A trade based view on casino taxation: Market conditions

Guoqiang Li*, Xinhua Gu, Jie Wu

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

6 Citations (Scopus)


This article presents a trade based theory of casino taxation along with empirical evidence found from Macao as a typical tourism resort. We prove that there is a unique optimum gaming tax in a particular market for casino gambling, argue that any change in this tax is engendered by external demand shifts, and suggest that the economic rent from gambling legalization should be shared through such optimal tax between the public and private sectors. Our work also studies the tradeoff between economic benefits and social costs arising from casino tourism, and provides some policy recommendations for the sustainable development of gaming-led economies. The theoretical arguments in this article turn out to be consistent with empirical observations on Macao realities over the recent decade.

Original languageEnglish
Article numberA001
Pages (from-to)585-606
Number of pages22
JournalJournal of Gambling Studies
Issue number2
Early online date25 Aug 2013
Publication statusPublished - 30 Jun 2015

Bibliographical note

We acknowledge the financial support by the University of Macau’s Research Grants Committee (under MYRG081<Y2-L2>-FBA11-GXH), the useful comments by an anonymous referee, and the excellent research assistance by Ms Sara Xiao Chang.


  • Market conditions
  • Optimum gaming tax
  • Social costs
  • Trade equilibrium framework


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