United States: Dollars In, Dollars Out: Does It Make "Cents" For Tennessee To Further Legalize Gambling In The State?

Uniquely situated in the mid-south, the state of Tennessee and its "three grand divisions," or regions, each have their own tourist attractions and destinations. East Tennessee has the Great Smoky Mountains along with attractions such as Dollywood in Pigeon Forge and the quaint town of Gatlinburg nestled in the heart of the mountains. Middle Tennessee has Nashville, known as Music City USA, with the Country Music Hall of Fame, The Grand Ole Opry, Ryman Auditorium, Music Row, and the famed honky-tonks on Broadway. West Tennessee and Memphis are home to the blues, barbeque, Beale Street, Elvis, and Graceland. While all of these attractions bring tourists and their dollars into the state, is Tennessee losing a stream of revenue from tourists and, in particular, Tennessee residents, who are leaving the state's borders in order to gamble in casinos? The answer to this question is a resounding "YES"!

While Tennessee has not yet legalized casino gambling, Tennesseans do have easy access to casino gambling. As mentioned, Tennessee is uniquely situated in the mid-south. In fact, eight different states (Kentucky, Virginia, North Carolina, Georgia, Alabama, Mississippi, Arkansas, and Missouri) share a border with Tennessee. Three of those states (North Carolina, Mississippi, and Missouri) already have legalized tribal or commercial gambling. According to the American Gaming Association's 2012 Edition of the State of the States: The AGA Survey of Casino Entertainment, Tunica (Mississippi) was the ninth largest casino market for the calendar year 2011.

Tunica is only about a half-hour drive from Memphis. On the other end of the state, residents and tourists to Knoxville and the Great Smoky Mountains can easily drive to Cherokee, North Carolina, in a little over an hour (about 75 miles from Knoxville) to enjoy casino gaming. For those in the northwest portion of Tennessee, they are not far from riverboat gambling in Caruthersville, Missouri, which is situated on the border of the two states. Lastly, middle Tennesseans are within a 2.5-hour drive to casinos in the states of Illinois (Metropolis) and Indiana (Evansville).

Expand the drive time for middle Tennesseans to 4.5 hours, and they can reach not only the before-mentioned casinos in Illinois and Indiana, but also Tunica (Mississippi), Cherokee (North Carolina), and the seventeenth largest casino market in 2011, Lawrenceburg, Indiana. Nevertheless, does easy access to gaming actually mean that Tennesseans are crossing the border to gamble?

Based solely upon the data reviewed from the Mississippi Gaming Commission for the Northern River region of Mississippi, which would include Tunica, the answer to this question also appears to be a resounding "YES"! According to the Mississippi Gaming Commission, between the first quarter of 2007 and the third quarter in 2012, there were only two quarters in which the percentage of Tennesseans patronizing the Northern River region casinos in Mississippi fell below 30%. The fourth quarter of 2007 saw 28.56% of patrons from Tennessee to the Northern River region casinos in Mississippi, whereas the second quarter of 2008 saw 29.76%. Perhaps even more remarkable is the fact that during the same time period, 2007-2012, at the same Northern River region casinos in Mississippi, the data demonstrates that Tennesseans outpaced patrons from every other state, including the host state of Mississippi, in every single quarter.

Certainly, these figures show that Tennesseans are consistently willing to cross state borders to find casino gaming. It should be noted that similar patterns were found in the years leading up to the state's legalization of a lottery in 2002, which began operating in 2004. Perhaps these same patterns will open the door to further legalization of gambling in Tennessee, because otherwise the state is simply watching dollars leave, dollars which could stay within its borders for education, health, roads, property, and other programs, similar to the use of casino revenues in other states. With two other bordering states, Kentucky and Arkansas, actively discussing legalizing casino gaming, the time to act by Tennessee may be sooner rather than later.

Mississippi Gaming Commission Data

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