state of the states - american gaming association year marks the aga’s 14th state of the states...

State of the StatesThe AGA Survey of CASino enTerTAinmenT

2012 AGA Survey of CASino entertAinment i

The American Gaming Association (AGA) is pleased to present the 2012 edition of State of the States: The AGA Survey of Casino Entertainment.

When I sat down to write this message for the last three editions of State of the States, the economic impact news that we had to report reflected an industry struggling to overcome the impacts of the recession. This year’s report, however, indicates that, while it may be slow, the recovery of the national commercial casino industry is well underway.

This year marks the AGA’s 14th State of the States report, and just as in previous publications, this year’s book gives readers a comprehensive look at the commercial casino industry. The core of the report is made up of national and state-by-state economic impact data, including gaming revenues, direct gaming tax contributions, employment and wages for the 22 commercial casino states.

In addition to the economic impact data that State of the States readers have come to expect, this year’s report reprises a public opinion poll that we conducted seven years ago — detailing the attitudes and opinions of civic and political leaders in casino jurisdictions. Results reveal that those who know the industry best say that the gaming industry has delivered on its promises to bring jobs, economic development, tax revenue, increased tourism and more to casino communities. Also of note, the majority of those surveyed are quick to point out that the social ills that gaming opponents claim will accompany casinos have never materialized in their communities. Most importantly, those leaders who work every day in commercial casino jurisdictions see the gaming industry as a vital community partner.

This year’s survey also includes polling data on casino visitation and the acceptability of casino gaming and special sections that highlight electronic gaming machines, sports betting and the gaming equipment manufacturing sector. Once again, the Association of Gaming Equipment Manufacturers (AGEM) partnered with the AGA to produce the spotlight on the gaming equipment manufacturing sector, which also is experiencing an economic recovery.

Each year, our aim in producing State of the States is to create a comprehensive resource that outlines the significant impact the commercial casino industry has on national, state and local economies. I am confident that we have achieved our goal and hope that you will find this report to be a useful tool throughout the year, no matter your research needs.

Frank J. Fahrenkopf, Jr.President and CEO American Gaming Association

PreSident’S MeSSage

ii 2012 AGA Survey of CASino entertAinment

noteSStatistical notesThe American Gaming Association (AGA) represents the commercial casino industry; this survey strives to give the reader a detailed picture of that particular segment of the gaming industry.

For the purposes of this survey, the AGA defines “commercial casinos” as land-based, riverboat, dockside and racetrack casinos.

It should be noted that, in most cases, effective tax rates are higher at racetrack casino facilities where gaming machines are operated by the state lottery as opposed to the more traditional regulatory structure in which gaming licensees are the owners and operators of the machines. In the case of the former, the gaming machines are called video lottery terminals (VLTs), and the lottery commission takes in all revenues before making distributions to stakeholders such as track owners, breeders and others. States that operate in this manner include Delaware, Maryland, New York, Rhode Island and West Virginia. Because of this important difference in the regulatory structure in these states, the survey continues to detail the percentage of revenue retained by operators as opposed to state gaming tax rate. The percentage of revenues retained by operators should in no way be interpreted as profit margin. These are revenues earned before paying other non-gaming taxes, employee salaries as well as a host of other operating expenses.

Eight other states — Florida, Indiana, Iowa, Louisiana, Maine, New Mexico, Oklahoma and Pennsylvania — operate and tax their gaming machines at pari-mutuel facilities more similarly to traditional casino states. That is, regulations allow operators to earn gross revenues before requiring

those operators to pay out taxes and supplements to purses at the tracks, among other things. One exception is Maine, where the state levies a 1 percent tax on handle, the industry term for total amount wagered, before taxing net revenue as well. For these states, the individual state sections detail state gaming tax rates, not revenue retained by the operator.

Finally, for the second year, this year’s survey attempts to report on employee wage and benefits data in all states with either land-based, riverboat or racetrack casinos. Not all casinos chose to participate in data collection, so the report reflects those figures that the AGA was able to obtain.

As in past years, Native American casinos are noted only in the Casino Locations by Category chart on page 4. The chart and accompanying map include Class III locations, which are compacted (state-negotiated), Las Vegas-style casinos, as well as Class II locations, which are non-compacted casinos offering bingo and/or electronic bingo devices.

State visitation figures reported in the State-by-State Economic Impact section will not equal the total visitor figure reported in the Casino Visitation section on page 28 because most riverboat states have controlled access and, therefore, count individual visits (each time a patron enters a casino), while land-based casinos count total visitors (who may enter casinos multiple times during a single visit).

Unless otherwise noted, all statistics in this survey are for calendar year 2011.

Polling notesFigures reported in the polling data may not add up to 100 percent because of rounding.

2012 AGA Survey of CASino entertAinment 1

table of ContentSexecutive Summary ............................................................................................................................. 2

national economic impact of Casino entertainment .................................................................. 4

ageM Spotlight on gaming equipment Manufacturers .............................................................. 9

State-by-State economic impact: Commercial Casinos ...........................................................11Colorado .................................................................................................................................................... 12Delaware .................................................................................................................................................... 12Florida ........................................................................................................................................................ 13Illinois ........................................................................................................................................................ 13Indiana ....................................................................................................................................................... 14Iowa ........................................................................................................................................................... 14Kansas ....................................................................................................................................................... 15Louisiana ................................................................................................................................................... 15Maine ......................................................................................................................................................... 16Maryland ................................................................................................................................................... 16Michigan .................................................................................................................................................... 17Mississippi ................................................................................................................................................. 17Missouri ..................................................................................................................................................... 18Nevada ....................................................................................................................................................... 18New Jersey ................................................................................................................................................ 19New Mexico .............................................................................................................................................. 19New York ................................................................................................................................................... 20Oklahoma .................................................................................................................................................. 20Pennsylvania ............................................................................................................................................. 21Rhode Island ............................................................................................................................................. 21South Dakota ............................................................................................................................................. 22West Virginia ............................................................................................................................................. 22

the impacts of Casinos: Community leaders Weigh in ..........................................................23

Casino Visitation .................................................................................................................................28

Spotlight on gaming Machines .......................................................................................................32

