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U.S. casinos rake $34B

May 20, 2008 7:05 PM

By David Stratton | The commercial U.S. casino industry won $34.1 billion from gamblers last year, a 5.3 percent increase over revenues in 2006, according to a report released last week by the American Gaming Association (AGA).

In addition to posting increased earnings in an economy on the downturn, the gaming industry experienced growth in virtually all commercial markets.

"The casino entertainment industry has experienced high levels of growth and maturation in recent years," said Frank Fahrenkopf, chief executive of the AGA. "In looking at the last decade, it is evident that we are not only an economic force on a national level, but that we are major players in the local communities where we provide steady jobs and economic development."

Fahrenkopf attributed the industry’s economic growth to several factors: introduction of casinos into new jurisdictions; opening of new properties in existing jurisdictions; revitalization of existing properties; and redevelopment of gaming venues damaged by Hurricane Katrina.

In addition, upcoming projects in St. Louis, Atlantic City and Las Vegas will inject billions of dollars into those jurisdictions.

Last year, casino revenues increased or stayed relatively constant in every state except New Jersey, where a smoking ban and competition from neighboring states led to a 5.7 percent decline in gaming revenue.

Iowa and Mississippi had the most significant increases in gaming revenue, up 16.2 percent and 12.5 percent, respectively.

Racetrack casinos or "racinos" enjoyed a banner year as revenues reached record levels with consumers spending $5.28 billion, a 45.6 percent increase over 2006.

Both Pennsylvania and Florida experienced dramatic increases in attendance and revenues due to the opening of new properties, and New York saw higher numbers as 2007 was the first full year of operations for some properties there.

Poker continued to be a bright spot for most jurisdictions, especially in Nevada and Atlantic City, where combined poker revenues reached $252 million, a 5.9 percent increase over 2006 figures.

However, the level of participation in poker was down from 2004 and 2005 levels, indicating the "poker boom" has probably peaked.

The AGA’s annual State of the States report also includes a survey that revealed the equivalent of one-quarter of the U.S. adult population, about 54.5 million people, visited casinos in 2007, the largest number ever. Moreover, each visitor made an average of seven casino trips last year.

Other survey results include:

• The top five casinos games: slot machines (56%), blackjack (24%), poker (8%), craps (6%) and roulette (4%).

• The top four non-gaming casino activities: dining in a fine restaurant (72%), seeing a show or concert (48%), shopping (43%) and visiting a bar or nightclub (43%).

• Casino customer demographics: median age of 47 years old (one year above national average), median income of $59,735 (16% above national average).

The AGA’s annual State of the States report is available for downloading at the association’s web site, americangaming.org.