another look as a way to raise the needed funding.

In his conclusions, however, Garrett noted that states with casinos were facing budget crises similar to those states without casinos.

Before the late 1980s, Garrett wrote in his analysis, casinos were legal only in Nevada and Atlantic City, N.J. Today, casino gaming is available in 29 states. Annual ganting reventle has grown from $9 billion in 1991 to more than $40 billion in 2001, according to the Review article.

Tribal gaming is available on Indian reservations in 2,5 states and generates nearly $13 billion in annual revenue. Corporate casino gaming is available in 10 states and generated more than $27 billion in revenue in 2001.

Corporate casino gaming is seen as a more appropriate tool for fostering general economic development through increased employment and tax revenue, Garrett wrote, because states have no power to tax Indian casino revenue.

The greatest perceived benefits of corporate casino gambling are employment growth, greater tax revenue to state and local governments, and growth in local retail sales, Garrett said.

Local officials and casino proponents often claim that casinos increase local employment simply because they create additional jobs within the local area. "The question to ask," Garrett said, "is not only whether casinos decrease unemployment, but also for whom they decrease unemployment."

If a casino is planning to move to a rural area that has a relatively low skilled work force, Garrett wrote, the casino probably will draw skilled labor from outside of the area. If this labor remains outside of the local area and workers commute to the casinos, then unemployment in the local area will remain unchanged.

"On the other hand, if some of this skilled labor decides to move near the casino, then the unemployment rate in the local area will fall because the labor force has increased," he said.

In a relatively urban area, there is probably enough variety in the work force to ensure that skilled labor will be provided locally. In rural areas, however, most labor may be from outside of the area, thus leaving unemployment for the original population unchanged.

While casino employment is used as an indicator of economic development, Garrett said true economic development occurs only when there is increased value to society.

"The introduction of casino gaming may cause local businesses to close, which will result in layoffs," he said. "So, the net increase in employment in the local area may thus be less than the number of new casino jobs."

However, casino gaming may increase total employment when casinos indirectly generate non-casino jobs in the local area as a result of increased demand for non-casino goods and services. Casino employees who were previously unemployed or who recently moved into the area now generate income, and this income will be spent on goods and services such as housing and entertainment.

There was a dramatic jump in employment in Warren County, Miss., in 1993 and 1994, the two years in which casinos began operations. Since that time, employment growth has been relatively flat. Employment in Tunica County however has grown steadily since the first casino was introduced in late 1992, reflecting the steady increase in the number of casinos in Tunica County throughout the middle and late 1990s.

"While the evidence suggests that rural counties that adopt casino gaming as a major industry are likely to see large employment gains, this does not suggest that every county can become like Tunica," Garrett said.

Garrett was a co-author; with late University of Central Arkansas professor Marvin E. Dodson III, of a 2002 study of savings that could be achieved through widespread consolidation of public school districts in Arkansas.