Spotlight on Sports betting .............................................................................................................33

budgeting for the Casino experience ...........................................................................................34

american Perceptions of Casino entertainment .......................................................................35

appendix ................................................................................................................................................36Glossary of Gaming Terms ...............................................................................................36Index of Charts .................................................................................................................37Methodology ....................................................................................................................38Acknowledgements ..........................................................................................................39

2 2012 AGA Survey of CASino entertAinment

exeCutiVe SuMMarynational economic impact of Casino entertainmentThe past few years have been difficult ones for the gaming industry, but 2011 national economic impact figures give reasons for optimism and show that the slow and steady recovery of the commercial casino industry is well underway. In 2011, commercial casino revenues reached $35.64 billion, which was an increase of 3.0 percent compared with 2010 figures. Commercial casinos returned $7.93 billion of those revenues to states and localities in the form of direct gaming taxes — a 4.5 percent increase over 2010 totals. The gaming industry also continued to be a significant source of employment, providing jobs for 339,098 people who earned $12.9 billion in wages, benefits and tips during 2011.

Fifteen states saw their gross gaming revenues increase in 2011, with the largest increases coming from states where new casinos opened during 2011 or had a full year of operations for the first time, including Maryland (+464.2 percent), Kansas (+28.3 percent) and New York (+15.6 percent). A full year of operations at Sugar House Casino in Philadelphia and a full year of table game operations statewide helped drive Pennsylvania’s 21.3 percent increase in gaming revenue.

Thirteen of 22 states had increases in gaming tax contributions as well. In Maryland, the addition of a second casino and the first full year of operations at the first drove a 464.2 percent increase. New casinos in Kansas and New York led to increases of 38.0 percent and 17.9 percent, respectively.

New properties also generated significant jumps in employment in several states in 2011. New York’s 46.7 percent jump in gaming employment was driven by the debut of Resorts World New York in Queens, and Illinois’ 14.8 percent increase can be attributed to the Rivers Casino in Des Plaines, Ill.

Despite overall growth in national economic impact figures, some states did see declines in gaming revenue, direct gaming tax receipts and employment during 2011. New Jersey, due in part to increased regional competition from a full year of table game operations in Delaware and Pennsylvania, experienced the largest declines in both gaming (-7.0 percent) and tax (-9.1 percent) revenue. Delaware experienced the largest drop in employment with a 15.9 percent decline.

gaming equipment Manufacturing and gaming MachinesAfter two years of contraction, the gaming equipment manufacturing sector posted gains in revenue, employment and wages during 2011. With continued expansion of gaming across the country and throughout the world, gaming-related suppliers and manufacturers rebounded, supporting tens of thousands of jobs and billions of dollars in salaries and wages. Research and analysis conducted by Nevada-based Applied Analysis on behalf of the Association of Gaming Equipment Manufacturers (AGEM) demonstrates the impact of the supplier side of the gaming industry. Direct output (revenue) sourced to the industry was $12.3 billion during 2011, which represents a robust 7.0 percent increase compared to 2010 figures.

Increased demand for gaming equipment also translated into increased employment. Direct jobs sourced to the equipment manufacturing sector totaled 30,300, a 3.2 percent increase compared to 2010 figures, and wages within the sector increased by 4.8 percent, reaching a total of $2.2 billion. The average wage reached approximately $72,200, which is significantly higher than the United States median income of $45,230 (Bureau of Labor Statistics). Indirect impacts, or those attributable to part suppliers or other supporting businesses, provided additional output, wages and employment.

In addition to providing relatively high wages, the sector provides significant benefits to its employees. Based on a survey of AGEM members, more than three-quarters (76.3 percent) of gaming equipment manufacturers provide employer-sponsored health care plans to at least 75 percent of their employees.

In addition to the positive economic performances reported by the industry in 2011, on overwhelming majority (86.8 percent) of surveyed AGEM members expect market conditions to improve during the next 12 months, the highest percentage of respondents expecting improvement since the survey was first taken prior to the recession.

Public opinion polling reveals that more than half (53 percent) of casino visitors list slot machines and video poker as their favorite casino games. Currently, there are more than 837,000 gaming machines in 39 states nationwide, with Nevada (183,319), California (67,601) and Oklahoma (65,400) being home to the


largest numbers of machines. Of the 13 commercial casino states with table games and slot machines where a full year of data is available, each received at least 63 percent of their overall gaming revenue from slot machines in 2011. Iowa and South Dakota get the largest portion of their gaming revenue from slot machines with 91.2 percent, while Nevada (63.0 percent) gets the smallest percentage of its gaming revenues from slot machines.

SPeCial SeCtion: the impacts of Casinos: Community leaders Weigh inCasinos are an important part of the economic and entertainment mix in hundreds of jurisdictions across the country, and according to the results of a new survey, the elected officials and community leaders that call those cities and towns home view the gaming industry and the positive impact casinos have had on their communities in an overwhelmingly favorable light.

The study, conducted by VP Communications, Inc., in conjunction with national pollster Peter D. Hart, polled 210 elected officials and civic leaders from casino counties in commercial casino states, excluding Nevada. Elected officials included state representatives and senators, mayors, city and county council members, aldermen, members of boards of supervisors, and county commissioners and executives. Civic leaders include school superintendents, chamber of commerce presidents, fire or police chiefs, district attorneys, city or county managers and others. Almost three-quarters (73 percent) of participants have spent at least five years in their current position, and three out of 10 (30 percent) have spent more than 15. More than three-quarters (78 percent) have lived in their areas for more than 20 years.

According to the surveyed community leaders, casinos have more than delivered on their promises of jobs, economic development and tax revenues, and those benefits can be felt throughout their communities. In fact, more than four out of five (83 percent) community leaders say that the introduction of casinos has met or exceeded their expectations, and the same overwhelming majority (83 percent) says that the overall impact of casinos has been positive. Additionally, more than three-quarters (76 percent) of community leaders say that casinos have done more to help than hurt other area businesses, and nearly three-quarters (74 percent) of those responding think that casinos are good corporate citizens.

