US Gambling Industry Has $261.4BN Economic Impact in 2017

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Saturday, September 22nd, 2018 | Written by Charles Washington

The USA has a thriving gambling market that last year produced a massive direct and indirect financial impact of $261.4 billion on the country’s economy, up by 9.5% from 2014. This includes providing employment for 1.8 million people across the gambling industry as well as a range of different sectors, who then received $74 billion in salaries, benefits, and tips.

A total of $40.8 billion in taxes was subsequently collected by the federal government and individual states, of which $10.7 billion was paid in direct gaming taxes.

The results were released this week by the American Gaming Association after commissioning Oxford Economics to carry out the research on its behalf. Commenting upon the study entitled ‘Economic Impact of the US Gaming Industry‘, Sara Slane, Senior Vice President of Public Affairs for the AGA, said:

“Since our last study in 2014, casino gaming has expanded into new markets, offered innovative new entertainment options and enhanced its position as a key contributor to local, state and federal economies.”

Sectors Excluded

While the Oxford Economics report covers revenues generated by the country’s gambling industry, there are a number of noticeable omissions in its research. This includes excluding revenues derived from legalized online gambling in New Jersey, Nevada, and Delaware; pari-miutuel betting on horse racing; slot machines and video lottery terminals (VLTs) located in non-casino locations across the nation; as well as lotteries and charitable gaming.

Direct/Indirect Spending

The USA’s gambling industry received $109 billion in direct spending last year. Commercial casinos accounted for $55.7 billion of that amount, followed by Native American casinos on $33.7 billion, with ancillary spending and gaming manufacturers’ revenue coming to $13.3 billion and $6.3 billion respectively. Overall, the casino industry provided direct jobs for 727,000 people and paid $33.3 billion in wages, salaries, and tips in 2017.

Nonetheless, revenues generated rise to $261.4 billion, while jobs and wages increase to $1.8 million and $74 billion respectively once the overall economic impact of the gambling sector is taken into account, including its ability to support employment and increase revenues across a range of other industries.

“Gaming companies across the country are enabling long-lasting careers for their employees and making a huge impact on their communities through innovative partnerships with local nonprofits, volunteerism and the generation of revenue that supports critical services,” commented Sara Slane on the findings.

Casino Sector

Commercial ($55.7bn) and Native American ($33.7bn) casinos generated a combined $89.4 billion in revenues last year, with $73 billion of that amount accounted for by gambling revenue, and the remaining $16.5 billion by non-gaming products and services, such as food and beverage, hotel bedrooms and entertainment.

Further analysis of commercial casino operations can be found in the American Gaming Association’s annual ‘State of the States’ report released last month that showed the country’s 24 states with legalized commercial casino collected $40.28 billion in gambling revenue in 2017, up by 3.4% year-on-year and representing a new all-time high for the sector. These commercial casinos contributed an impressive $9.23 billion in tax revenue in 2017.

Thriving Market

According to the ‘State of the States: The AGA Survey of the Commercial Casino Industry‘, 20 out of 24 states offering commercial casinos saw their year-on-year gambling revenues grow last year. Furthermore, 12 of those set new all-time records, headed by Maryland (+34.6%) due to the $1.4 billion MGM National Harbor which opened its doors at the end of 2016. Posting the next highest gains of this group was New York (+16.41%), followed by Oklahoma (+10.2%), Kansas (+6.95%), Massachusetts (+6.28%), Ohio (5.02%), Maine (2.69%), Colorado (+2.3%), Rhode Island (0.93%), Pennsylvania (0.42%) and Florida (0.12%).

As one might expect, Nevada was the country’s biggest casino market in terms of revenue, and collected $11.6 billion last year, or +2.8% more than in 2016. A fair way back in second place was Pennsylvania on $3.2 billion (+0.4%), followed by New Jersey in third place with revenue of $2.66 billion (+2.1%). Completing the USA’s top five commercial casino markets was New York on $2.35 billion (+16.4%), and Indiana with $2.2 billion (+1.1%).

Four States Post Declines

Meanwhile, West Virginia (-4.61%) led the list of state’s posting year-on-year revenue declines, once again thanks to the MGM National Harbor in Maryland which lies close to its northern border and continues to poach West Virginian customers. Particularly affected has been the Hollywood Casino at Charles Town Races which experienced a 10% revenue slide versus a year earlier. More positively, the Mountain State became the fifth state to launch legalized sports betting on September 1st, which should help boost its numbers for the remainder of 2018.

Also posting year-on-year losses was New Mexico (-2.09%), Mississippi (-1.99%), and Illinois (-0.39%).