Modeling operational efficiency in US casinos through data envelopment analysis

Purpose The purpose of this study is to assess the operational efficiency of commercial casinos across US states and examine the relationship between efficiency and broader economic productivity, particularly in relation to community well-being. Design/methodology/approach A quantitative approach using data envelopment analysis was adopted to assess state-level casino operations. The output-oriented Charnes, Cooper and Rhodes (CCR) and Banker, Charnes and Cooper (BCC) models were applied to secondary data from the American Gaming Association’s annual reports. Findings Of the 21 US states with legalized commercial casinos, 13 demonstrated operational efficiency. The analysis revealed that underperforming states could enhance their socioeconomic contributions by improving employment-related inputs, highlighting opportunities for more impactful resource allocation. Originality/value This research contributes to the benchmarking literature by applying data envelopment analysis to the casino industry, a sector that is frequently overlooked in performance analysis. This study offers a novel perspective on how operational efficiency in hospitality-based entertainment can inform regional productivity strategies and policy development.