Frank Fahrenkopf, Member of the First Republic Bank Board of Advisors. USAGE: As per 2009 contract between Jamey Stillings Photography, Inc. and First Republic Bank. Photo ©2009 Jamey Stillings, All Rights Reserved.
The 2013 edition of State of the States: The AGA Survey of Casino Entertainment, which will be released this month, has good news for the commercial casino industry. On the strength of a third consecutive year with increased rates of growth, national gross gaming revenues for 2012 reached their second-highest level in history—behind only 2007, the last year before the recession hit.
Add in the impacts of direct gaming tax revenues, casino employment and wages, and a growing gaming equipment manufacturing sector, and one can see that both the present and the future of the U.S. gaming industry look bright.
When compared with figures from 2011, total consumer spending on gambling at commercial casinos—the equivalent of gross gaming revenue—rose 4.8 percent in 2012 to $37.34 billion. The increase in revenues expectedly led to an increase in direct gaming tax contributions as well, with companies returning $8.6 billion to states and local communities—an 8.5 percent increase over 2011 figures. The jobs created by the gaming industry continue to provide vital employment opportunities for more than 330,000 men and women across the country.
Another economic bright spot for the industry is the gaming equipment manufacturing sector, which continued its growth, reporting positive gains in all key measures of economic activity. Direct economic output by the gaming equipment manufacturing sector rose to $13 billion in 2012—an all-time high and 5.7 percent increase compared to 2011 figures.
Approximately 31,200 workers were directly employed in the sector during 2012, earning $2.3 billion in salaries and wages. Both the employment and wage figures were records. A full analysis of the sector, which was prepared in conjunction with the Association of Gaming Equipment Manufacturers by Applied Analysis, a Nevada-based economic research and analysis firm, can be found in State of the States.
There are two primary reasons for the improved economic fortunes of the industry. The first is commercial casino expansion into new and underserved markets like Maryland, Kansas, Maine, New York and Ohio, which became the 23rd commercial casino state last year. The states that saw the greatest increases in gaming revenue were the same ones where new casinos have recently opened.
The second reason for continued growth is the improving economy nationwide. Lower unemployment and greater consumer confidence are leading to increased consumer spending on things like leisure travel, trips to casinos and other entertainment activities.
Those casino customers are the lifeblood of the gaming industry, and to provide a better understanding of their gaming habits and behaviors, VP Communications, in conjunction with national pollster Peter D. Hart, conducted a national public opinion survey with specific questions directed at individuals who had visited a casino in the past year. They focused an additional battery of questions on 300 young adults age 21-35 who had visited a casino during the past 12 months. The two surveys reveal a great deal about the casino customer in general and young adult casino visitors in particular. A full discussion of the results can be found in State of the States, but here are some of the highlights.
Young adult casino visitors have very similar overall gambling habits to those of the general population of casino visitors, with similar percentages setting budgets before casino gambling, visiting outside attractions and restaurants, and listing gaming machines and fine dining as their favorite gaming and non-gaming activities, respectively.
However, there are differences that show that young adult casino visitors, as a group, have distinct nuances in their gambling habits that could shape the casino of the future.
According to public opinion polling, more than one-third (34 percent) of Americans visited a casino in the past 12 months, with young adults age 21-35 having the highest rate of casino visitation, with nearly two out of five (39 percent) going to a casino.
The lottery was the most popular form of gambling for both overall casino visitors (68 percent) and young casino visitors (72 percent) in 2012, but young casino visitors had higher participation rates in other forms gambling like casual betting with friends, playing poker and wagering on the internet.
In addition to visiting casinos at a higher rate than other age groups, young adult casino-goers are more likely to come back, as nine out of 10 (90 percent) say they plan to return to a casino in the next 12 months. This is a higher rate than the more than three-quarters (79 percent) of the general population of casino visitors who say the same.
As I mentioned earlier, electronic gaming machines are the most popular game for the overall sample of casino visitors (61 percent) and young adult casino visitors (51 percent). However, the gap between machines and the second-most popular game—blackjack—was much smaller for young casino visitors (27 points) than casino visitors in general (42 points).
Non-gaming activities are an important part of the casino experience for both young adult and general casino-goers. Fine dining is the most popular amenity for both the general population of visitors (69 percent) and younger visitors (76 percent), but young adult visitors are more likely to take advantage of non-gaming amenities like shopping, live entertainment and recreational facilities like spas or pools.
One thing that all of this polling reveals is that our customers enjoy their time at our casinos. From the latest games to world-class non-gaming amenities, the entertainment experience they receive is second to none, and it’s that experience that keeps them coming back. Our customers are truly the reason that the commercial casino industry has been able to achieve its current success, and they will be crucial to continuing that success in the future.