09/30/2014 3:43PM

Industry report: U.S. casinos generate $38B in tax revenue


The American Gaming Association, the lobbying and public-relations arm for casinos across the United States, released a study on Tuesday purporting to show that the U.S. “gambling industry” accounted for $38 billion in tax revenue to federal, state, and local governments and has a total economic impact of $240 billion.

The estimates, part of the AGA’s larger annual report, are the opening salvo in what is expected to be a years-long campaign by the AGA to reposition the gambling industry in the United States. The campaign is likely to result in casinos seeking tax relief from state governments, an effort that could jeopardize the massive subsidies that the racing industry receives from casinos in many states.

Last week, the head of the AGA, Geoff Freeman, wrote an op-ed in USA Today arguing that “basic economics applies to casinos,” an indication that casinos will be seeking a greater share of their revenue in the future.

Some casinos send as much as 60 percent of their revenue to the state, with that money being used to provide tax relief or fund education or other popular programs. In addition, approximately $350 million of racing’s current $1 billion in annual purse distribution is provided by casino subsidies, nearly all of those mandated by state law.

“Understanding [gambling’s] proper role in smart economic development requires a different political approach to [gambling] and the rules that regulate it,” Freeman wrote in the USA Today piece. “ … With competition among casinos at an all-time high, restrictive regulatory environments pose hurdles to casinos that must reinvest and adapt to today’s changing consumer to continue to add jobs and provide much-needed tax revenue.”

The AGA’s report on the economic impact of U.S. gambling is being released at a time when some jurisdictions have begun to question whether casinos are providing the economic benefits that the industry promised, especially in Pennsylvania. In addition, many casinos are facing pressure from the growth of casino gambling along the East Coast over the past 10 years, a phenomenon that has played a large role in the recent closing of three large casinos in Atlantic City.

Ray Sousa More than 1 year ago
I know two things casinos are bad for racetracks and are even worse for cities where they are located. I've never met anybody that made money at a casino.i have met people that win on the horses and then give it to the casino.
Scott Kromer More than 1 year ago
I don't believe its the casinos themselves that are bad for the country as much as it is the amount of them we have....there should be a limit per state on how many casinos should be allowed
Joel Firsching More than 1 year ago
ever since casinos were introduced across the nation, the country has gone downhill. gambling does create corruption and economic problems. if there is much more money created for education, how come our kids are getting dumber ? our paychecks go to one place these days, instead of many different marketers. at least 70 % of this money should recycled into not only education, but highways and drainage. casinos shouldnt have to save horse racing if their takeout is much higher. if casino money is used for track purses, then the takeout should be much lower for the racing fan.
Neal Baker More than 1 year ago
Freedom of choice. I'm scratching my head over your analogy equating the problems in education with casino tax dollars. There are many factors to blame for the failures in education.
Matthew Hood More than 1 year ago
I get some of what your saying, but people will spend their money one way or the other. Most see casino games as entertainment and they are just spending it there instead of movies, restaurant, bars, shopping malls, etc. There is still corruption in any area where millions or even billions are involved. Tons of publicly funded projects are fraught with payoffs and back room deals.
Walter More than 1 year ago
Very astute observation Joel. Casinos work like a vacuum. The money goes into one place and is never seen again. I wish more folks realized this situation.
Walter More than 1 year ago
Casinos are the mortal enemy of horse racing
mikey More than 1 year ago
How many tracks that have slots would still be around without them.
Walter More than 1 year ago
Short term you are correct, long term is a different story. Companies realize its more efficient to plug in a slot machine & watch it generate revenue. Horse racing costs so much more to operate. Look at CD, they are arguably the most historic track in the country, and they want out of the racing business ASAP. If they had their way, they would run Oaks & Derby day and that is it. Casinos do horse racing no favors.
Boyd Cord More than 1 year ago
I can't see slot players being handicappers, they don't want to think. , roulette type games do hurt you lose the numbers players. Poker you lose the would be Handicappers.
jon g More than 1 year ago
Yup,and lotteries
Bob More than 1 year ago
And we will continue to won't we? Bbbbbb Bet...
ML NJ More than 1 year ago
In other words, the schmucks who bet real money at these places lost $38 billion plus whatever crumbs the pols left over for the casino operators and their employees.
Matthew Hood More than 1 year ago
The 38 billion is just the taxes payed. The players lost a whole lot more that 38 billion.
raymond More than 1 year ago
Racing has distributed all they receive by way of "subsidy" into purse structures that at one NY track had to be reduced. So they do put all they can into promoting thoroughbred programs that are economically feasible as well as a wealth as job creation and benefits the businesses and state by way of jobs in and outside the casino. Those involved in breeding and racing thoroughbreds receive more by way of purses so they add more to industry, and from there it is all downhill and a springboard to bigger and better schools, communities, housing, infrastructure, well lit and patrolled and protected neighborhoods so families can raise a safe and healthy family.
Chad mc rory More than 1 year ago
These numbers hit like a stiff jab. Do we want to know what Racing has done?
nick More than 1 year ago
Well, what was racing's overall handle last year? Figure 6-8% of that went into Government coffers?