CHAPTER SUMMARY. Government decisions regarding economic development issues matter to the well-being of all of us. Knowing how to evaluate economic development requires a comprehensive framework to compare benefits and costs that is theoretically grounded and established prior to any choice being made, with reliable data obtained to fill identified information gaps. Without a coherent evaluation process, these decisions tend to be made in response to whichever group applies the most pressure. Fortunately, input from well-informed, unbiased parties can counterbalance this tendency. Here, we examine why the procedures typically employed to evaluate casinos as a means of economic development suffer from two deficiencies: lack of a valid framework, and lack of complete and trustworthy information. These problems are not special to casinos; what we learn from them has relevance to the evaluation of other economic development questions.

Two episodes stand out as reasons for writing this book. The first occurred at the start of the 1990s. A newspaper announcement appeared stating that an offtrack betting (OTB) parlor was slated for Champaign, Illinois, where I live. Knowing that OTBs generally drew 90 percent of their clientele from nearby residents; that their profit rates were higher than other businesses (I later learned the figure was 19 percent, including racing-industry payments); and that owners would be out-of-city investors taking their profits out of town, I was surprised and intensely interested to read that supporters believed it would bring 125 jobs to town.