Interesting article today!!
As far as OG:
1.States need the revenues-a general and obvious statement!
2.Casinos (Harrah's et al) obviously do not want any further off-shore competition. States might but as B.F.'s plan (obviously preliminary) currently stands offshores are not eligible to be regulated and/or licensed unless they have been paying UNCLE SAM and iirc all state taxes, LOLOL!!.....will be interesting with so many dynamics at play!!
3.Sidenote:Federal control versus State control is currently, well I dunno, but does anybody yet?
States End Up Losers in Gambling Pullback
Consumers' Timid Betting Leads to Drop in Income From Commercial Casinos and Lotteries, Exacerbating Budget Deficits
AUGUST 10, 2009
By CONOR DOUGHERTY
"States' revenue from casinos, slot machines and lotteries is falling for the first time in many of the 48 states that have grown to depend on gambling as a crucial source of income.
Revenue contributed by commercial casinos to state and local governments was down 2.2% in 2008, to $5.7 billion, according to the American Gaming Association, an industry trade group. In many states, the declines have continued.
Eight of the 12 states that allow commercial casinos saw their take of gambling revenue fall in the fiscal year ended June of this year, compared with the same period a year ago, according to data from states and the Nelson A. Rockefeller Institute of Government at the State University of New York.
In five of those states, including Illinois and Nevada, gambling income fell by a greater percentage than the state's overall revenue did. Nevada's gambling-tax revenue fell 15% in the fiscal year ended June compared with the same period a year earlier. That contributed to a drop of 10% in the state's overall revenue.
Many lotteries also are hurting. In a sampling of 20 state lotteries, including California and Illinois, 14 had year-over-year drops in revenue for the fiscal year ended in June, according to Rockefeller Institute.
It is a harsh reversal for states that had come to count on the gambling industry's rapid expansion to provide steady revenue growth. States saw total gambling revenue including casino games, lotteries and horse-racing wagers rise 65% from fiscal year 1998 to $23.9 billion in 2008. Overall state revenue over the same period grew to $774 billion, up 65%.
But now, the weak economy and rising unemployment are combining with heavier competition among casinos to shrink the number of gamblers and the size of their wagers. The declining gambling revenue adds to falling sales- and income-tax receipts that have forced states to slash spending as they try to balance budgets.
"Gambling revenues are declining across the board, and states can no longer count on gambling when it comes to closing budget gaps," said Lucy Dadayan, a senior policy analyst at the Rockefeller institute.
States' dependence on gambling income varies widely. In Nevada, home to the nation's gambling capital of Las Vegas, about 30% of the state's general fund comes from gambling; in Delaware, it is about 8%. Utah and Hawaii are the only two states without some form of legal gambling.
In general, though, gambling income -- including state lottery-ticket profits and taxes on commercial gambling revenue -- has made up a growing share of state budgets. Though each state has its own way of collecting and distributing the money, gambling revenue has helped states fund expanding budgets, education, and to lower other taxes that have a broader consumer impact, such as property taxes.
But with consumers paring back spending, U.S. commercial casinos saw gambling revenue slump 5% to about $33 billion in 2008 compared with 2007, according to the gaming association. The figure doesn't include American Indian casinos.
Some states that are aggressively expanding their gambling operations continue to record revenue gains. But the proliferation of new casinos and slot machines has thinned profits as gamblers' shrinking dollars are spread across more options.
Thanks to thousands of new slot machines, Indiana saw higher overall gambling revenue in the fiscal year ended June 2009, but the take was down at casinos that had been open at least a year. New Jersey, the home of Atlantic City and the second-largest gambling state, after Nevada, has been hit hard by competition from neighboring Pennsylvania, which over the past year has added several thousand slot machines. New Jersey's share of casino revenue fell 14% in the fiscal year ended in June versus a year earlier.
Commercial casinos also are competing with the expanding number of American Indian casinos, which now exist in 28 states. Tribal casinos don't pay taxes, though several states have forged agreements that pay them a share of the casino's revenue.
Revenue at the 405 tribal casinos tracked by the National Indian Gaming Commission grew 2.3% to $26.7 billion in the fiscal year ended September 2008, compared with $26.1 billion from 391 casinos in the year-earlier period. That compared with revenue growth of 5% and 10% in the previous two years.
Adam Leaders, a Chicago manager of rock and hip-hop bands who gambles a few times a month, took several trips to Las Vegas last year, playing blackjack at big casinos such as the Venetian and Bellagio and wagering about $300 a hand. This year, Mr. Leaders has stayed closer to home, going to casinos in Illinois and neighboring Indiana, and has downgraded to tables with a $5 or $10 minimum wager. "It feels less risky," he said.
