ORONO – It is hard for me to walk down the street without someone saying to me, “Hey Todd, I heard someone talking about you on the radio,” or “I saw your name in the newspaper.”

Some people in the state have taken a great interest in my recent study on the economic contribution of the proposed Oxford County resort casino.

More specifically, the extent to which the proposed casino might bring “new money” into Maine has become a hot topic — that is, a hot topic by the usual standards of an academic research report.

In my report, I explain that it is not possible for me — or anyone, for that matter — to determine exactly how much of the potential revenue generated by the proposed Oxford casino would not have otherwise been spent in Maine.

The only way to get at this question would be to build the casino and then ask the people who visit it.

Previous academic research on the topic varies widely. Some studies find that upwards of 80 percent of the revenue generated by a casino is “new” to the region.

Advertisement

Other studies, however, find that most of the money (also close to 80 percent) spent at a casino is at the expense of other businesses.

With respect to the proposed Oxford casino, the issue of new money really depends on how we define the region of interest.

From the narrow perspective of Oxford and its immediate surroundings, a large share of the potential gaming revenue — and associated jobs — would likely be considered new money.

This is because the Oxford area has a small population and, thus, most of the visitors to the proposed resort casino would come from outside.

In other words, from the perspective of Oxford, a casino visitor from Portland would likely bring new money into the area.

However, from a broader viewpoint of Maine as a whole, a much smaller share of the potential gaming revenue — and associated jobs — would likely be considered new money.

Advertisement

This is because, although the proposed casino might shift economic activity into western Maine, many of the visitors are likely to come from elsewhere in the state.

Put another way, a casino visitor from Portland might not bring new money into the area — again, thinking about the state as a whole.

That is, of course, unless the casino visitor from Portland would have otherwise spent the money watching the Red Sox play at Fenway, or visiting Las Vegas for the weekend.

So the most that anyone can say about the issue of new money is that the impact of a casino — in terms of potential gaming revenue and jobs — is greater at a small regional scale (say, the town of Oxford) and that it decreases as the region of interest (for example, the entire state) grows.

It is also likely that the money spent to build the proposed casino, if it is approved, can be thought of as new economic activity to the state.

This is because it is unlikely that the developers have another plan in mind to spend millions of dollars in Maine if they do not build the proposed casino.

I encourage people to check out my peer-reviewed study at the School of Economics website, www.umaine.edu/soe.

Then, when you see me walking down the street, you can say, “Hey Todd, I read your report and I was wondering .”

 


Only subscribers are eligible to post comments. Please subscribe or login first for digital access. Here’s why.

Use the form below to reset your password. When you've submitted your account email, we will send an email with a reset code.

filed under: