Casino Revenues and Retail Property Values:
The Detroit Case
Jonathan A. Wiley
Douglas M. Walker
Published online: 12 March 2009
Springer Science + Business Media, LLC 2009
Abstract We analyze the effects of commercial casinos on retail property values in
the Detroit urban area. Accounting for property characteristics and proximity to the
casinos, casinos are found to have a significantly positive influence on retail property
values. The effect is stronger within a 5-mile radius of the casinos, suggesting that
casinos have a complementary, rather than substitution, effect on other businesses.
This provides some of the first micro-level empirical evidence to support the “drawing
power” of casinos and the impact of consumer spending on surrounding businesses.
The model developed and tested in this study can be applied to other casino
jurisdictions to gain further evidence on the impact of commercial casinos.
Commercial casino gambling is now legal in 12 states, and tribal casinos are located
in 29 states. Although the spread of casinos in the U.S. was fastest during the early
1990s, one sees renewed interest by states to find alternative sources of revenues and
mechanisms to stimulate economic growth. In 2007, Pennsylvania was the most
recent state to adopt casinos. Kansas is currently working on a regulatory framework
for casinos, and although Massachusetts and Kentucky legislators rejected casino
proposals in the spring of 2008, the issue will likely be revisited in the near future.
Commercial casinos are usually a policy response to state fiscal stress. Indeed, as
state budgets continue to tighten during the current recession, legislators inevitably
consider legalizing casinos as a means to raise additional tax revenues. A recent
J Real Estate Finan Econ (2011) 42:99–114
Walker acknowledges financial support for this project from the Carter Real Estate Center at the College
of Charleston. Opinions in this paper do not necessarily represent the opinion of the CREC.
J. A. Wiley (*)
Clemson University, 165 Sirrine Hall, Clemson, SC 29634, USA
D. M. Walker
College of Charleston, 5 Liberty Street, 4th Floor, Charleston, SC 29401, USA