With fewer gamblers and smaller wagers, casinos are installing cheaper games and using more enticements such as free buffets and concerts to get people in the door. At the Horseshoe Casino Hammond near Chicago, the casino recently replaced nickel, quarter and dollar slots with 250 penny slot machines, said Rick Mazer, a regional president for Harrah's Horseshoe Casinos. The casino plans to rotate in an additional 250 penny slots by the end of the year.
"People are afraid," said Mr. Mazer. "They're concerned about their retirement and their portfolio. Even though sometimes their income hasn't changed, their wealth in their mind has changed."
Still, even if gambling revenues aren't as much as hoped, they can help when budgets are being cut.
In Chester, Pa., gambling revenue has allowed the city to balance its budget and set up a rainy-day fund. This fiscal year about 30% of the city's $41.2 million budget will come from the slot machines at the Harrah's Chester casino and racetrack, roughly equal to the city's police budget.
"Without Harrah's the city would be in a dire financial situation," said Thomas Moore, chief of staff to Chester Mayor Wendell N. Butler Jr.
Lawmakers in at least 14 states have considered expanding gambling as an alternative to raising property or income taxes, according to the National Conference of State Legislatures.
One growth area has been in "racinos," or slot machines and other games that are installed at race tracks. Five of a sample of nine states with racinos saw revenue increase in the fiscal year ended June, according to the Rockefeller Institute.
In Pennsylvania, where gambling-tax revenue has risen as the state added slot machines over the past year, state representative Bill DeWeese recently introduced a proposal to add table games such as blackjack and craps to the state's slots-only locations.
With a $3 billion budget deficit and many legislators resisting calls to raise taxes, Mr. DeWeese says gambling is one of the few areas that can be tapped. "It would be a substantial amount of help to our state in this very challenging moment," he says. "There's no difference, in my view, in putting $20 in a slot machine and putting $20 on a blackjack table."
But with gambling revenue falling, Nevada -- the state with the freest gambling laws -- is taking a different tack. To close their budget gap this year, Nevada legislators voted to increase sales and payroll taxes."
As far as OG:
1.States need the revenues-a general and obvious statement!
2.Casinos (Harrah's et al) obviously do not want any further off-shore competition. States might but as B.F.'s plan (obviously preliminary) currently stands offshores are not eligible to be regulated and/or licensed unless they have been paying UNCLE SAM and iirc all state taxes, LOLOL!!.....will be interesting with so many dynamics at play!!
3.Sidenote:Federal control versus State control is currently, well I dunno, but does anybody yet?
States End Up Losers in Gambling Pullback
Consumers' Timid Betting Leads to Drop in Income From Commercial Casinos and Lotteries, Exacerbating Budget Deficits
AUGUST 10, 2009
By CONOR DOUGHERTY
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"States' revenue from casinos, slot machines and lotteries is falling for the first time in many of the 48 states that have grown to depend on gambling as a crucial source of income.
Revenue contributed by commercial casinos to state and local governments was down 2.2% in 2008, to $5.7 billion, according to the American Gaming Association, an industry trade group. In many states, the declines have continued.
Eight of the 12 states that allow commercial casinos saw their take of gambling revenue fall in the fiscal year ended June of this year, compared with the same period a year ago, according to data from states and the Nelson A. Rockefeller Institute of Government at the State University of New York.
In five of those states, including Illinois and Nevada, gambling income fell by a greater percentage than the state's overall revenue did. Nevada's gambling-tax revenue fell 15% in the fiscal year ended June compared with the same period a year earlier. That contributed to a drop of 10% in the state's overall revenue.
Many lotteries also are hurting. In a sampling of 20 state lotteries, including California and Illinois, 14 had year-over-year drops in revenue for the fiscal year ended in June, according to Rockefeller Institute.
It is a harsh reversal for states that had come to count on the gambling industry's rapid expansion to provide steady revenue growth. States saw total gambling revenue including casino games, lotteries and horse-racing wagers rise 65% from fiscal year 1998 to $23.9 billion in 2008. Overall state revenue over the same period grew to $774 billion, up 65%.
But now, the weak economy and rising unemployment are combining with heavier competition among casinos to shrink the number of gamblers and the size of their wagers. The declining gambling revenue adds to falling sales- and income-tax receipts that have forced states to slash spending as they try to balance budgets.
