The recession that began in late 2007 wrought havoc with gambling revenues in several major U.S. commercial casino markets

Figure 1


Despite the downturn, the number of Americans who visited casinos in 2008 did not fall off significantly from previous years. According to public opinion surveys conducted by VP Communications and Peter D. Hart and cited in the American Gaming Association’s “State of the States 2009” report, consumers cut back on their gambling at about the same rate as they did other forms of entertainment, such as restaurants and weekend travel. There were about 54.6 million U.S. casino visitors in 2008, equivalent to about 25 percent of the adult population and roughly unchanged over the last five years. The same research found that at that level of participation casinos ranked second only to lotteries (46 percent) as the most popular from of gambling among Americans. Poker was third at 11 percent, with participation dipping to its lowest level since 2002. Race betting was fourth at 6 percent, followed by Internet gambling at about 2 percent. The research also shows that slot machines were again the overwhelming game of choice among casino patrons, preferred by 62 percent of respondents. Blackjack was second with 21 percent, poker third with 7 percent, followed by craps and roulette with 3 percent each.


Gambling at commercial casinos declined in 2008 for the first time in 10 years, according to statistics compiled by the regulatory agencies of the l2 states where they are legal. (Figure 1) Not counting racetrack casinos, Americans gambled $32.54 billion in 2008, a decrease of 4.7 percent from 2007.

Figure 2


Nevada was particularly hard hit by the travel slump and by widespread losses in the home mortgage market, and gambling revenues reacted, falling by 9.7 percent (Figure 2). Cutbacks in consumer spending took a bite out of Atlantic City’s revenues as well. Aggravating factors there included increases in regional competition, principally in eastern Pennsylvania, and a partial smoking ban. Smoking bans introduced in 2008 played a significant role in the large percentage decreases experienced in Colorado and Illinois. However, seven of the 12 commercial casino states actually enjoyed increases in gambling revenues in 2008.


Racino revenues enjoyed their best year ever in 2008, jumping 17.2 percent to $6.19 billion. The opening of new facilities in Pennsylvania and Indiana played a large part in the increase. Not counting Indiana, which introduced racetrack casinos in 2008, nine of the existing 11 racino states saw increases year over year.