This paper presents an empirical estimation of crossborder competition in the casino gambling sector. Informed by the 'prisoners dilemma' hypothesis, the paper proceeds to examine various competitive situations likely to arise with the introduction of casino gambling at two tourist locations on opposite sides of the Israeli-Egyptian border. Numerical estimations of the outcomes of three different situations are presented and the impact analysis method is described. The results point to small positive impacts and the volatility of this form of tourism development. The implications of the results point to the limited role of casino gambling in tourism development and the weighty monetary impact of social costs.