Twenty years ago, on June 1, 1995, the landscape for gaming across the country was far different than it is today. That same year, the American Gaming Association was formed in part in response to a Clinton administration proposal to impose a 4 percent federal tax on gross gaming revenue. At the time, about 500 casinos existed in about two dozen states.
The industry has come a long way since then, as the number of casinos has nearly doubled and gaming is recognized as an economic engine in 40 states. Further, when you consider the combined gaming and non-gaming revenue growth, the industry’s economic impact is nearly 500 percent greater than it was in 1995—totaling nearly $250 billion today.
The industry’s success can be attributed to many entrepreneurial, creative and forward-looking leaders. One of those individuals is my predecessor, Frank Fahrenkopf, who effectively developed the AGA into a powerful industry champion.
The gaming industry of 2015 is in a vastly different place than where we were five or 10 years ago—let alone 20 years ago. Today, intense competition is the norm. But so too is an increasing sense of collaboration and industry. When our industry is unified and transparent with one another, we can achieve great things. We, as an industry, have become stronger in articulating that we are community partners who create jobs, drive economic development, and provide a path to the middle class.
The AGA has never been better positioned to represent the totality of the gaming industry than it is today. In fact, it’s ironic that the very organization that served as the blueprint for AGA’s establishment—the Motion Picture Association of America—is now encouraged to look at AGA as the model for its own evolution.
With the 20 members added this year—a 40 percent increase—we are more transparent, inclusive and stronger than we’ve ever been. And our No. 1 focus is on creating opportunities to bring our industry closer together.
We’ve built a strong structure that allows us to address emerging issues in an effective manner and with a unified, powerful voice.
One issue on which we’ve coalesced the industry is the Internal Revenue Service’s proposal to lower the gaming winnings threshold for federal tax withholding from $1,200 to $600. We’ve armed the industry to activate grassroots support, and today, nearly 11,000 casino customers from all 50 states have engaged—they’ve either signed a petition, left a comment directly with the IRS, or contacted their member of Congress by phone, on Twitter or on Facebook. Every segment of our industry—operators, suppliers and customers—is united against this proposal.
To be clear, there are many other complex issues that are part of the IRS’ proposal, and we’ve had in-person meetings with senior IRS officials to express our concerns. We have filed public comments on behalf of the industry, and we look forward to the opportunity to speak at a public hearing in late June. As we’ve done in the past, we look forward to collaborating with the IRS to improve the efficiency, accuracy and customer-friendliness of the tax reporting process—we look forward to building a stronger partnership.
Confronting dangerous federal issues has long been a hallmark of the AGA. A new area where we are making a difference is effectively communicating the value of gaming. This effort is taking us from Massachusetts to Florida, to traditional gaming states and now to Japan. It is not the AGA’s role to encourage expansion, but rather to make sure that any conversations about gaming are fully informed.
In Japan, we’ve organized roundtable discussions with experts on various relevant topics, such as the economic benefits of gaming, responsible gaming and anti-money laundering practices. AGA members have attended these roundtable discussions with reporters in New York and Tokyo, and the interest from Japanese media has been remarkable. There simply hasn’t been anyone filling the void, pushing back against misinformation. We’re proud to play that role and to highlight the positive experiences of gaming here in the United States.
So what does the future hold for the gaming industry and the AGA?
In the United States, as the gaming industry matures, it’s true that we’re going through some natural growing pains. Everyone wants to know “what’s next” for the gaming industry.
Appealing to new customers, competing in an increasingly crowded environment for discretionary entertainment dollars and fostering policies that promote innovation are on everyone’s mind. The New Jersey First program is a great example of regulators encouraging innovation. Additionally, Nevada permitting elements of skill in casino games that passed unanimously in the legislature and was signed into law by Governor Brian Sandoval last month is a positive, forward-thinking step.
As we seek to grow, it’s also imperative that we crack down on the illegal operations that siphon critical revenues and tarnish the legal, highly regulated products and experiences we provide. Just this past month, we launched our “Stop Illegal Gambling—Play it Safe” initiative in Biloxi, as illegal gambling is a serious problem that taints the goodwill of the gaming industry. We’ve already elicited tremendous interest from attorneys general and other officials at various levels of law enforcement, and look forward to bolstering those relationships.
As we look back at the past 20 years, I think it is safe to say that the AGA at 20 is maturing and growing ever more valuable to the gaming industry. We’re deepening our ties to the industry, surfacing new opportunities and ably representing gaming’s interests. It is important that the AGA continues to be innovative, transparent and inclusive. And AGA looks forward to taking on a leadership role to ensure that this happens.