In addition to the jobs and economic development created by casinos, tax receipts are another tangible benefit. More than seven out of 10 (71 percent) respondents say casinos generate a net tax increase, and well more than half (57 percent) say casino tax revenues have allowed their communities to avoid cutting key programs or start new projects that would not have been possible otherwise.

Perhaps the most telling result is that when everything is taken into account, more than three-quarters (76 percent) of community leaders surveyed would choose to vote “yes” if given the chance to go back and cast the deciding vote to allow casinos in their communities.

Casino Visitation and the Customer experienceAccording to public opinion research conducted by VP Communications, Inc. and national pollster Peter D. Hart, more than one-quarter (27 percent) of the U.S. adult population visited a casino during 2011, totaling approximately 59.7 million people. Only the lottery was a more popular form of gambling than visiting a casino.

Activities other than gambling have become an integral part of the casino experience during the past decade, and public opinion polling bears this out. During their recent casino visits, more than three-quarters (76 percent) of casino-goers ate in a fine dining restaurant, 62 percent saw a show or concert and more than half (51 percent) visited a bar or nightclub. More than one-quarter (27 percent) of casino visitors say they never or rarely gamble in casinos.

Casino visitors view their trips positively, as three-quarters (75 percent) say visiting a casino is an excellent, very good or good value for the money when compared to other entertainment options.

american Perceptions of Casino entertainmentAccording to 2012 public opinion polling, 81 percent of Americans view casino gaming as acceptable for themselves or others, which is in line with survey results during the past decade. The poll also shows that Americans recognize the importance of the casino industry to U.S. travel and tourism, as three out of five (60 percent) survey respondents say the casino industry is very or somewhat important to the overall travel industry.

executive Summary Continued


national eConoMiC iMPaCt of CaSino entertainMent

1 In Rhode Island, there are video lottery terminals operating at a closed jai alai fronton, not considered a racetrack casino, but a pari-mutuel facility.

2 The states with racetrack casinos operate Class III gaming machines. There are two racinos in Alabama — not indicated on this map — that have Class II machines only, which are legal only in the counties where they operate.

3 Native American casinos noted here include both Class II and Class III facilities. States with Class II gaming are Alabama, Alaska, Nebraska and Texas.

4 The states with card rooms indicated here do not include states that have commercial casinos with poker facilities.

5 The card rooms in Washington operate blackjack and other house- or player-banked card games in addition to poker.

6 The electronic gaming devices operating in the states indicated on this map are recognized as legal operations. There are some states with similar facilities, but the machines may not be authorized.

Sources: American Gaming Association, National Indian Gaming Commission, State Gaming Regulatory Agencies

Casinos per State (as of Dec. 31, 2011)

* Class II games onlyº Limited-stakes gamingnVideo lottery terminals1 Refers to number of non-casino locations in states where electronic gaming devices are present

2 Number during FY 20113 Locations have 15 or fewer machines

Sources: American Gaming Association, National Indian Gaming Commission, State Gaming Regulatory Agencies

1

Casino locations by Category

in 2011, u.S. commercial casinos:

•Employed339,098people

•Paidwagesof$12.9billion

•Contributed$7.93billionindirectgamingtaxes

•Earned$35.64billioningrossgamingrevenue

STATE Alabama 3 * Alaska 2 * Arizona 25 California 70 89 Colorado 40 º 2 Connecticut 2 Delaware 3 n Florida 5 8 24 Idaho 8 Illinois 10 Indiana 11 2 Iowa 15 3 1 Kansas 2 4 Louisiana 14 4 3 2,159 Maine 1 Maryland 1 n 1 n Michigan 3 24 Minnesota 38 2 Mississippi 30 3 Missouri 12 1 Montana 13 288 2 1,549 2

Nebraska 6 * Nevada 256 2 3 2,010 3 New Jersey 11 New Mexico 5 22 New York 9 n 7 North Carolina 2 North Dakota 10 Oklahoma 2 114 Oregon 9 2,323 n

Pennsylvania 4 6 Rhode Island 2 n South Dakota 35 º 11 1,498 2

Texas 1 * Washington 34 1142 West Virginia 1 4 n 1,552 n

Wisconsin 29 Wyoming 4 Total 445 47 459 517 11,091 Number of States 15 13 29 5 6


national economic impact of Casino entertainment Continued

u.S. Consumer Spending on Commercial Casino gaming, 2002-2011

20

25

30

35

200720022001 2003 2004 2005 20062000

$30.74

$26.50

$24.50

$28.93

$27.02

$30.37

$32.42

$34.13

$25.70

$ Billions$32.54

$26.5$24.5

$28.93

$27.02

$30.37

$32.42

$34.13

$25.7

$ Billions

$32.54

2008 2009

20072002 2003 2004 2005 2006 2008 2009 2010

25

30

35

40

201125

30

35

40

$34.60

$28.72

$32.77

$31.17

$35.27

$37.52

$36.22

$28.07

$34.28

$35.64

Commercial Casinos

Sources: State Gaming Regulatory Agencies

Compared with figures from 2010, total consumer spending at commercial casinos increased by 3.0 percent in 2011. This is a positive sign that the industry’s long, slow recovery is well underway. As the economy continues to improve, gaming revenues, which are dependent on consumer spending, should continue to rise.

national eConoMiC iMPaCt of CaSino entertainMent

State-by-State Consumer Spending on Casino gaming, 2010 vs. 2011 STATE 2010 2011 % ChAngE

Colorado $759.61 million $750.11 million -1.3%Delaware $571.38 million $552.37 million -3.3%Florida $329.12 million $381.72 million +16.0%Illinois $1.37 billion $1.48 billion +8.0%Indiana $2.79 billion $2.72 billion -2.5%Iowa $1.37 billion $1.42 billion +3.7%Kansas $37.79 million $48.48 million +28.3%Louisiana $2.37 billion $2.37 billion +0.0%Maine $61.67 million $59.45 million -3.6%Maryland $27.60 million $155.71 million +464.2%Michigan $1.38 billion $1.42 billion +2.9%Mississippi $2.39 billion $2.24 billion -6.3%Missouri $1.79 billion $1.81 billion +1.1%Nevada $10.40 billion $10.70 billion +2.9%New Jersey $3.57 billion $3.32 billion -7.0%New Mexico $247.35 million $248.92 million +0.6%New York $1.09 billion $1.26 billion +15.6%Oklahoma $99.88 million $106.23 million +6.4%Pennsylvania $2.49 billion $3.02 billion +21.3%Rhode Island $477.05 million $512.86 million +7.5%South Dakota $106.19 million $100.90 million -5.0%West Virginia $877.65 million $958.70 million +9.2%

