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Best of Liz Benston

Gaming Guru

Liz Benston

Report Shows Casinos' Strength

4 May 2005

Americans spent $28.9 billion last year in nontribal casinos across the United States, a 7 percent increase from 2003, according to an industry-funded study issued today.

Spending at commercial casinos has increased steadily over the years and has more than doubled in the past decade, from $13.8 billion in 1994, according to the American Gaming Association's annual "State of the States" report.

"The numbers are phenomenal," AGA President and Chief Executive Frank Fahrenkopf said. "We only do business in 11 states but we continue to grow in spite of a proliferation of Native American gaming."

The commercial casino industry "has become a major force in our nation's economy and a source of valuable jobs, tourism dollars and tax revenues for the communities where we operate," he said.

The study said some 54.1 million people -- about 26 percent of the American adult population -- visited casinos last year. Visitation rose about 1 percent from 2003.

Americans also went to casinos more frequently, making 319 million trips last year compared with 310 million trips the previous year. The average number of trips per year rose to 5.9 from 5.8 in 2003.

Commercial casinos generated $4.7 billion in taxes to state and local governments, up 10 percent from 2003. Increases were biggest in Iowa, Illinois, Michigan, Nevada and New Jersey. Casino wages grew 3 percent to $12 billion.

For the first time, the AGA polled public officials for their thoughts on casinos. The report polled 201 officials including mayors, county managers, city and county council members and state legislators. Officials in Nevada and New Jersey were excluded from the results because of those states' heavy dependence on gambling revenue.

More than half of public officials surveyed (58 percent) said the introduction of casinos exceeded their expectations while 31 percent said casinos met expectations. Another 9 percent said the effect of casinos was worse than they anticipated.

When asked if they could go back in time and vote again on the introduction of casinos to their communities, 75 percent of public officials said they would approve casinos the second time around. Another 19 percent said they would vote no and 6 percent were undecided.

Most public officials (82 percent) said casinos act responsibly and are "good corporate citizens" compared with 8 percent who disagreed. Sixty-three percent said casinos have helped other businesses in the community while 17 percent said they have hurt other businesses. Another 16 percent said they witnessed "some of both."

"The results overwhelmingly show the positive impact of the industry in our host communities, presenting the strongest rebuttal yet for the myths perpetuated by our opponents," Fahrenkopf said.

The poll will be used to help bolster the casino association's battle against "unrealistic (casino) tax rates" being set in some states, he said.

Of those surveyed, 83 percent said gambling is an acceptable pasttime for themselves and others. That figure has hovered around 80 percent for the past several years, the association said.

About one in five Americans (21 percent) said gambling has become more acceptable in the past five to 10 years, while 11 percent said it has become less acceptable. Another 66 percent said their views haven't changed.

Fahrenkopf said casinos, long viewed as a sinful industry, have been accepted by a majority of Americans for more than a decade. But the industry is still fighting a continuing public relations battle in the press, where editorial pages of major newspapers have boosted a "vocal minority" of opponents representing an estimated 15 percent of the population, he said.

More than half of American adults (53 percent) played the lottery in the past year while 35 percent said they gambled in a casino. Another 18 percent said they played poker in the past year, 6 percent said they bet on a race and 2 percent said they gambled online.

The survey reflects the nation's fascination with poker.

More than half of those polled (55 percent) said they have seen some form of television show on Las Vegas or poker.

More than 440 card rooms across California, Florida, Minnesota, Montana and Washington generated more than $1 billion in revenue last year, a 20 percent increase from 2003. In Nevada and New Jersey, grouped separately in the report, players bet $151.7 million in poker games, up 45 percent from the previous year.

Nearly one in five American adults (18 percent) played poker last year, a 50 percent increase over 2003. Of those who played poker last year, 19 percent said they started playing the game in the last year or two.

Some of the data collection for the report was commissioned by Harrah's Entertainment Inc., which intends to release its own survey of American gamblers this year.

The remainder of the polling was conducted for the AGA by Peter D. Hart Research Associates Inc. and the Luntz Research Companies. Hart is a Democratic pollster who has conducted research for the Wall Street Journal and Luntz is a Republican pollster who has conducted research for NBC. This marks the 10th year the American Gaming Association has commissioned research on casinos.