Local Economy·Point of View

Experts divided over economic impact of a Hamilton casino

Experts are split on the issue of whether a downtown casino would harm or benefit Hamilton's economy in the long run.
A casino could help Hamilton in areas such as tourism, but could also have a negative social impact, experts say. (istock)

Experts are split on the issue of whether a downtown casino would harm or benefit Hamilton's economy in the long run.

"My personal opinion as an economist is that while you will see increased revenues [from a casino], the government will benefit the most," says Hannah Holmes, an associate professor of economics at McMaster university.

While some businesses would benefit from a downtown casino, Holmes says it could have a negative impact on the larger Hamilton economy. She said that many people who visit casinos are from a lower income bracket, and they wind up spending their disposable income there instead of at local businesses.

"The casino can cause the redistribution of leisure money," she said. "They go to the casino instead of somewhere else."

But an expert from the University of Nevada, Las Vegas, who has studied gaming says there’s little evidence to support this theory.

"There really isn’t a cannibalism effect on local businesses," says Kahlil Philander, a Researcher at the International Gaming Institute at the UNLV.

Philander is the co-author of a study, funded by a grant from the Canadian Gaming Association – a not-for-profit organization that refers to itself as "a strong national voice for the industry" - that looks at the possible risks and benefits of a casino opening in the GTA.

He says that there is little evidence supporting the perception that adding a casino to a city’s economy will pull revenue away from local businesses.

"There may even be a positive effect on local businesses," he says. "The greater a casino can draw people, the better businesses can do."

Holmes says she’s not sure how big a tourist draw a casino would be in Hamilton because of its proximity to other gaming sites.

"With a casino there’s an increase in tourism," she said.  "Maybe not so much with Hamilton, because of [the casino in] Niagara Falls."

Holmes says there are likely to be positives for the city, such as the creation of new jobs and infrastructure to support the casino, but adds that some will lessen with time.

"I think there will be a big bang when the casino opens," she says. "There will be a honeymoon period."

A New Hamilton?

Holmes says she thinks the only way for a casino to be successful in Hamilton would be for the city to become more of a gambling destination.

"Hamilton is not known as a tourist destination," she said.  "I think people still have a perception of Hamilton as what they see driving over the Skyway, of something that’s largely manufacturing."

She says she thinks that building a casino, along with the construction of the new Ticats stadium, could mark the beginning of a major shift towards making Hamilton a tourist destination.

"I could see Hamilton changing in the next couple of decades."