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Gambling revenue is estimated to rise around the world, reaching
$144 billion in 2011.
Total US gaming revenues $57.2 billion in 2009.
The US is forecasted to remain the largest region although Asia
Pacific will be the fastest growing with a projected 23.6% increase
compounded annually to $62.9 billion in 2014 from $21.8 billion in
2009.
The gambling Markets of Europe, Middle East and Africa will
grow 1.9 percent each year, from $25.2 billion to $27.8
(PricewatershouseCoopers, 2010).
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Gross gambling revenue (GGR) is the amount wagered minus the
winnings returned to players.
GGR is the figure used to determine what a casino, racetrack,
lottery or other gaming operation earns before taxes, salaries and
other expenses are paid — the equivalent of "sales," not "profit."
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Past five years have seen mature markets in
North America, Europe, Australia/N.Z.
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Asia is the emerging growth market
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Revenues flattening
Increased consolidation & diversification
Increasing social backlash
Greater liberalization and tentative introduction of
gambling in Singapore, Korea, Japan, Thailand,
Taiwan, India, China
Internet Gambling increasingly prevalent
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Park Place Entertainment is world's largest casino gaming
company with 30 resorts in 5 countries (U.S. Canada, Australia,
South Africa, Uruguay). Canada: Casino Windsor, Casino Nova
Scotia (owned by Ont govt., day-to-day operations contracted out
to Park Place)
MGM Mirage is the world's #2 gaming company with 19
properties in 4 countries; took over Mandalay in 2004
Increasing consolidation
International Game Technology has 74% of North American
market for EGMs. In Jan 2005 it took over the major Canadian
gaming machine distributor, Hi-Tech Gaming.
YEAR
TOTAL COMMERCIAL CASINO
TOTAL GAMING
1999
22.2
$58.2
2000
24.3*
$61.4
2001
$25.7*
$63.3
2002
$26.5*
$68.6
2003
$27.02*
$72.9
2004
$28.93
$78.8
2005
$30.29
$84.4
2006
$32.42
$90.9
2007
$34.13
$92.3
2008
$32.54
N/A
Note: All amounts in billions
*Amount does not include deepwater cruise ships, cruises-to-nowhere or noncasino devises
Sources: American Gaming Association, Christiansen Capital Advisors LLC
Casino Market
2008 Annual Revenues
1 Las Vegas Strip
2 Atlantic City, N.J.
$6.121 billion
$4.545 billion
3 Chicagoland, Ind./Ill.
$2.251 billion
4 Connecticut
5 Detroit
6 Tunica/Lula, Miss.
$1.571 billion
$1.360 billion
$1.105 billion
7 St. Louis, Mo./Ill.
$1.031 billion
8 Biloxi, Miss.
9 Shreveport, La.
10 Boulder Strip, Nev.
$951.27 million
$847.61 million
$836.60 million
11 Reno/Sparks, Nev.
$779.38 million
12 Kansas City, Mo. (includes
St. Joseph)
$756.22 million
13 Lawrenceburg/Rising
Sun/Belterra, Ind.
$731.65 million
14 New Orleans, La.
$701.37 million
15 Lake Charles, La.
$651.23 million
16 Downtown Las Vegas, Nev.
$582.46 million
17 Laughlin, Nev.
18 Black Hawk, Colo.
$571.18 million
$508.69 million
19 Yonkers, N.Y.
20 Council Bluffs, Iowa
$486.46 million
$468.52 million
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Also a trend toward
increased
diversification and
more destination type
casinos (e.g., Fallsview
in Niagara Falls; casino
de Montreal has signed
a contract with Cirque
de Soleil)
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Net revenue from government-run lotteries, video lottery terminals
(VLTs), casinos and slot machines (not in casinos) rose steadily from $2.73
billion in 1992, before levelling off and remaining at over $13 billion since
2005, but then dropping for the first time in 2008, to $13.67 billion from
$13.70 in 2007.
Just under half of women and men living alone reported spending money
on at least one gambling activity; however, the men spent 50% more than
women—$814 compared with $516.
Gambling participation and expenditure rates increased with household
income. For example, 34% of households with incomes of less than
$20,000 gambled in 2007 and spent an average of $678, while equivalent
figures for those with incomes of $80,000 or more were 58% and $798.
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Albertans spent a total $25
billion in 2008, down
from$26.3 billion in
2007(AGLC, 2009).
Of the $25 billion in total
gaming revenues collected
about $15.5 billion came
from slot machines, $8.9
billion from VLTs and the
rest from electronic bingo
and lottery ticket sales on
such things as Lotto 6/49.
