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Best of Howard Stutz

Gaming Guru

Howard Stutz
 

New AGA study looks at economic impact of gaming

13 February 2012

LAS VEGAS, Nevada -- Don't view the American Gaming Association's latest national economic impact study as just another "casinos are good for your community" report.

The comprehensive analysis is actually Frank Fahrenkopf Jr.'s newest weapon.

The report, "Beyond the Casino Floor: Economic Impacts of the Commercial Casino Industry," delved into what gaming means directly to states and cities where casinos exist.

But the study also took the economic pulse of markets that don't have casinos.

Indirectly, authors of the report found that even towns without a casino can still derive some sort of economic benefit from the gaming industry.

"This is the one piece of information we never really had before," said Fahrenkopf, who has overseen the Washington D.C.-based lobbying organization since its inception. "This study gives us a total picture as to where we are as an industry."

The American Gaming Association last commissioned an economic impact study 15 years ago. Clearly, times had changed. Fahrenkopf convinced the group's board of directors that an updated report was needed.

The Brattle Group of Washington D.C., which had never before worked for the casino industry, was brought in to handle the study.

When all the chips were counted, the report showed 566 casinos in 22 states supported some $125 billion in spending and 820,000 U.S. jobs in 2010. To put the numbers into perspective, the commercial casino industry is equals nearly 1 percent of the $14.5 trillion U.S. gross domestic product.

Commercial casinos directly generated $49.7 billion in consumer spending and about 350,000 jobs, with salaries and benefits totaling nearly $15 billion in 2010.

But what Fahrenkopf focused on were the figures that came out of markets that aren't in the 22 gaming states. When indirect and induced impacts are factored, gaming supports an additional $76 billion in spending with suppliers and other businesses, and more than 470,000 additional jobs.

"The figure kind of stunned us," Fahrenkopf said.

So how does Fahrenkopf use the study for political advantage?

An interactive map on the American Gaming Association's website provides Fahrenkopf the educational weapon. Gaming's top lobbyist can now walk into the office of any member of Congress, display the representative's district and show how gaming benefits constituents there.

For example, the district may not have a casino but the local furniture maker sells chairs used in the Bellagio's poker room -- local jobs that are gaming's indirect benefit.

Taxes paid by the gaming industry in 2010 totaled almost $16 billion. When taxes from the businesses that have an indirect relationship with gaming, the figure jumped to $25 billion.

Much of Fahrenkopf's job involves educating members of Congress about the gaming industry. He said he wished he had the study in hand as he met 60 of the 65 freshmen members of Congress over the past year. He'll have it handy in 2013, when new representatives arrive in Washington.

On Capitol Hill, the American Gaming Association -- at least its membership minus Las Vegas Sands -- is focused on passage of Internet poker legislation. The prospects, however, appear highly unlikely that online poker will be legalized anytime soon.

Fahrenkopf, meanwhile, continues to monitor any hints about federal taxation of gaming, but there's no need to panic. Fahrenkopf said there's nothing on his radar.

However, Fahrenkopf is experienced enough to know that he needs to be on guard for "any unfair and unjust taxation legislation" from a federal government starved for revenue.

In reality, with the presidential election looming, he doesn't see any kind of action taking place.

"In 30 years, I've never seen such acrimony between the parties," Fahrenkopf said. "Not a hell of a lot is going to get accomplished this year."

But just in case, the American Gaming Association has that new weapon at the ready.
New AGA study looks at economic impact of gaming is republished from iGamingSuppliers.com.