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This paper investigates relationships among casino revenue, crime rates, and the number of visitors in Las Vegas, Nevada. Numerous studies have attempted to assess the impact of casino activities on crime rates but have provided inconclusive results. Some studies have found that casino activities increase crime rates, while others find no significant relationship between casino gambling and crime rates. But all studies that have found casinos increase crime rates do not adjust the crime rate for the number of visitors to the area. The impact of casino activities on crime rates disappears, however, when crime rates are adjusted for visitors. This study revisits the question with consideration for the potential endogeneity among variables. This paper addresses endogeneity concerns by estimating the impact of casino activities on crime using a system of equations to represent casino activities, adjusted crime rates, and visitors. Three stage least squares is used to estimate the system. Results show that the impact of casino activities on crime rates persists even after crime rates are adjusted for the visitors. Efforts to reduce crime can be effective in boosting the Las Vegas regional economy. [ABSTRACT FROM AUTHOR]

On November 27, 2001, the Supreme Court ruled in Chickasaw v. United States that Native American gaming (NAG) firms are subject to federal excise and occupational taxes. Prior to the decision, these firms had been exempt from all federal taxation. We hypothesize that Chickasaw improves the competitive position of publicly traded gaming firms and their suppliers by leveling the playing field for publicly traded firms. Consistent with this argument, we find that the stock prices of publicly traded gaming firms and their suppliers reacted positively to the announcement of the Chickasaw Supreme Court and Tenth Circuit decisions. We also hypothesize that Nevada casinos are relatively insulated from competition because they offer a unique experience that is not easily replicated by NAG firms. Consistent with this argument, we find smaller stock price reactions for firms with Nevada operations. [ABSTRACT FROM AUTHOR]