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Working Paper

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Legalized gambling is being promoted as the economic development tool of the 1990's. All across America, communities are embracing an industry once relegated to the back rooms of seedy establishments run by shady characters of questionable moral standing. This new-found respect for gambling comes as a result of promised economic benefits and financial rewards that gambling can bestow upon communities, especially those that are economically distressed. Communities in need of an economic shot in the arm see gambling as a key industry that can solve a significant part of their economic ills. Other reasons that communities seek "quick-fix" economic solutions rather than long term economic development alternatives are related to the nature of our political system and the plight of central cities. Because local and state politicians are elected for only a short time, they believe they must show "significant progress" if they are to get reelected. In addition, many run on a platform of "no new taxes." These perspectives, plus the erosion of the local tax base due to the decline of the middle class in central cities, have caused elected officials to think in more desperate ways to solve their economic problems.