US Gambling Industry Generates Tax Revenues of $40.8BN in 2017

Gambling is big business, and nowhere is this more apparent than in the world’s biggest economy where the sector had a massive economic impact of $261.4 billion in 2017, and provided employment for around 1.8 million people. A whopping $40.8 billion was subsequently collected by way of federal, state and local taxes, according to a new study commissioned by the American Gaming Association (AGA).

The study entitled ‘Economic Impact of the US Gaming Industry‘ was carried out by Oxford Economics, and commenting upon its findings, Sara Slane, Senior VP of Public Affairs for the AGA , stated:

“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.”

Different Gambling Sectors

The study included revenue results across the whole spectrum of gambling products, including commercial casinos ($55.7bn), Native American casinos ($33.7bn), gaming manufacturers’ revenue ($6.3bn), and ancillary spending ($13.3bn). Nevertheless, the overall economic impact of the gambling sector far exceeds the $109 billion produced in total direct spending last year, and increases to $261.4 billion when its potential to support employment and boost revenues across numerous other industries is taken into account.

Employment

According to the Oxford Economics study, the USA’s commercial casinos provided employment for 361,000 people last year, while tribal casinos employed an additional 198,000 individuals. Together, they were paid a combined $26.5 billion in income, with another 17,100 employees contracted by gaming manufacturers earning a further $1.1 billion.
Meanwhile, patrons’ ancillary spending helped create 151,000 jobs across other sectors, contributing an extra $5.7 billion in labor income.

In total, the gambling industry provided direct employment for 727,000 people who subsequently received $33.3 billion in wages, salaries, and tips. Nevertheless, the study explains that this figure rises to 1.8 million jobs and $74 billion in salaries, benefits, and tips once its chain effect on completely different sectors is taken into account.

Casino Sector Worth $89BN

Consumers spent a total of $89 billion at the country’s casinos in 2017, of which $73 billion comprised gambling revenue, and $16.5 billion non-gaming revenues. The latter category includes a number of different products and services, such as food and beverage, hotel rooms, and entertainment.

In terms of their respective shares of revenue, gambling accounted for a massive 82% slice; while non-gaming revenues came in at 18%. Furthermore, commercial casinos generated 62.3% of all casino revenue in 2017, with Native American casinos accounting for the remaining 37.7%.

Commercial Casinos Win Record $40BN

Last month, the AGA also released its annual ‘State of the States: The AGA Survey of the Commercial Casino Industry‘ which revealed that the USA’s 24 states with commercial casinos generated $40.28 billion in gaming revenue last year, marking a record high as well as a 3.4% improvement over 2016. This resulted in $9.23 billion in tax revenue from these commercial gaming operations.

According to the report, 20 out of 24 commercial casino states reported year-over-year gambling revenue gains, 12 of which set new records, led by Maryland (+34.6%) thanks to MGM National Harbor which opened for business in December, 2016.

Meanwhile, West Virginia (-4.6%) suffered the greatest revenue decline of the four states that posted year-on-year losses, once again due to the MGM National Harbor which poached West Virginian customers located close to the Maryland border. The slide was even more pronounced for the Hollywood Casino at Charles Town Races which saw its business slide by 10% compared to a year earlier. On the plus side, the venue opened the Mountain State’s first sports book on September 1st, and in so doing became the 5th state to offer the full range of legalized sports betting products, the others including Nevada, Delaware, New Jersey, and Mississippi.

The three other states suffering year-on-year declines include New Mexico (-2.09%), Mississippi (-1.99%),  and Illinois (-0.39%).

Finally, Nevada naturally continues to lead the country’s casino market in terms of revenue, and generated $11.6 billion (+2.8%) last year, followed a long way back by Pennsylvania on $3.2 billion (+0.4%), New Jersey on $2.66 billion (+2.1%), Louisiana on $2.56 billion (+0.93%), and New York on $2.35 billion (+16.4%).