An economic analysis of the effects of VGTs in Illinois.

Access to gambling of many forms has been growing in the United States. Specifically, in 2009, Illinois legalized the operation of Video Gambling Terminals (VGTs), commonly referred to as slot machines, in any liquor-pouring establishments in the state. I use a unique dataset that measures a university's access to gambling using distance to the nearest VGT combined with publicly available data on university class demographics. This paper takes advantage of variation in municipality's opt-in date to examine the causal effect of access to VGTs on graduation rates in post­secondary education. I find evidence that 2-Year colleges in poorer areas experience a decline in graduation rates when there are VGTs nearby.