Estimating the Effect of the 2003 Gaming Tax Restructuring on Riverboat Gaming Volume

This paper analyzes the effect of the 2003 Illinois gaming tax increase on gaming demand. To model gaming demand, slot machine coin-in is chosen for the period January 2000 to December 2006. Multiple regression analysis is used to model both the tax increase and account for seasonality in the data. A Box Jenkins model was employed to address correlation of error terms. The findings reveal that Illinois experienced a decrease in gaming demand when the tax increases took effect. The findings indicate that legislators should acknowledge and evaluate the negative economic pressures tax increases have on the gaming industry. Adapted from the source document.