3%
2% 1%
7%
Provincial Governments
Private Operators
Charities & Community
Organizations
34%
53%
Horse Racing
Associations
First Nations
Federal Government
Statistics taken from 2003 fiscal year
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3.2% of Canadian adults are affected by
moderate to severe problem gambling
(Williams, 2009).
2.2% of youth aged 15–24 are affected by
moderate risk or problem gambling (Huang,
2007).
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Top 10% of spenders account for the majority of
gaming revenues. Yet very little is known about the
socioeconomic characteristics of these individuals.
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A portion of these people are wealthy ‘high rollers’. In Las
Vegas high-rollers account for 5% of gamblers but generate 40%
of total revenue. High rollers account for a smaller portion of
revenue in most other jurisdictions.
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Problem gamblers account for significant portion of gambling
revenues. In Canada, roughly 33% of gambling revenue comes
from problem gamblers. Proportion derived from problem
gamblers also dependent on the type of gambling: highest for
EGMs (60%) and casino gambling, lowest for lotteries (20%).
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Increase in employment (47,500 persons employed in the Canadian
gambling industry; 600,000 in U.S.) (unemployment rates, welfare &
unemployment insurance payments decline by about 1/7th (Gerstein et
al., 2002)). Wages not high, however, 1/3 compensation comes from tips.
Increased government tax revenues or direct gambling revenue (a
voluntary tax that prevents involuntary tax increases).
Significant revenues for charities.
Increased revenue and employment to complementary industries (hotels,
tourist facilities)
Increased property values (although this also means increased rental
costs)
May repatriate gambling money flowing outside the jurisdiction.
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Private benefits and costs
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Social benefits and costs
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Are we aware of the costs of gambling (can we
know?) borne voluntarily
Is the community aware of the costs
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Gamblers fully informed
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Gamblers must be rational
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Gamblers must be required to bear the total
costs of their gambling – if one of these
conditions fails to be satisfied an element of
social cost exists.
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Displacement or cannibalization of competing
industries
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particularly certain gambling industries: horse racing, bingo
some demise of entertainment and amusement industries (bars,
restaurants, etc.)
Some demise of general merchandise
Increased infrastructure costs (roads, sewers, police,
utilities, etc) due to increased tourism
Economic costs due to increased problem gamblers
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Absenteeism and loss of productivity; embezzlement
Costs of police, trials and incarceration
Health and treatment costs
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Inflow of money or resources from outside the
jurisdiction.
Creation of something of value that adds to
wealth of the jurisdiction (because of its
intrinsic wealth) or increases the value of other
things in the jurisdiction.
Increasing the number and frequency of
monetary transactions between individuals so
that more people can benefit from the existing
wealth within a district.
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Positive social effects due to positive economic effects (e.g.,
employment, govt revenues)
Gambling as an enjoyable leisure activity; a form of adult play.
This is how it has always been seen in Chinese culture.
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The pleasure of fantasizing about being rich
The pleasure of being intoxicated (gambling as a high)
The pleasure of escape (gambling as theatre). Perhaps for some it is an
effective way of handling stress.
Gambling may provide social support to isolated older adults.
May encourage an entrepreneurial, risk-taking spirit. Provides
players with an opportunity to demonstrate strength of character and
commitment to valued social codes such as risk-taking, courage and
honesty.
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Legal gambling has a dampening effect on illegal gambling and
corruption.
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In western Canada illegal gambling still extensive in the four largest
cities—Vancouver, Calgary, Edmonton, and Winnipeg; less so in
medium-sized cities and a minor concern in rural areas (Smith &
Wynne, 1999)
A small portion of laundering money is laundered in casinos
Mostly sports betting with a bookmaker, unauthorized poker clubs,
unlicensed VLTs, and offshore lottery sales (Smith & Wynne, 1999)
(if govt offered competitve odds it would drive out all illegal
gambling)
In Ontario, there are illegal gaming venues offering blackjack, poker,
roulette; patronized because they offer services not available
elsewhere (prostitution; house credit; drugs)
Illegal gambling will always exist if it has a competitive edge
(more convenient, better odds, different games, house credit,
drugs/prostitution, tax-free winnings)
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Undercuts work ethic?
Corrupting influence on society because it promotes
materialism and hedonism?
Creates divisions within society because of different
attitudes and religious beliefs about gambling (e.g.,
intra-tribal divisions in many tribes that established
casinos)
Corrupting influence on governments and nonprofit
sector. Their dependency on the revenue blinds them
to the fact that 1/3 of this money comes from problem
gamblers.
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Roughly 3-4% of population in Canada is a problem gambler, which represents a
significant increase from 20 years ago.
