The Economic Effects of Harrah's Cherokee Casino and Hotel on the Regional Economy of Western North Carolina
2007; Volume: 8; Issue: 2 Linguagem: Inglês
ISSN
1533-3604
Autores Tópico(s)Housing Market and Economics
ResumoABSTRACT The Eastern Band of Cherokee Indians opened their casino in 1995, and entered into a management agreement with Harrah's in 1997 to manage the casino operation. This paper explores the major components of spending and their impact on a seven county region in Western North Carolina. The payment streams include wages and salaries paid to Harrah's Cherokee Casino and Hotel employees, operational spending paid to businesses who supply the Harrah's Cherokee and Hotel with food, beverages, and services, revenue distribution for Tribal government services, revenue distribution to adult Tribal members from the per-capita account, and distributions from the minors-account to Tribal members who have recently come of age. We deviate from existing research in two ways: First, we use existing commuting patterns to define the relevant region. Second, we estimate the economic impact of payments to minors when they reach majority age. The transference of this to current disposable income is significant. This wealth effect, which has not been appropriately incorporated in any economic impact studies of the gaming industry, is included in our research. INTRODUCTION On October 17, 1988, Congress passed the Indian Gaming Regulatory Act (IGRA), 25 U.S.C. [section] 2710, for the purpose of establishing and regulating Indian gaming on Native American Reservations (See Federal Register, 2001). IGRA classifies gaming into three separate categories: Class I gaming is defined as traditional Indian gaming that is part and parcel of tribal ceremonies and celebrations. Class II gaming covers several types of gambling including lotto, pull-tabs, bingo and some types of card games. Class III gaming includes black jack, slot machines and all other types of gaming that are not included in either Class I or Class II. Since the passage of IGRA, twenty-three states have approved Class III gaming, five states have adopted Class II gaming and two states offer Class I gaming (Meister, 2002). Of the 562 federally recognized Indian Tribes in the U.S., 224 offer Class II or Class III gaming (National Indian Gaming Resource Library, 2004). Several researchers have attempted to estimate the economic effects of Indian gaming, as well as private sector commercial casinos, on the regional economies in which they are located. For example, it has been estimated that estimated that Missouri casinos created more than 12,000 new jobs in that State (Leven & Phares, 1997). A comprehensive analysis of the economic impact of Indian gaming in Arizona was published (Cornell & Taylor, 2001). The economic impact on the surrounding community of a newly established commercial casino in Omaha, Nebraska has been estimated (Goss, 2002). A similar analysis was employed in calculating the economic impact of the tribal gaming of the Kalispel Tribe on the regional economy of Eastern Washington (Peterson & Taylor, 2002). Finally, it was found that Native American casinos in Colorado were responsible for the creation of more than 6,000 new jobs (Center for Business and Economic Forecasting, 2004). These studies relied on an input-output approach within the context of a general equilibrium framework. The IMPLAN (Impact Planning) model developed by the Forest Service of the US Department of Agriculture and the Regional Economic Models (REMI) developed by Regional Economic Models, Inc. are the two most commonly used models of this type. Two researchers (Rickman & Schwer, 1993) have systematically compared the REMI and IMPLAN models and have found IMPLAN to produce reliable multiplier estimates. Moreover, while both models are dependable, it has been found that the estimated multiplier effects from IMPLAN are on the whole more reliable than those generated by REMI (Crihfield & Campbell, 1991). Consequently, the IMPLAN model was employed in this analysis. The purpose of this paper is to estimate the economic impact of Harrah's Cherokee Casino and Hotel on the seven counties of Western North Carolina that were identified by commuting patterns as being influenced by Casino activity. …
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