Local Opt-Out Provisions in a State Gambling Expansion: An Analysis of Pennsylvania Municipalities

Abstract

A 2017 gambling expansion bill in Pennsylvania included a provision that gave municipalities the option to ban a new casino from opening within their borders. This paper examined how different factors influenced local decisions on whether to allow casino gambling. Multilevel linear probability models indicated that municipalities were influenced by economic characteristics, as evidenced by a higher likelihood of allowing casinos in communities with lower levels of household income. Results also suggested that municipalities were influenced by variables related to tax competition and the percentage of residents who were black. The findings of this study identify factors that may influence municipal governments when given the authority to opt out of a state gambling expansion capable of generating a new source of local tax revenue.

Issue Introduction

“…In a similar vein, Yaskewich (2021) analyzes the gambling expansion bill passed in Pennsylvania in 2017 to determine the underlying factors influencing local jurisdictions' decisions about whether to allow casino gambling or ban new casinos from opening within their borders. Using multilevel linear probability models, the author finds that household income, tax competition, consumer preferences for gambling, and racial composition of residents are influential in municipalities' decisions to opt out of the state-granted opportunity to expand gambling as a means for diversifying local tax structures.…”