Source: State Gaming Regulatory Agencies

State-level data on consumer spending at commercial casinos clearly illustrates the slow but steady economic recovery is affecting some states differently than others. Fifteen states saw their gross gaming revenues increase in 2011. The largest increases came from states where new casinos opened during 2011 or had a full year of operations for the first time — Maryland (+464.2 percent), Kansas (+28.3 percent), Pennsylvania (+21.3 percent) and New York (+15.6 percent). New Jersey (-7.0 percent) and Mississippi (-6.3 percent) experienced the largest revenue decreases. More specifics on each state can be found in the state-by-state economic impact section on pages 11-22.


Commercial Casino Spending vs. other Spending Choices, 2011

0

50

100

150

200

250

300

$35.65

$186.4

1. Commercial Casinos

2. Consumer Electronics

3. Cable Television

4. Outdoor Equipment

5. U.S. Box Office Receipts

6. U.S. Music Revenue $7.0

$10.2

$11.0

$97.6

0 50 100 150 200

$ Billions

Sources: 1-American Gaming Association; 2- Consumer Electronics Association; 3- National Cable and Telecommunications Association; 4-Outdoor Industry Association; 5-Boxofficemojo.com; 6-Recording Industry Association of America

During 2011, consumers spent more at commercial casinos than they did on music, movies and outdoor equipment combined, but spending on casino gambling was significantly less than spending on cable television and consumer electronics.

Commercial Casino tax revenue by State, 2010 vs. 2011 STATE 2010 2011 % ChAngE

Colorado $107.02 million $102.17 million -4.5%Delaware $243.12 million $230.16 million -5.3%Florida $153.33 million1 $143.60 million -6.4%Illinois $466.07 million $489.42 million +5.0%Indiana $874.86 million $846.37 million -3.3%Iowa $305.44 million $321.53 million +5.3%Kansas $9.48 million $13.08 million +38.0%Louisiana $571.96 million $573.19 million +0.2%Maine $30.16 million $29.06 million -3.7%Maryland $15.87 million $89.53 million +464.2% Michigan $311.41 million $320.67 million +3.0%Mississippi $285.47 million $274.42 million -3.9%Missouri $486.06 million $484.83 million -0.3%Nevada $835.42 million $865.25 million +3.6%New Jersey $305.50 million $277.60 million -9.1%New Mexico $64.31 million $64.72 million +0.6%New York $503.48 million $593.40 million +17.9%Oklahoma $16.55 million $18.30 million +10.6%Pennsylvania $1.328 billion $1.456 billion +9.6%Rhode Island $296.30 million2 $308.71 million3 +4.2%South Dakota $17.22 million $16.36 million -5.0%West Virginia $378.49 million1 $406.46 million +6.4%

1Data changed from what was reported in 2011 State of the States. 2FY 2010 Source: State Gaming Regulatory Agencies3FY 2011

During 2011, commercial casinos contributed a total of $7.93 billion in direct gaming taxes to states and localities nationwide — a 4.5 percent increase compared to 2010. Thirteen of 22 states had increases in gaming tax revenue. In Maryland, the addition of a second casino and the first full year of operations at the first drove a 464.2 percent increase. New casinos in Kansas and New York were the reasons behind those states’ increases of 38.0 percent and 17.9 percent, respectively. New Jersey (-9.1 percent) experienced the steepest drop in tax receipts. More specifics on each state can be found in the state-by-state economic impact section on pages 11-22.



Commercial Casino Jobs by State, 2010 vs. 2011

0

1-10,000

10,001-20,000

20,001-30,000

30,001-40,000

150,000+

N/A

*One or more properties from these states declined to participate in data gathering; see state-by-state data charts for more information. 1Figure for locations with gross gaming revenue in excess of $1 million for FY 2010.2Figure for locations with gross gaming revenue in excess of $1 million for FY 2011. 32010 data was used for one or more properties that did not provide 2011 data. 4FY 20105FY 20116CY 20097CY 2010

Sources: State Gaming Regulatory Agencies, State Gaming Associations, Individual Properties

During 2011, commercial casino employment declined slightly (-0.4 percent). New properties helped to drive significant employment increases compared to 2010 figures in states like New York (+46.7 percent), Illinois (+14.8 percent) and Iowa (+5.3 percent). Oklahoma also experienced a jump in employment with a 17.5 percent increase compared to 2010 figures. For more specifics on each state, see the state-by-state economic impact section on pages 11-22.

Commercial Casino Wages, 2002-2011$ Billions

9

12

15

$11.8

$11.0

$12.2$12.6

$13.3

$13.8

$13.1

$14.1

2002 20112003 2004 2005 2006 2007 2008 2009 2010

9

12

15

$12.9

$13.3

Based on data available from participating properties, during 2011, commercial casino employees earned $12.9 billion in wages, benefits and tips — a 3.0 percent decline compared to 2010 figures.

Sources: State Gaming Regulatory Agencies, Individual Properties


STATE 2010 2011 % ChAngENevada 175,024 174,381 -0.4%New Jersey 34,145 32,823 -3.9%Mississippi 24,707 23,721 -4.0%Louisiana 16,873 17,207 +2.0%Indiana* 14,144 14,079 -0.5%Pennsylvania* 12,664 13,050 +3.0%Missouri 11,071 10,435 -5.7%Iowa 8,915 9,384 +5.3%Colorado 9,589 9,263 -3.4%Illinois 6,892 7,911 +14.8%Michigan 8,067 7,303 -9.5%New York 3,465 5,082 +46.7%West Virginia* 4,528 4,475 -1.2%Delaware* 3,245 2,730 -15.9%Florida* 2,533 2,601 +2.7%South Dakota 1,512 1,647 +8.9% New Mexico* 1,423 1,447 +1.7%Oklahoma 770 905 +17.5%Maine 385 364 -5.5%Maryland* 309 290 -6.1%Kansas* 303 N/A N/ARhode Island* NA N/A N/ATotal 340,564 339,098 -0.4%

