As commercial casinos carry on with their rebuilding efforts on the Gulf Coast and the overall industry continues to grow, it’s safe to say our industry has weathered the storm and is looking forward to a bright future….
I used those words last year to conclude my report to you on the findings from our State of the States survey. Now, a year later, that bright future is being realized in commercial gaming markets across the country, as evidenced by the encouraging data included in this year’s report, which we released earlier this month. Here are just some of the highlights from the 2007 State of the States survey:
- Gross gaming revenues continued to grow steadily in 2006, totaling $32.42 billion—a 6.8 percent increase over 2005 figures.
- The 540 commercial casinos in 11 states directly employed 366,197 people. These employees earned a total of $13.3 billion in salaries, including benefits and tips—a 5.6 percent increase over 2005.
- Casinos contributed $5.2 billion in direct gaming taxes to state and local governments—a 5.5 percent increase over 2005 contributions. These taxes were used to fund, among other things: education, historic preservation, economic development, youth/health care/senior citizens’ and veterans’ programs.
- Racetrack casinos (racinos) continued to be a vital and expanding segment of the U.S. commercial casino industry, with the 36 racetrack casinos in 11 states generating $3.62 billion in gross gaming revenues—a 16 percent increase over 2005 totals.
- Racetrack casinos contributed $1.44 billion in direct gaming taxes to state and local governments—a 12.5 percent increase over 2005.
- Employment also grew considerably in the sector, with 22,308 individuals employed at racetrack casinos—a 30.3 percent increase over 2005.
In the spirit of full disclosure, it should be pointed out that the predictions of continued success I made for our industry last year were not a reach. A wise man once said the “past is prologue,” and a snapshot of the economics of commercial casino gaming during the past decade shows that to be true: our industry continues to grow in size and success every single year.
This success can be attributed to a number of factors, not least of which is the fact that an overwhelming majority of Americans continue to view casino gambling as an acceptable form of recreation. In fact, according to the annual poll of adult Americans conducted for the State of the States survey by Luntz, Maslansky Strategic Research and Peter D. Hart Research Associates, Inc., 82 percent of adult Americans polled for the 2007 State of the States survey consider casino gaming to be an activity that’s acceptable for themselves or others. Furthermore, almost 7 out of 10 interviewees see legalized casino gambling as a good way for state and local governments to generate revenue without raising taxes. There also is widespread agreement that casinos bring economic benefits to other industries and businesses.
With these high acceptability benchmarks, it should come as no great surprise then that more than a quarter of the U.S. adult population visited a casino in 2006, according to figures outlined in the report. These 56.2 million casino visitors made a total of 371 million trips—an increase of 3.4 million visitors and 49 million trips over 2005 figures. And it’s more than just gambling that is drawing growing numbers to our casino sites. Visitors are enjoying the increasingly diverse array of entertainment options available at casinos. In fact, this year’s survey shows that more than twice as many Americans find the overall casino experience—the food, shows, entertainment and everything else—to be more fun than the actual gambling.
This year’s survey also provides a look at two specific areas of gambling: poker and sports betting. It’s no surprise that the poker boom has continued, with 14 percent of Americans playing poker during the past year. Though the boom has cooled a bit from its peak the past two years, the poker sector is still performing strongly. Revenues from poker in 2006 reflect a substantial 15 percent over 2005 figures, with players spending more than $238 million in Nevada and New Jersey alone. There also were 713 card rooms in five states, and the four states that track card room revenues reported a take of some $1.1 billion last year.
And making its debut in this year’s survey is a section spotlighting sports betting. Our survey found that participants wagered more than $2.4 billion in Nevada sports books last year, the only place in the United States where sports betting is legal, with revenues from the activity totaling $192 million, about 8 percent of the amount wagered.
2006 marked the first full year of gaming operations since the twin disasters of hurricanes Katrina and Rita dramatically impacted the casino operations along the U.S. Gulf Coast, and this year’s State of the States survey also includes the results of a new poll of opinion leaders from the region on the status of recovery efforts and the outlook for the future, particularly with regard to the region’s gaming industry. These leaders form an elite group, including college professors, bank presidents and chamber of commerce executives, 45 percent of whom have lived and worked on the Gulf Coast for more than 20 years.
Those polled think the casino industry has been a major contributor to overall recovery efforts in the region and think the industry will grow more quickly than the balance of the local economy in coming years. They also see the shift to land-based resorts on the Mississippi Gulf Coast as key to the growth of non-gaming amenities that will help the region’s tourism and gaming industries grow beyond pre-hurricane levels. Furthermore, these respondents expect that within 10 years, the overall level of tourism in the region will be greater than before the hurricanes struck.
This review of where our industry stands has a familiar ring. I could conclude with many of the same words I used last year. Simply put, we’re doing well, and the future looks bright. But I believe the results we are seeing deserve a bit more comment than that. We should recognize that our industry has been given a collective nod of approval for our successes, for our contributions as economic engines in local communities and for the fine work we do as good corporate citizens. We are a staple of communities across this great country, and our continued success is at one with the growth of our nation. As this present becomes the past, I have no doubt it too will be an apt prologue for our industry’s ongoing story of growth and success.