THE COMMERCIAL CASINO INDUSTRY AND THE ECONOMY

As the 111^th Congress considers legislative measures to spark our nation’s economic recovery, one of the most important principles guiding its considerations must be to ensure taxpayer dollars are put to use in ways that maximize their beneficial impact, whether aimed at businesses, employees or citizens in general.         

As a key component of the nation’s tourism and entertainment industry, there are few sectors in our national economy that require such considerable capital expenditures, are as labor intensive and are as supportive of thousands of outside vendors and suppliers as the commercial casino industry.  Commercial casinos and racetrack casinos help communities succeed, and they deserve support in any future stimulus package.

INDUSTRY CONTRIBUTIONS

• In 2008, the commercial casino industry employed more than 375,000 people earning more than $13 billion in total wages: more direct employees than the U.S. automobile industry, software manufacturers or wireless phone carriers.
• Commercial casinos are a vibrant component of the modern entertainment landscape.  A quarter of the U.S. adult population chooses to spend its entertainment dollars at a casino at least once a year, a significant figure given the myriad of entertainment options available.
• Commercial casinos are significant contributors to the nation’s economy, with gross gaming revenues totaling more than $32.5 billion in 2008.  They are even more vital to the states and communities where they operate, creating jobs and business opportunities for local vendors and suppliers and providing more than $5.6 billion in direct gaming tax revenues to stimulate struggling economies and help communities grow.
  • In Iowa, for example, casinos purchased more than $293 million in goods and services from companies based in their state in 2008.  This represented nearly 92 percent of their total spending on products, supplies and services and is indicative of what happens in other states and communities around the country. 
• Commercial casinos are committed to promoting diversity as a business imperative.  Commercial casinos employed more minorities than the national U.S. workforce by 20.6 percent in 2007.  They also purchased more than $631 million in products and services from diverse vendors, representing 13.2 percent of total eligible commodity spend, far exceeding national standards for minority spend.
• Commercial casinos and racetrack casinos mean jobs, revenues and opportunity for 20 states across the country.  To see how commercial casinos contribute to your state, refer to the chart below.

Tax and employment  figures are as of 12/31/2008
¹ FY 2008
² CY 2007

IMPACT OF THE RECESSION

• In 2008, revenue numbers for the national commercial casino sector were down 4.7 percent compared to 2007.   The trend has continued in the first months of 2009.  In fact, gross gaming revenues compared to the same month of the previous year have declined every month since February 2008, and as the recession in this country has gotten worse, monthly revenue decreases have become more significant. 
• There are two crises that have combined to create the perfect storm the gaming industry – and every other consumer-driven industry in the country – is facing: the precipitous drop in consumer spending and the national credit crunch. 
  • As Americans feel the pinch of the recession, casino patrons have begun to cut their entertainment expenses.  They are taking shorter trips for fewer days, and they are spending less on the high-end amenities like restaurants, shows and spas that have become such intrinsic parts of our multi-faceted casino resorts.
  • The lack of available capital has forced many gaming companies to delay new developments, and several projects have been cancelled altogether.  This has made expansion, a hallmark of our industry in recent years, much more difficult.
• The commercial casino industry already has had to make difficult choices to cut costs in the current environment, including reducing staff, pay and hours, and halting development and expansion projects that would have injected jobs and revenue into communities.  The combination of the global credit crunch, rising unemployment, flagging consumer confidence, tightened spending and general economic outlook for 2009 portends another extremely difficult year.