1

4

6

2

3

5

3

3

7

3


top 10 u.S. racetrack Casino Markets, 2011

1. Philadelphia, Pa. $842.12 million2. Yonkers, N.Y. $577.07 million3. Charles Town, W.V. $541.93 million4. Providence, R.I. $462.15 million5. Indianapolis, Ind. $454.57 million6. Dade County, Fla. $381.72 million7. Dover/Harrington, Del. $323.70 million8. Grantville, Pa. $287.34 million9. Meadow Lands, Pa. $282.86 million10. Wilkes-Barre, Pa. $274.84 million

Source: The Innovation Group

Philadelphia, Pa. and Yonkers, N.Y. remained the largest racetrack casino markets in the U.S., and there were no new additions to the top 10 list in 2011.

Top 20 U.S. Casino Markets

Top 10 U.S. Racetrack Casino Markets

top u.S. Casino Markets, 2011

1. Las Vegas Strip, Nev. $6.069 billion2. Atlantic City, N.J. $3.318 billion3. Chicagoland, Ill./Ind. $1.934 billion4. Detroit, Mich. $1.424 billion 5. Connecticut $1.346 billion6. St. Louis, Mo./Ill. $1.114 billion7. Philadelphia, Pa. $1.090 billion8. Biloxi, Miss. $824.82 million9. Tunica/Lula, Miss. $817.09 million10. Boulder Strip, Nev. $778.89 million


The first full year of operations at Sugarhouse Casino and the first full year of table games helped Philadelphia, Pa. jump from the ninth-largest market in 2010 to the seventh-largest market in 2011. Detroit, Mich. also rose in the rankings this year, moving to fourth after ranking fifth during 2010.

11. Kansas City, Mo. (includes St. Joseph) $741.39 million12. Shreveport, La. $732.67 million13. Lake Charles, La. $672.62 million14. Reno/Sparks, Nev. $663.28 million15. New Orleans, La. $631.16 million16. Pittsburgh/Meadow Lands, Pa. $626.01 million17. Lawrenceburg/Rising Sun/Belterra, Ind. $625.37 million18. Black Hawk, Colo. $618.70 million19. Yonkers, N.Y. $577.07 million20. Charles Town, W.V. $541.93 million

top 20 u.S. Casino Markets, 2011



After two years of contraction, the gaming equipment manufacturing sector posted gains in revenue, employment and

wages during 2011. With continued expansion of gaming throughout the world, gaming-related suppliers and manufacturers rebounded, supporting tens of thousands of jobs and billions of dollars in salaries and wages. Research and analysis conducted by Nevada-based Applied Analysis on behalf of the Association of Gaming Equipment Manufacturers (AGEM) demonstrates the impact of the supplier side of the gaming industry. Direct output (revenue) sourced to the industry was $12.3 billion during 2011, which represents a robust 7.0 percent increase compared to 2010 figures.

Increased demand for gaming equipment also translated into increased employment. Direct jobs sourced to the equipment manufacturing sector totaled 30,300, a 3.2 percent increase compared to 2010, and wages within the sector increased by 4.8 percent, reaching a total of $2.2 billion. The average wage reached approximately $72,200, which is significantly higher than the United States median income of $45,230 (Bureau of Labor Statistics). Indirect impacts, or those attributable to parts suppliers or other supporting businesses, provided additional output, wages and employment.

In addition to the sector’s relatively high wages, it provides significant benefits to its employees. Based on a survey of AGEM members, more than three-quarters (76.3 percent) of gaming equipment manufacturers provide employer-sponsored health care plans to at least 75 percent of their employees.

In addition to the positive economic performances reported by the industry in 2011, an overwhelming majority (86.8 percent) of surveyed AGEM members expect market conditions to improve during the next 12 months, which is the highest percentage of respondents expecting improvement since the survey was first taken prior to the recession.

gaming equipment Manufacturing economic output, 2006-2011

$6.17

0

10

20

30

40

50

2007

$ Billions

2006 2008

0

5

10

15

20

25 Direct

Indirect

20072005

$ Billions

2006 20080

5

10

15

20

25Direct

Indirect

$8.0$9.4

$11.9$12.7

$7.5$8.8

$11.2$11.9

$ Billions

2009 2010

Direct Indirect

0

10

20

30

0

10

20

30

40

50

$9.4$11.9 $12.7

$8.8

$11.2$11.9

$12.1

$11.4

$11.5

$10.8

$12.3

$11.6

2011

Source: Association of Gaming Equipment Manufacturers (AGEM)

Direct economic output sourced to gaming equipment manufacturing increased by 7.0 percent in 2011 to $12.3 billion. Direct and indirect output combined reached $23.9 billion, representing an increase of 7.2 percent compared to 2010 figures.

gaming equipment Manufacturing employment, 2006-2011

0

20,000

40,000

60,000

0

10

20

30

40

50

0

20000

40000

60000

80000

100000

120000

0

20000

40000

60000

80000

100000

120000

30,300

19,800 20,500

29,600

22,100

27,200 28,200

21,600

30,000

21,800

Direct Indirect

29,400

21,400

2007 20112006 2008 2009 2010

Employees


Direct employment within the industry rose to 30,300 in 2011, a 3.1 percent increase compared to 2010 figures. When combined with indirect positions, employment sourced to the industry reached 52,400 — a 3.2 percent gain compared to 2010 totals.

gaming equipment Manufacturing Salaries and Wages, 2006-2011

2007 20112006 2008 2009

Direct Indirect$Billions

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

6.0

6.5

7.0

7.5

8.0

20100.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

$1.8 $1.9 $2.0

$1.2$1.3

$1.4

$2.1

$1.4

$2.1

$1.4

$2.2

$1.5


Salary and wage payments to employees in the gaming equipment manufacturing sector totaled $2.2 billion in 2011, a 4.8 percent increase compared to 2010 figures. When combined with indirect wage impacts, salaries and wages reached $3.7 billion.

