Simulating the impacts of gambling in a tourist location: Some evidence from Israel

Gambling and tourism are often perceived as complementary activities. This article examines this relationship both conceptually and empirically. While land-based casino gambling is not a legalized activity at present in Israel, the economic impacts of introducing a casino at Israel's premier vacation resort, Eilat, are simulated. This ex ante evaluation shows that much of the output, income, and employment gains generated by a casino are likely to be captured outside the region and that localized impacts are small. The displacement of existing local economic activity is examined, and the case of increased tourism expenditures generated by the casino is simulated. The public policy implications of these findings point to the necessity of developing activities that complement tourism at the local level, not just at the national level. The gambling-tourism relationship simulated for Eliat shows that national and local interests are not always synonymous.