U.S. casino visitors increase

03 June 2004

As reported by: The Reno Gazette-Journal
Roughly two million more Americans visited a casino in the United States in 2003 than in 2002, according the annual survey conducted by the American Gaming Association in Washington.

But otherwise the expansion of gambling remained relatively flat, according to the survey.

“From an economy standpoint, 2003 was not the greatest year in history, and that's reflected in the numbers,” said Frank Fahrenkopf Jr., president/CEO of the AGA.

The study shows only part of the overall national gaming picture, however, because it does not include statistics on Native American gaming facilities, which operate now in 28 states - including California. Tribal governments generally do not share financial information.

The study does include some information on the six states with operational racetrack casinos in 2003. In those states, too, increases in jobs, state and federal taxes and revenues were modest.

About 53.4 million Americans visited a commercial, non tribal casino in 2003, averaging 5.8 trips per visitor, or 310 million trips. Harrah's Entertainment Inc. and NFO WorldGroup supplied the survey data.

Additionally, acceptance of gambling remained high - with more than 80 percent of respondents saying it was at least acceptable in certain circumstances - according to studies performed for the AGA by two other independent research companies.

“That's what I pay attention to - the percentage of people that approve gaming and the number of households that have visited casinos,” said local gaming consultant Ken Adams. “The approval has been a constant year-over-year for the past five years, but it has grown, and also the number of households.

“That grows the market and makes for new people who would be Reno clients. As gaming moves into more and more places that number grows.”

Much of that acceptance might have to do with the jobs and taxes generated from the 443 commercial casinos in 11 states that generated more than $27 billion in gross gaming revenue in 2003, a 2 percent increase from '02. The AGA said casinos paid state and local governments $4.32 billion in direct gaming taxes.

“The acceptance is seen in all age groups, among men and women, at all income levels, in every region of the United States and at all levels of religious participation,” the study claims.

While commercial casino employment rose modestly, in five states the figures were down, most notably Illinois, where an onerous tax burden forced casinos to close, curtail hours and cut employees. Illinois saw a 17 percent drop in casino jobs.

In Louisiana, on the other hand, employment was up 13 percent. The state has 18 casinos, 14 of them riverboats, one land-based and one racetrack casino.

The outlook for 2004?

Much of it has to do with individual states' decisions regarding tax rates for gambling activities, said Fahrenkopf, in a February speech in Las Vegas.

“I'm afraid the climate in 2004 is not much different than last year,” Fahrenkopf said. “Governors and state legislators are still facing serious budget deficits that need to be addressed. But there's one significant difference: Today we have the benefit of seeing the real impact of last year's gaming tax increases.”

In the speech, Fahrenkopf struck a now-familiar theme - over-the-top tax rates like in Illinois, where the rate hit 70 percent last year, have deleterious effects. But he also knocked the Nevada legislature, which increased the tax on gross gaming revenue by 0.5 percent last year, bringing the rate to 6.75 percent.

“An increase like this - of just one-half a percentage point - can have a dramatic effect on growth, especially here in Nevada, where gaming is central to the state's economy. On top of the 0.5 percent increase in the gross gaming tax was a new 10 percent tax on casino entertainment.

“One industry analyst called Nevada's tax increase a ‘huge deal' because ‘gambling is the lifeblood of [Nevada's] economy.'”

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