gaMing eQuiPMent ManufaCturerSSPotlight on


gaming equipment Manufacturers with employees Covered by employer-sponsored health Care Plans

0

10

20

30

40

50

60

70

80

7.9%

Less than 50% of employees

50% to 75% of employees

More than 75% of employees

15.8%

76.3%

0

20000

40000

60000

80000

100000

120000


Every surveyed gaming equipment manufacturer reports providing employer-sponsored health care plans to its employees, and more than three out of four (76.3 percent) offer health care to more than 75 percent of their employees.

historical trend in expectations of Market improvement for the next 12 Months

8.4% 10.7%

73.7%

0

20000

40000

60000

80000

100000

1200000

20

40

60

80

100

75.0%

86.8%

2007 2008 2009 20112010Source: Association of Gaming Equipment Manufacturers (AGEM)

The trend in market expectations suggests increasing demand and economic activity may prevail going forward. Based on gaming equipment manufacturer surveys, the next 12 months are expected to experience the highest level of market improvement, a sharp contrast to expectations reported in 2007 and 2008.

Purchases Made from local Vendors by gaming equipment Manufacturers

18.4%

1% to 10%

11% to 25%

26% to 50%

More than 50%

28.9% 28.9%

0

20000

40000

60000

80000

100000

1200000

5

10

15

20

25

30

23.7%


All surveyed gaming equipment manufacturers make purchases from local vendors. Almost three out of 10 (28.9 percent) purchase more than 50 percent of their supplies from local businesses, while nearly one-quarter (23.7 percent) make between 25 and 50 percent of their purchases locally.

gaming equipment Manufacturers’ Market expectations for the next 12 Months

Worsen

Stay About the Same

Improve

0

20

40

60

80

100

5.3%7.9%

86.8%


Gaming equipment manufacturers are generally optimistic that the market for gaming equipment will continue its recovery, as a strong majority (86.8 percent) of those surveyed expects market conditions to improve during the next 12 months.

ageM Spotlight on gaming equipment Manufacturers Continued


State-by-State eConoMiC iMPaCt: CoMMerCial CaSinoSThe past few years have been difficult ones for the gaming industry, but 2011 national economic impact

figures give reasons for optimism and show that the slow and steady recovery of the commercial casino industry is well underway. In 2011, commercial casino revenues reached $35.64 billion, which was an increase of 3.0 percent compared with 2010 figures. Commercial casinos returned $7.93 billion of those revenues to states and localities in the form of direct gaming taxes — a 4.5 percent increase over 2010 totals. The gaming industry also continued to be a significant source of employment, providing jobs for 339,098 people who earned $12.9 billion in wages, benefits and tips during 2011.

Fifteen states saw their gross gaming revenues increase in 2011, with the largest increases coming from states where new casinos opened during 2011 or had a full year of operations for the first time, including Maryland (+464.2 percent), Kansas (+28.3 percent) and New York (+15.6 percent). A full year of operations at Sugar House Casino in Philadelphia and a full year of table game operations statewide helped drive Pennsylvania’s 21.3 percent increase in gaming revenue.

Thirteen of 22 states had increases in gaming tax contributions as well. In Maryland, the addition of a second casino and the first full year of operations at the first drove a 464.2 percent increase. New casinos in Kansas and New York led to increases of 38.0 percent and 17.9 percent, respectively.

New properties also generated significant jumps in employment in several states in 2011. New York’s 46.7 percent jump in gaming employment was driven by the debut of Resorts World New York in Queens, and Illinois’ 14.8 percent increase can be attributed to the Rivers Casino in Des Plaines, Ill.

Despite overall growth in national economic impact figures, some states did see declines in gaming revenue, direct gaming tax receipts and employment during 2011. New Jersey, due in part to increased regional competition from a full year of table game operations in Delaware and Pennsylvania, experienced the largest declines in both gaming (-7.0 percent) and tax (-9.1 percent) revenue. Delaware experienced the largest drop in employment with a 15.9 percent decline.

The following tables give the most complete picture available of each of the 22 commercial casino states’ economic impacts, including gross gaming and gaming tax revenue, employment and wages.


delaWareCurrent # of operating Casinos 3Casino format Racetrack casinos with publicly run video lottery terminals and table games with distributions to operatorsCasino employees 2,730Casino employee Wages $124.59 million (includes tips and benefits)gross Casino gaming revenue $552.37 milliongaming tax revenue $230.16 millionhow taxes Spent General fundlegalization date 1994first Casino opening date 1995revenue retained by operator 43.89%Mode of legalization Legislative actionVisitor Volume Data not availableNote: Delaware wage and employment data includes two of three properties, as one declined to participate in the data collection.

Sources: Delaware Lottery, individual properties

Dover

Wilmington

Harrington

ColoradoCurrent # of operating Casinos 40Casino format Land-based Casino employees 9,263Casino employee Wages $217.47 million (includes tips and benefits)gross Casino gaming revenue $750.11 milliongaming tax revenue $102.17 millionhow taxes Spent Local communities, historic preservation, community colleges, general fundlegalization date 1990first Casino opening date 1991State gaming tax rate Graduated tax rate with a maximum tax of 20% on gaming revenueMode of legalization Statewide vote, legislative actionVisitor Volume Data not availableSources: Colorado Gaming Association, Colorado Division of Gaming

Central CityBlack Hawk

Cripple Creek

Colorado’s40casinossawtheir2011totalgrossgamingrevenuefiguredecline1.3percentcomparedto2010.Directgamingtaxesinthestateexperiencedadropof4.5percent.

Eventhough2011wasDelaware’sfirstfullyearwithtablegames,regionalcompetitionfromcasinosinMarylandandPennsylvaniadrovea3.3percentdeclineingamingrevenueanda5.3percentdecreaseingamingtaxescomparedto2010figures.

State-by-State economic impact Continued


floridaCurrent # of operating Casinos 5Casino format Racetrack casinos with slot machinesCasino employees 2,601Casino employee Wages $71.79 million (includes tips and benefits)gross Casino gaming revenue $381.72 milliongaming tax revenue $143.60 millionhow taxes Spent Statewide educationlegalization date 2006first Casino opening date 2006State gaming tax rate 35%Mode of legalization Statewide referendum, local option vote, legislative actionVisitor Volume Data not availableNote: Florida wage and employment data includes four of five properties, as one declined to participate in data collection. 2010 data was used for the fourth property because they declined to provide 2011 information.

