It's long been an article of faith with me that the seemingly perpetual growth in the number of state-sponsored gambling outlets is poor public policy. Common sense says that the amount of money people will spend on these games has a ceiling - one that we've almost certainly reached by now.
If that's correct, then further expansion of legalized gambling is a fool's errand, as the money generated by it won't increase meaningfully. Once gambling has reached a saturation point in a region, revenues will just get shifted from gaming company to gaming company and state to state and local government to local government.
But like all articles of faith, I had no proof for my hypothesis. So I decided to test it, and the Quad Cities market seemed like an excellent laboratory.
What is now the Isle of Capri casino in Bettendorf opened in April 1995 - making us a three-casino community. (I'll refer to the casinos by their present names throughout this article.) We now have almost two decades of gaming information with the three-casino marketplace, and a handful of variables allow us to see what happened here when this happened there: the December 2008 move of Jumer's from downtown Rock Island to Interstate 280; the recession that hit in 2007-8; new casino competitors in eastern Iowa in 2006 and 2007; and the 2012 introduction of video-gambling machines in Illinois outside of casinos.
What I found didn't exactly support my hypothesis of a Quad Cities gambling pie with a fixed size. Rather, the data suggest there are ways to add new customers to the local gambling market - but that the pie has nonetheless been shrinking for a decade.
