Rockefeller Report Showcases Land Gambling Decline – September 25th, 2009

Report released this week by the Nelson A. Rockefeller Institute of Government in the United States reveals that state revenues from licensed and legal gambling enterprises declined by 2.8 percent in fiscal year 2009 compared with the same period last year.

The decrease represents the largest decline in 30 years. “For the First Time, a Smaller Jackpot: Trends in State Revenues From Gambling,” released Monday, illustrates the motivation for states to examine casinos, video lottery terminals, and other gambling operations as potential sources of new revenue, with more than 25 states considering such proposals in the past year.

New gambling activities often provide a quick boost to state revenues, the authors remark, but generally do not keep pace with traditional tax revenues and government expenditures over time. “The historical tendency for revenues from existing gambling operations to grow at a significantly slower pace than other state revenues may hold important lessons for states as policymakers consider further expansion of casinos, racinos, and other gambling activities,” Institute Deputy Director Robert B. Ward and Institute Senior Policy Analyst Lucy Dadayan wrote in the report.

The study found that most states reported lower gambling revenues over the past two years. Among those states that reported increases, such as Pennsylvania and North Carolina, it was noted that these have recently expanded gambling opportunities. Racino revenues fared better in New York than elsewhere, with seven of the eight operations of this type achieving increases in the latest fiscal year.

Statewide, patrons bet $12-billion at racinos. The report reveals that US states generate revenues from four major types of gambling operations: state lotteries, casinos, racinos, and pari-mutuel betting. The largest source, lottery income, fell 2.6 percent nationwide over the last fiscal year, whilst casino revenues declined 8.5 percent and racinos increased 6.7 percent, with new racinos opening in Indiana and Pennsylvania.

Pari-mutuel wagering revenues declined by 14.8 percent in the period to July-March in 2009 compared to the same period last year.