Sources: Florida Department of Business and Professional Regulation, individual properties

Pompano Beach

Hallandale Beach

Miami

illinoiSCurrent # of operating Casinos 10Casino format RiverboatCasino employees 7,911Casino employee Wages $313.39 million (includes tips and benefits)gross Casino gaming revenue $1.477 billiongaming tax revenue $489.42 millionhow taxes Spent Education assistance, local governmentlegalization date 1990first Casino opening date 1991State gaming tax rate Graduated tax rate from 15% to 50% of gross gaming revenue, $2-3 admissions taxMode of legalization Legislative actionVisitor Volume 14.80 millionSources: Illinois Casino Gaming Association, Illinois Gaming Board

Joliet Aurora

Elgin

Rock Island

E. Peoria

E. St. Louis

Alton

Metropolis

Miami Gardens

Comparedto2010,Florida’scommercialcasinosexperiencedasignificant16.0percentincreaseingamingrevenuein2011,butsince2011wasthefirstfullyearwitha35percentgamingtaxrate,thestatesawtaxreceiptsdropby6.4percentcomparedtothepreviousyear.

TheJulyopeningofIllinois’10thriverboat—TheRiversCasinoinDesPlaines—droveincreasesinbothgamingrevenue(+8.0percent)andtaxreceipts(+5.0percent).EmploymentinIllinoisalsoexperiencedabumpfromthenewcasino,witha14.8percentincreasecomparedwith2010figures.


Des Plaines


ioWaCurrent # of operating Casinos 18 Casino format Riverboat, land-based and racetrack casinos with slots and table gamesCasino employees 9,384Casino employee Wages $337.66 million (includes tips and benefits)gross Casino gaming revenue $1.424 billiongaming tax revenue $321.53 millionhow taxes Spent Infrastructure, schools and universities, the environment, tourism projects, cultural initiatives, general fundlegalization date 1989first Casino opening date 1991State gaming tax rate Graduated tax rate with a maximum of up to 22% on gross gaming revenue at riverboats and up to 24% at racetracks with slots and table games with gaming revenue exceeding $100 millionMode of legalization Local option vote, legislative actionVisitor Volume 22.16 millionSources: Iowa Gaming Association, Iowa Racing and Gaming Commission

Emmetsburg

Sioux City

Council Bluffs

Osceola

Burlington

Davenport

Altoona

RiversideBettendorf

Clinton

DubuqueMarquette

Northwood

Waterloo

InJune,GrandFallsCasinoResortopenedinLarchwood,Iowa—becomingthestate’s18thcommercialcasino.Thenewpropertyhelpedspurincreasesingamingrevenue(+3.7percent),taxrevenue(+5.3percent)andgamingemployment(+5.3percent),comparedto2010figures.

indianaCurrent # of operating Casinos 13Casino format Riverboats, land-based and racetrack casinos with slots and table gamesCasino employees 14,079Casino employee Wages $459.30 million (includes tips and benefits)gross Casino gaming revenue $2.721 billion gaming tax revenue $846.37 millionhow taxes Spent Economic development, local governmentlegalization date 1993first Casino opening date 1995State gaming tax rate Riverboat and Land-based Casinos: Graduated tax rate from 15% to 40% of gross gaming revenue; $3 per patron admissions tax; Racinos: Graduated slot tax from 25% to 35% of gross gaming revenueMode of legalization Local option vote, legislative actionVisitor Volume 25.04 millionNote: Indiana wage and employment data includes 12 of 13 properties, as one declined to participate in the data collection.

Sources: Casino Association of Indiana, Indiana Gaming Commission

Michigan CityGaryE. Chicago

Hammond

French Lick

Evansville Elizabeth

Markland DamRising SunLawrenceburg

Shelbyville

Anderson

Indiana,thenation’sthird-largestcommercialgamingstatebyrevenue,sawbothitsgrossgamingrevenue(-2.5percent)anditsgamingtaxrevenue(-3.3percent)declinein2011comparedto2010data.


Larchwood


KanSaSCurrent # of operating Casinos 2Casino format Land-based (state-owned)Casino employees N/ACasino employee Wages N/Agross Casino gaming revenue $48.48 milliongaming tax revenue $13.08 millionhow taxes Spent State debt reduction, infrastructure improvements, property tax relief, problem gambling treatmentlegalization date 2007first Casino opening date 2009State gaming tax rate 22% state tax, 3% local government tax and 2% tax to fund problem gambling treatmentMode of legalization Legislative action, local option voteVisitor Volume Data not availableNote: Both properties in Kansas declined to provide employment and wage data.

Sources: Kansas Lottery, individual property

Dodge City

Thesecondstate-ownedcasinoopenedinMulvane,Kan.inDecember2011andwaspartofthereasonthatKansasexperiencedyear-over-yearincreasesingamingrevenue (+28.3percent)andtaxreceipts(+38.0percent).

louiSianaCurrent # of operating Casinos 18Casino format Riverboat, land-based and racetrack casinos with slots and table gamesCasino employees 17,207Casino employee Wages $569.23 million (includes tips and benefits) gross Casino gaming revenue $2.374 billiongaming tax revenue $573.19 millionhow taxes Spent General fund, city of New Orleans, public retirement systems, state capital improvements, rainy day fundlegalization date 1991first Casino opening date 1993State gaming tax rate Riverboat Casinos: 21.5%1; Land-based casino: $60 million annual tax or 21.5% of gross gaming revenue, whichever is greater; Racinos: 18% of gross gaming revenue paid to horsemen; 18.5% of net to state taxes and 4% to local parishMode of legalization Local option vote, legislative actionVisitor Volume 32.04 million1Riverboat casinos pay an additional 4 percent to 6 percent to local governing authorities under the terms of “local boarding fee” agreements.

