As I write this column, the Labor Day weekend is about to commence. For many, this will be the last fling of summer before the serious work of the fall begins—school for kids, the return of full-time work schedules for adults and final Global Gaming Expo (G2E) prep work for those of us involved in the casino industry.
Given these tasks, now may not be the best time to take a step back and examine the current state of the gaming industry, but that is just what I am going to do here. Blame the recent release of the American Gaming Association’s State of the States report, its annual survey of the commercial casino industry. The good news I suppose is that there is a lot of good news to report, a welcome change from recent years.
To start, the State of the States, written by the AGA and Gaming Compliance, reports that the American commercial casino industry enjoyed a record-setting year in 2017, with consumer spending on casino gaming surpassing $40 billion for the first time. The $40.28 billion in gaming revenue represented an increase of 3.4 percent over 2016’s figure, meaning that the commercial casino industry has now grown every year but one since the U.S. economy came out of recession in 2009.
The report also shows that all but four of the 24 commercial casino states saw year-over-year revenue increases in 2017, reflecting strong macroeconomic trends and sustained job growth in most parts of the country. Record annual revenue was reported in 11 gaming states: Colorado, Florida, Kansas, Maine, Maryland, Massachusetts, New York, Ohio, Oklahoma, Pennsylvania and Rhode Island.
In addition to increased revenues, the State of the States highlighted gaming’s other contributions to the economy as large, reporting that America’s 460 commercial casino locations generated some $9.23 billion in direct gaming tax revenue in 2017. The $9.23 billion tax revenue figure represents an increase of 3.1 percent over 2016. It does not represent tax revenue generated by activities other than direct gaming, including income, payroll, sales or various other corporate taxes. Nor does the total include payroll taxes paid by gaming operators. According to Oxford Economics, the U.S. commercial casino industry directly employed more than 361,000 employees in 2017, and those employees earned more than $17 billion in wages, benefits and tips that year.
The financial news is even brighter when tribal gaming performance statistics are considered. The report states that 500 tribal casinos with either Class II and/or Class III gaming were fully operational across 28 states—a number that’s expected to increase in 2018. According to the National Indian Gaming Commission (NIGC), tribal gaming revenues hit a record $32.4 billion in 2017, up 3.9 percent from the previous year. Tribal gaming was driven by the same underlying consumer trends that benefited commercial gaming.
The authors of the report are bullish on the immediate future of commercial gaming within the U.S., due in part to the Supreme Court ruling that cleared the way for expanded sport betting throughout the country, pending individual state approval and planned casino expansion in established gaming jurisdictions.
But State of the States also warns that land-based casino expansion is a double-edged sword, and that recent and soon-to-open facilities in Massachusetts, New Jersey, New York, Maryland and elsewhere may cannibalize business from existing operators as much as they contribute to bottom line growth.
I encourage you to visit www.americangaming.org and further peruse the State of the States 2018 report, which contains far more information than I outline here. It may well provide a needed respite in these hectic days.