by Marian Green
Tax rebate proposal could boost casino gaming revenues
If the $150 billion package proposed to stimulate the U.S. economy comes through, the casino industry could benefit significantly, according to a gaming analyst.
Deutsche Bank gaming analyst Bill Lerner said in a note to investors that the proposed stimulus package agreed to by the White House and the House of Representatives could result in a $750 million injection into casino gaming. The package, he noted, is a work-in-progress and subject to change as it goes before the Senate.
As currently proposed, the package would be composed of roughly $100 billion in tax rebates to 117 million taxpayers, with another $50 billion earmarked for businesses, Lerner indicated.
As of press time, the bill had the potential to be on President Bush’s desk by Feb. 15, with rebate checks going out between May and July.
Lerner’s note cites that, historically, roughly three quarters of 1 percent of consumers’ disposable income gets spent on casino gaming.
“With this in mind, we believe the same portion of expenditures could apply to the individuals sharing tax rebates of $100 billion,” meaning that some $750 million could be injected into casino gaming in the second and third quarters of the year, he said.
That, Lerner indicated, means the tax rebates could equate to an additional 1.3 percent of revenue growth in 2008, given that U.S. casino gaming is a $60 billion market.