Legal Gambling and Crime: Evidence from EGMs in Alberta

Empirical evidence about the relationship between legal gambling and crime is mixed; some studies find that legalized gambling increases crime and others find no relationship between legalized gambling and crime once other factors are controlled for. We exploit variation in the location and number of electronic gaming machines (EGMs) in the province of Alberta over the past fifteen years to examine the relationship between legalized gambling and crime in communities. Our crime data come from the Uniform Crime Reporting Survey (UCR), a survey designed to measure the incidence of crime in Canadian communities and the characteristics of crimes committees. The UCR contains detailed data on the number of criminal incidents for various types of crime annually for Canadian communities over the period 1977-2008. In 1992, Alberta legalized EGMs in bars and taverns in communities throughout the province. In 1997, plebiscites were held in five communities and EGMs were removed from removed from two as a result of these votes; in 1998 plebiscites were held in 36 communities and removed from six. We exploit these changes in the number of EGMs in communities over time to investigate the relationship between crime and legalized gambling, using a differences-in-differences econometric approach.