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The State of Play

The one constant in the gaming industry

The State of Play

Each spring since 1999, the AGA has published its State of the States report, and over those 10 years, we have seen the industry change in so many ways, from the growth of the racetrack casino sector and expansion in states like Pennsylvania and Florida to the growth of non-gaming amenities and the poker boom. These and many other factors have all contributed to the industry’s continued growth by every measure. In the last 10 years:

U.S. consumer spending on commercial casino gaming has increased 73 percent, growing from $19.7 billion in 1998 to $34.13 billion in 2007.

The growth of gaming has allowed state and local governments to pursue projects that otherwise wouldn’t be possible, as tax revenues have more than doubled in the past decade, with gaming jurisdictions receiving $2.5 billion in revenue in 1998 and $5.87 billion in 2007.

The commercial casino industry employed more than 35,000 more people in 2007 than it did in 1998, a 10 percent increase in one decade.

To commemorate 10 years of collecting and reporting data on the commercial casino industry, this year’s State of the States report includes 10-year revenue trend data for each of the states with commercial casinos from when we started producing the report in 1999. It is not surprising, given the marked growth of the industry as whole, that all 11 states saw their gross gaming revenues rise considerably between 1998 and 2007. Percentage increases over the decade ranged from 23 percent in New Jersey to 175 percent in Iowa. Three states, Indiana, Iowa and South Dakota, saw their revenues more than double in the past 10 years.

While the U.S. commercial casino industry has grown by leaps and bounds during the decade that we have been producing the State of the States survey, the industry’s overall growth in 2007, while steady, slowed somewhat compared to the past few years. But despite a weakening national economy in the last few months of 2007, the industry has proven itself to be resilient in the face of the economic slowdown. The expansion of commercial casinos into new jurisdictions, the opening of new properties in existing jurisdictions and the continued revitalization and development of individual properties across the country spurred modest but consistent growth. In fact, gross gaming revenues for commercial casino states reached $34.13 billion in 2007, an increase of more than 5 percent over 2006. Commercial casinos also contributed more in direct gaming taxes in 2007 than ever before-$5.87 billion.

The growth of the industry is even more pronounced in the racetrack casino segment, which continues to be the primary mode of expansion for the commercial casino industry. Five new racinos opened last year, and for others, 2007 was their first full year of operations. The numbers bear out this growth.

Consumer spending on racetrack casinos jumped more than 45 percent, from $3.62 billion in 2006 to $5.28 billion in 2007.

Racetrack casino tax distributions totaled $2.32 billion, a 37 percent increase over 2006.

While the data in this year’s report point to current growth, a special section outlines what the industry is doing to ensure its future growth and success. Nowhere is the dynamic nature of the gaming industry more apparent than in the many capital investment projects taking place in gaming jurisdictions across the country. Through recent and planned expansions and renovations, commercial casino companies are investing more than $53 billion in their host communities over the next few years.

As I mentioned in this space two months ago, we are in the midst of uncertain economic times, when most segments of the nation’s economy are contracting, but the commercial casino industry’s investments are representative of its commitment to the communities where we do business. It’s a commitment to bringing in tourism dollars, spurring economic development and providing jobs both in the gaming industry and in the many industries, such as construction, that benefit from increased development. The expansion and investment are proof of the commercial casino industry’s long-term partnership with its many host communities.

The more things promise to change in the gaming entertainment industry, the more the public’s opinions of casino gambling seem to stay the same. Each year, our pollsters at Luntz, Maslansky Strategic Research and Peter D. Hart Research Associates ask Americans their personal views on casino gambling, and each year we get similar results. This year, 84 percent of those surveyed said that casino gambling is acceptable for themselves or others. This result is in line with numbers that we have seen for the 10 years we have published the survey, indicating our support among the American people is steady and consistent.

Personal choice was another important concept for survey respondents this year, as 89 percent agree that people should be able to go into a casino, have their own budget and spend their disposable income the way that they want. Additionally, 86 percent see gaming as a states’ rights issue, and that people in individual state and communities should be allowed to decide what is best for them with respect to casino gaming.

The future is always an uncertain proposition. The past 10 years have been successful and eventful, but it would have been difficult to predict the road the industry has traveled during that time. It is impossible to divine where gaming will be in another decade. It is hard enough to guess where it will be in a year, especially with the economic challenges we currently are facing. However, one thing is certain: as long as gaming continues to expand and commercial casino companies continue to invest resources to create top-of-the-line entertainment options, the future will be a bright one.

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