"Gambling revenues are declining across the board, and states can no longer count on gambling when it comes to closing budget gaps," said Lucy Dadayan, a senior policy analyst at the Rockefeller institute.
States' dependence on gambling income varies widely. In Nevada, home to the nation's gambling capital of Las Vegas, about 30% of the state's general fund comes from gambling; in Delaware, it is about 8%. Utah and Hawaii are the only two states without some form of legal gambling.
In general, though, gambling income -- including state lottery-ticket profits and taxes on commercial gambling revenue -- has made up a growing share of state budgets. Though each state has its own way of collecting and distributing the money, gambling revenue has helped states fund expanding budgets, education, and to lower other taxes that have a broader consumer impact, such as property taxes.
But with consumers paring back spending, U.S. commercial casinos saw gambling revenue slump 5% to about $33 billion in 2008 compared with 2007, according to the gaming association. The figure doesn't include American Indian casinos.
Some states that are aggressively expanding their gambling operations continue to record revenue gains. But the proliferation of new casinos and slot machines has thinned profits as gamblers' shrinking dollars are spread across more options.
Thanks to thousands of new slot machines, Indiana saw higher overall gambling revenue in the fiscal year ended June 2009, but the take was down at casinos that had been open at least a year. New Jersey, the home of Atlantic City and the second-largest gambling state, after Nevada, has been hit hard by competition from neighboring Pennsylvania, which over the past year has added several thousand slot machines. New Jersey's share of casino revenue fell 14% in the fiscal year ended in June versus a year earlier.
Commercial casinos also are competing with the expanding number of American Indian casinos, which now exist in 28 states. Tribal casinos don't pay taxes, though several states have forged agreements that pay them a share of the casino's revenue.
Revenue at the 405 tribal casinos tracked by the National Indian Gaming Commission grew 2.3% to $26.7 billion in the fiscal year ended September 2008, compared with $26.1 billion from 391 casinos in the year-earlier period. That compared with revenue growth of 5% and 10% in the previous two years.
Adam Leaders, a Chicago manager of rock and hip-hop bands who gambles a few times a month, took several trips to Las Vegas last year, playing blackjack at big casinos such as the Venetian and Bellagio and wagering about $300 a hand. This year, Mr. Leaders has stayed closer to home, going to casinos in Illinois and neighboring Indiana, and has downgraded to tables with a $5 or $10 minimum wager. "It feels less risky," he said.
With fewer gamblers and smaller wagers, casinos are installing cheaper games and using more enticements such as free buffets and concerts to get people in the door. At the Horseshoe Casino Hammond near Chicago, the casino recently replaced nickel, quarter and dollar slots with 250 penny slot machines, said Rick Mazer, a regional president for Harrah's Horseshoe Casinos. The casino plans to rotate in an additional 250 penny slots by the end of the year.
"People are afraid," said Mr. Mazer. "They're concerned about their retirement and their portfolio. Even though sometimes their income hasn't changed, their wealth in their mind has changed."
Still, even if gambling revenues aren't as much as hoped, they can help when budgets are being cut.
In Chester, Pa., gambling revenue has allowed the city to balance its budget and set up a rainy-day fund. This fiscal year about 30% of the city's $41.2 million budget will come from the slot machines at the Harrah's Chester casino and racetrack, roughly equal to the city's police budget.
"Without Harrah's the city would be in a dire financial situation," said Thomas Moore, chief of staff to Chester Mayor Wendell N. Butler Jr.
Lawmakers in at least 14 states have considered expanding gambling as an alternative to raising property or income taxes, according to the National Conference of State Legislatures.
One growth area has been in "racinos," or slot machines and other games that are installed at race tracks. Five of a sample of nine states with racinos saw revenue increase in the fiscal year ended June, according to the Rockefeller Institute.
In Pennsylvania, where gambling-tax revenue has risen as the state added slot machines over the past year, state representative Bill DeWeese recently introduced a proposal to add table games such as blackjack and craps to the state's slots-only locations.
With a $3 billion budget deficit and many legislators resisting calls to raise taxes, Mr. DeWeese says gambling is one of the few areas that can be tapped. "It would be a substantial amount of help to our state in this very challenging moment," he says. "There's no difference, in my view, in putting $20 in a slot machine and putting $20 on a blackjack table."
But with gambling revenue falling, Nevada -- the state with the freest gambling laws -- is taking a different tack. To close their budget gap this year, Nevada legislators voted to increase sales and payroll taxes."
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