Two economists studied federal corruption conviction rates in states before and after they legalized casino gambling. The study focused on the years 1985 to 2000, a period when gambling interests flooded state capitols with money in a drive to legalize casinos.
They found corruption convictions increased after casinos were legalized. The study also showed that the corrupting influence of casinos began a year or two before lawmakers approved gambling. (See New York, where the first hint of corruption began two years ago. The impact casino money has also begun to impact Massachusetts, where gambling was recently legalized. Of course, Pennsylvania may have set the gold standard.)
Economists Douglas M. Walker and Peter T. Calcagno said the pattern supported two theories to explain the increase in corruption: the casino industry is attracted to states with an existing “culture of corruption.” The casino industry often exploits the regulatory atmosphere after gambling is legalized. In other words, the casino interests corrupt public officials before, during and after the legalization process.
Mississippi topped the list with almost four public corruption convictions a year per 10,000 state employees followed by Louisiana, Illinois and South Dakota. The five states with the lowest corruption rates did not legalize casinos during the same period.
The corrupting influence of casinos is not new, it has only increased in recent years. (See a list of anecdotal corruption incidents here.) But former Illinois Sen. Paul Simon pointed to the problem while testifying at a meeting in 1997 before the National Gambling Impact Study Commission when he said, gambling “has more of a history of corruption than any other industry.”