Common sense suggests that living close to a casino will drive down your property values. The tentative conclusions made by the National Association of Realtors Research arm in “Economic Impact of Casinos on Home Prices Literature Survey and Issue Analysis” strongly confirm that assumption. The paper analyzed information from across the nation, but was done with a focus on the proposed downtown casino in Springfield, Massachusetts. In addition to looking at the effects on residential realty prices, the Survey presents numerous other factors that could cause negative or positive externalities for a specific casino.
As for home prices, the Survey concludes that “The impact on home values appears to be unambiguously negative. ” It continues [at 2-3]:
“We estimate that assessed home values will most likely be negatively impacted by $64 to $128 million from the introduction of a casino into Springfield, although there are many variables that could shift the price impact to be either more or less severe. In addition, pathological gambling could result in social costs of $8.4 million per year, possibly significantly higher. Additional foreclosures could produce costs of $5 million per year. Finally, there would probably be a negative impact on local retail businesses as local consumer expenditures were diverted to some degree to casino gaming, and a need for additional government expenditures to provide needed public services (police, fire, medical, etc.).”
Another factor emphasized in the Survey is distances between casinos. “Casinos that are close to each other tend to split the available business, reducing profitability.” Thus, “In the case of Springfield Massachusetts a significant level of sustained patronage as a destination casino appears unlikely given the saturation of gaming venues in the New England and New York region.”
A casino in Schenectady would, of course, also face the saturation problem, and would be in direct competition with one located in downtown Springfield, which is about 100 miles away.