Casinos take hits in 2008

May 19, 2009 5:10 PM
by GT Staff |

The nation’s casinos took their hard knocks last year as revenues and jobs fell, though there were a few bright spots such as the blossoming casino industry in Pennsylvania.

A report released Monday by the American Gaming Association found that revenue nationwide was down 4.7 percent in 2008 to $32.5 billion. The year before, revenue had increased by 5.3 percent.

The country has more than 1,600 casinos, slot parlors and other gambling halls. The number of casino jobs fell 1 percent to more than 357,000, who earned a total of $14.1 billion in wages and other benefits.

With its reduction in consumer spending and freezing credit markets, the recession that began in late 2007 made 2008 a challenging year for the commercial casino industry.

Results of a 2009 public opinion poll conducted by VP Communications, Inc. and national pollster Peter D. Hart bear out the fact that consumers are cutting back on their casino gaming during these recessionary times, but not any more than they are cutting back on other activities.

Of those survey respondents who participate in casino gambling, 60 percent say they have cut back on the activity, which is similar to the proportions who have cut back on going out to restaurants and taking weekend trips.

State-by-state data reveal that the industry is far from monolithic. The recession hit some markets and regions harder than others, and each was affected by different circumstances.

For example, Nevada saw decreases in gaming (-9.7 percent) and tax revenue (-10.6 percent) due to a reduction in consumer spending on overnight travel as well as belt-tightening among local gamblers.

New Jersey, hit by a decrease in consumer spending, a partial smoking ban and increased regional competition, saw its gaming revenues decline 8.5 percent, while Colorado and Illinois saw the largest percentage drops in gaming revenue (-12.3 percent and -20.9 percent, respectively) in part because of statewide smoking bans that went into effect at the beginning of 2008.

Some markets, however, witnessed increases in gross gaming revenue in 2008. New properties in Pennsylvania, Missouri and Indiana resulted in subsequent boosts to gaming revenues in those states, with Pennsylvania experiencing the largest percentage increase (+48.3 percent).

Gaming Equipment Makers

During 2008, the gaming equipment manufacturing sector of the U.S. gaming industry made significant contributions to the overall economy, proving to be a growth area during these challenging economic times.

According to research conducted by Applied Analysis for the Association of Gaming Equipment Manufacturers (AGEM), the gaming equipment manufacturing sector produced a record $12.7 billion in economic output, a 6.7 percent increase over 2007 numbers.

Casino Visitation, Poker

According to public opinion research, a quarter of the U.S. adult population visited a casino during 2008, equaling approximately 54.6 million people who visited casinos last year. Casino gambling continued to be the second-most popular form of gambling in the U.S., trailing only the lottery.

Also, the "poker boom" that began in 2003 appears to have peaked. Poker revenues in the two largest casino states declined for the first time since 2002. Additionally, 11 percent of Americans report having played poker in the past year, which is the lowest level of participation since the AGA began tracking this number in 2002.

American Perceptions of
Casino Entertainment

When asked about their personal views of casino gambling, 81 percent of survey respondents say it is acceptable for themselves or others. They equate going to a casino with enjoying other entertainment options, like going to concerts, sporting events or plays, and see that there are myriad benefits that casinos can bring to communities, including job creation, tax contributions, increased tourism and economic development.

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