The really big picture for U.S. gaming
Two months ago, the American Gaming Association (AGA) released State of the States 2018, which reported that consumer spending on commercial casino gaming tallied $40.28 billion in 2017, a 3.4 percent increase of 2016 and record setting revenue return for the industry.State of the States 2018also showed that tribal gaming revenues hit a record $32.4 billion in 2017, up 3.9 percent from the previous year; which means the operator side of the gaming industry generated roughly $73 billion in gross revenue last year.
That combined revenue total seems quite impressive, no? Actually, it is just a drop in the bucket compared to total economic impact the gaming industry has on the U.S. economy, according to the Economic Impact of the U.S. Gaming Industry, a study from the AGA and Oxford Economics that landed a few weeks prior to G2E. To begin, the Economic Impacttabs gaming industry direct spending—a stat that combines casino revenue, gaming manufacturer revenue and ancillary spending by casino patrons both on-and off-site during visits—at an astounding $109 billion. The breakdown, according to the study:
- Gaming industry direct spending includes $89.4 billion in spending at casinos, $13.3 billion of ancillary spending by patrons and $6.3 billion of purchases from gaming manufacturers;
- The $89.4 billion in casino revenue included $55.7 billion from commercial casinos and $33.7 billion from tribal properties, with 82 percent of the spending derived from gaming and 18 percent from non-gaming such as food and beverage, lodging and entertainment; and
- The $13.3 billion ancillary figure represents spending by gaming patrons at other businesses during their casino trip.
Employment is another direct economic impact statistic in which the gaming industry excelled. Once again according to Economic Impact of the U.S. Gaming Industry:
- The gaming industry directly employed 727,000 people in the U.S., with $13.3 billion of wages, salaries, tips, benefits and other labor income;
- This employment breakdown includes 559,000 jobs on-site at casino and corporate offices, 17,000 at U.S.-based operations of gaming manufacturers and 151,000 at businesses providing goods and services to casino patrons during trips; and
- Within the broader gaming industry, commercial casinos employed 361,000 people who earned $17.4 billion in wages and benefits, while tribal gaming operations employed 198,000 who earned $9.1 billion in wages and benefits.
When looking at the total financial impact of the U.S. gaming industry on the national economy, the AGA and Oxford Economics reported that the business supported:
- $261.4 billion of output (business sales);
- 1.8 million jobs with $74 billion in labor income; and
- $40.8 billion in federal, state and local taxes including $10.7 billion in gaming taxes.
Indeed, without the gaming industry, each U.S. household would have to pay an additional $343 in federal, state and local taxes to offset the loss.
Outside of Las Vegas, it sometimes seems the gaming industry occupies a very small corner of a local or regional economy. But combined, the wagering business has a fairly substantial national economic footprint, a fact that should be fostered and used when the nattering nabobs of casino negativism become too loud. The casino industry is quickly becoming too big, and important, to fail.