Study Reveals Positive Economic and Societal Benefits of Casino Gambling in New Jurisdictions

BILOXI, Miss. – The gaming industry has been responsible for a dramatic increase in new jobs and higher wages, especially among minorities and women, in three regions where gaming has been introduced in the last several years, according to an Arthur Andersen study released today.

According to the study, “Economic Impacts of Gaming in the United States, Volume 2: Micro Study,” which examines three new gaming jurisdictions - Gulfport/Biloxi, Miss. Shreveport/Bossier City, La.; and Joliet, Ill.; - there has also been a surge in retail sales and tax revenues and a market decline in public assistance, such as welfare, food stamp and Aid to Families with Dependent Children (AFDC) programs.

“We in the gaming industry are well ahead of the national policymakers who struggled for years to find ways to help people get off welfare and get them into the workforce,” said Frank Fahrenkopf, president and CEO of the American Gaming Association, when he released the study’s findings during his keynote address at the Southern Gaming Summit. “The micro study reveals a solid formula: Provide people with opportunities… Give them something to work for, and they will grab the chance to make a contribution. In most simple terms, the answer is dignity.”

The study reveals that on average in the three jurisdictions, the tax-to-wage ratio is 60 cents paid in state and local taxes for every $1 paid in wages, and these revenues have gone to pay for community services and played an extremely important part of each city’s budget. The study also shows that in each jurisdiction, in addition to lowering public assistance programs, the introduction of casinos has led to growth in retail sales, commercial and new housing construction and restaurants.

“This study, in effect, disproves the arguments made by anti-gaming advocates that gaming is a “predatory” industry and that the social costs outweigh the economic benefits,” said Fahrenkopf. “The findings enable us to take anti-gaming theories out of the classroom and into the real world by demonstrating the astounding economic and social impacts the industry has made on real communities and real people.” Fahrenkopf compared the arguments of anti-gaming advocates to three legs on a wobbly stool that “can’t stand up to reality.”

Biloxi/Gulfport, Mississippi

• In 1996, approximately 35 percent of those employed by the 10 casinos in the area were minorities, while minorities held only 22 percent of the jobs in the Metropolitan Statistical Area (MSA).
• Sixty-two percent (11,200) of the 18,100 jobs created in the area since 1990 were created by casinos.
• Women held approximately 60 percent of the area’s casino jobs in 1996.
• Harrison County retail sales tax collections rose from $79.1 million in 1992 to $130.3 million in 1995.
• The number of AFDC recipients dropped more than nine percent in 1995 and 15 percent in 1996.
• After increasing steadily for many years, the number of food stamp recipients has dropped steadily each year since 1993.
• Casinos paid $76 million in 1996 state and local gaming taxes, up from $68 million in 1995.

Shreveport/Bossier City, Louisiana

• From 1993 to 1996, 56 percent of casino employees in three gaming facilities were African-American or another racial minority.
• More than one-half (5,100) of the 10,000 new jobs created in the region between 1993 and 1994 were created by the opening of casinos.
• Casinos paid $110 million in 1996 in state and local gaming taxes, up from $99 million in 1995.
• AFDC payments dropped 14 percent in 1995 and 15 percent more in 1996.
• The number of food stamp recipients dropped by 15 percent in 1996.
• In 1994, the year in which the casinos opened, retail sales in Shreveport and Bossier City increased by more than 10 percent, the highest growth rate in 11 years.

Joliet, Illinois

• In 1995, 21 percent of the employees at the two Joliet casinos were African-American or another minority, and approximately 58 percent were women.
• Casinos paid $82 million in 1996 state and local gaming taxes.
• Retail sales were $3.2 billion in 1995, up from $2.4 billion in 1992, the year casinos opened.
• Unemployment rates dropped from 12 percent in 1992 to nine percent in 1994.
• After a steady increase in the first five years of the decade, the number of AFDC recipients has dropped by more than 14 percent since 1994.
• The number of food stamp recipients in Will County has dropped 14 percent since 1993.

Funded by the American Gaming Association (AGA), the micro study is the second part of an Arthur Andersen macro study released in December 1996, which examines the economic impacts of casino gaming on the economy of the entire United States. Established in 1995, the AGA was formed to represent the gaming-entertainment industry by addressing regulatory, legislative and educational issues.