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Problem gamblers impact their families with all of the above, plus:
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depression
suicide
bankruptcy
Crime
Work or school problems
Health problems
Problems with Family or Friends
Spousal abuse or divorce
Child neglect
Modelling of gambling to children
Impact on PG prevalence rates tend to take a few years, then stabilizes, then
perhaps decreases. Specific impact on PG prevalence rates also very much
influenced by social cohesiveness/vulnerability of society (e.g., soft drugs
essentially legal in Netherlands, but rates of cannabis and hard drug use among
the lowest in western world).
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Depends on whether the gambling patrons are tourists or locals.
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If locals, then most of the economic ‘benefits’ represent cannibalization of other industries
and no ‘net’ increase in wealth to the jurisdiction. If tourists, this represents a true inflow
of new wealth.
If locals, you increase problem gambling prevalence rates in your own populace. If
tourists, the ‘problems’ go home with the tourists.
Depends on the type of gambling (i.e., some forms like lotteries create very few
problem gamblers, other forms, like VLTs create high proportions of PGs and very
few employment benefits).
Depends where where the profits go
 Employees local or not
 Owners local or not
 Profits reinvested locally or on other projects elsewhere
Depends where the supplies are purchased from (gambling equipment, furniture,
food, hotel supplies)
Depends where the taxes and revenues go (taxes/revenues going to the
jurisdiction or federal/provincial level; tax money reinvested in the region?)
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Las Vegas
 90% money from visitors
 owners local and reinvest in other local operations
 problem gamblers go back home
 not a manufacturing or agricultural region so a lot of money spent on
supplies from elsewhere
Atlantic City
 Similar to Las Vegas
Many U.S. Native casinos
 Native casinos also do not pay federal tax, so revenues stay on site
Tourist-restricted or tourist-dominated venues around the world (e.g., France,
Vietnam, Macao, etc.)
Large, destination-style casinos on Canadian border (Windsor, Niagara Falls) that
draw significant portion of patronage from U.S.
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Everywhere else
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In the United States, comprehensive socioeconomic analyses of Aboriginal Gambling has
determined that bands that introduce casinos have resultant:
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significantly better financial status -> which presumably results in better social & health services
significant increases in employment (7-26%)
significant decreases in poverty (14%)
significant increase in house prices ($6000)
this increase in employment, etc. presumably has positive social benefits for the families of these
employed workers
significantly higher bankruptcies (10%)
significant increase in crime, although perhaps not on a per capita basis (as these communities also tend to
have significantly increased population (5-12%))
Several reservations have experienced intra-tribal conflict, often between elders and the young (gambling
having a commercial function rather than a ceremonial one; worsening of existing addiction problems).
The economic benefits have been very uneven. Many Indian casinos are not profitable (13% of the casinos
accounted for 66% of the revenue).
In several cases the biggest winners are non-Aboriginal investors.
Misappropriation of casino revenue has occurred in several situations.
In Canada, there hasn’t been a similar comprehensive socioeconomic analysis of the costs and
benefits. However:
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The Saskatchewan First Nation casinos are a major economic success story ($100M in 2004; 70% of jobs
occupied by Aboriginals).
Casino Rama generates substantial revenues for Ontario Aboriginal groups.
Sydney Casino in Nova Scotia generates significant revenues for N.S. Aboriginal groups.
Mohawks in Quebec reaping huge revenues from Internet gambling.
Been a few economic failures as well.
Conclusions
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On the whole, it can be said that most Aboriginal casinos have tended to produced clear
economic benefits for the individual tribes operating them that are offset, to some extent, by
increased social problems. In weighing this trade-off, it is important to realize that
Aboriginals already have the highest rates of problem gambling in North America (in
Canada, provincial surveys suggest 10-15%).
In both the U.S. and Canada there are features that clearly differentiate successful casino
situations from the unsuccessful ones: having a monopoly, location close to major
population centres, and provision of ‘destination style’ casinos.
At a macro or jurisdiction-wide level, net economic or social benefits from casino gambling
are often not present.
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First, gambling generally doesn’t create wealth, it generally just redistributes it. Economic gains in one
community are typically offset by economic losses in another community. Economic gains that the
government accrues from gambling are typically offset by economic losses in privately run entertainment
enterprises. The only situation where this is not true is where your patronage comes from outside your jurisdiction
(e.g., Las Vegas, Atlantic City), in which case new wealth does flow to your jurisdiction (and the problems go home
with the tourists).
Secondly, this is not an innocuous redistribution of wealth, as the gambling industry creates problem
gamblers (perhaps 3-5% in AB). Problem gamblers have negative social and economic impacts on
themselves, their families, their employers, and society.
Thirdly, it is ethically problematic for any jurisdiction to generate revenues from gambling, as roughly
35% of gambling revenue comes from moderate risk or severe problem gamblers. This is particularly true
for gaming machines (slots/VLTs) (60%), which comprises the bulk of casino revenue.