Sources: Louisiana Casino Association, Louisiana Gaming Control Board, individual properties

Bossier City

Shreveport

Baton RougeNew Orleans

KennerAmelia

OpelousasVinton

Lake Charles

TheeconomicimpactofLouisiana’scommercialcasinosheldsteadyin2011,withanegligible(+0.01percent)increaseingrossgamingrevenueandaslight(+0.2percent)increaseingamingtaxrevenueversus2010figures.


Mulvane


MarylandCurrent # of operating Casinos 2Casino format Land-based, slots-only casinos with publicly run video lottery terminals with distributions to operatorsCasino employees 290Casino employee Wages $9.86 million (includes tips and benefits)gross Casino gaming revenue $155.71 milliongaming tax revenue $89.53 millionhow taxes Spent Education trust fund, local impact grants, small, minority- and women-owned businesseslegalization date 2008first Casino opening date 2010revenue retained by operator 33%Mode of legalization Constitutional referendumVisitor Volume Data not availableNote: Maryland wage and employment data includes one of two properties, as one declined to participate in the data collection.

Sources: Maryland Lottery, individual properties

Perryville

MaineCurrent # of operating Casinos 1Casino format Racetrack casino with slot machinesCasino employees 364Casino employee Wages $10.83 million (includes tips and benefits) gross Casino gaming revenue $59.45 milliongaming tax revenue $29.06 millionhow taxes Spent Education, health care, agriculture, gambling control board administration, city of Bangorlegalization date 2004first Casino opening date 2005State gaming tax rate 1% tax on handle or the amount wagered; 39% tax on gross gaming revenue; 3% tax on gross gaming revenue to the city of BangorMode of legalization Local option vote, legislative actionVisitor Volume Data not availableSources: Maine Gambling Control Board, Penn National Gaming, Inc.

Bangor

Whencomparedwith2010figures,Maine’sgrossgamingrevenuedroppedby3.6percentin2011, anditsgamingtaxreceiptsfellby3.7percentyear-over-year.

Thefirstfull-yearofoperationsatMaryland’sfirstcasinoinPerryville,Md.andtheopeningofitssecondpropertyinBerlin,Md.ledtothecollectionoffourtimestheamountofgaming(+464.2percent)andtax(+464.2percent)revenuein2011aswasearnedin2010.


Berlin


MiChiganCurrent # of operating Casinos 3Casino format Land-basedCasino employees 7,303Casino employee Wages $425.05 million (includes tips and benefits)gross Casino gaming revenue $1.424 billiongaming tax revenue $320.67 millionhow taxes Spent Public safety, capital improvements, youth programs, tax relief, neighborhood development and improvement, infrastructure repair and improvementlegalization date 1996first Casino opening date 1999State gaming tax rate 19% tax on gross gaming revenue (10.9% to city of Detroit, 8.1% to state of Michigan); state and municipal service fees also are levied annuallyMode of legalization Local advisory vote, statewide voter referendum, legislative actionVisitor Volume Data not availableSources: Michigan Gaming Control Board, individual properties

MiSSiSSiPPiCurrent # of operating Casinos 30Casino format Dockside, land-basedCasino employees 23,721Casino employee Wages $826.64 million (includes tips and benefits)gross Casino gaming revenue $2.239 billiongaming tax revenue $274.42 millionhow taxes Spent Housing, education, transportation, health care services, youth counseling programs, local public safety programslegalization date 1990first Casino opening date 1992State gaming tax rate Graduated tax of 8% on gaming revenues; up to 4% additional tax on gaming revenues may be imposed by local governmentsMode of legalization Legislative action, local option votesVisitor Volume 28.87 millionSources: Mississippi Casino Operators Association, Mississippi Gaming Commission

Detroit

Tunica/Robinsonville

Lula

Vicksburg

Greenville

Bay St. Louis

Natchez

Gulfport

Biloxi

Michigan’scommercialcasinomarket,whichincludesthreepropertiesinDetroit,continuedtoexperiencegrowthin2011witha2.9percentincreaseingrossgamingrevenueanda3.0percentincreaseingamingtaxcontributionscomparedto2010figures.

MississippiRiverfloodingthatforcedmanyriverboatcasinosinnorthernMississippitocloseduringAprilandMaycontributedtodeclinesinvisitorvolume,gamingrevenue(-6.3percent)andtaxcontributions(-3.9percent)in2011.



neVadaCurrent # of operating Casinos 256 (FY 2011)Casino format Land-basedCasino employees 174,381 (FY 2011)Casino employee Wages $7.461 billion (includes tips and benefits) (FY 2011)gross Casino gaming revenue $10.701 billiongaming tax revenue $865.25 millionhow taxes Spent Education, local governments, general fund, problem gambling programslegalization date 1931first Casino opening date 1931State gaming tax rate Graduated tax rate with a maximum tax of 6.75% on gross gaming revenue; additional fees and levies may be imposed by counties, municipalities and the state adding approximately 1% to the tax burdenMode of legalization Legislative actionVisitor Volume 51.37 millionSources: Nevada Gaming Control Board, Nevada Commission on Tourism

McDermitt Jackpot

WellsElkoWinnemucca

Battle Mtn.Reno

Carson City Gardnerville

Lake Tahoe

Lovelock Fallon

HawthorneBeatty Tonopah

West Wendover

Ely

MesquiteN. Las VegasLas VegasHenderson

LaughlinSearchlightPrimm

Pahrump Indian Spgs.

Amargosa Valley

MiSSouriCurrent # of operating Casinos 12Casino format RiverboatCasino employees 10,435 (FY 2011)Casino employee Wages $343.50 million (includes tips and benefits) (FY 2011)gross Casino gaming revenue $1.805 billiongaming tax revenue $484.83 millionhow taxes Spent Education, local public safety programs, compulsive gambling treatment, veterans’ programs, early childhood programslegalization date 1993first Casino opening date 1994State gaming tax rate 21% tax on gross gaming revenue; $2 per patron admission fee, per excursion, split between home dock community and the stateMode of legalization Statewide vote, local option vote, legislative actionVisitor Volume 25.87 millionSources: Missouri Gaming Association, Missouri Gaming Commission

Caruthersville

St. Louis

La GrangeSt. JosephRiverside

Kansas City

North Kansas City

Boonville

St. Charles

Maryland Heights

AfullyearofoperationsatRiverCityCasinoinSt.LouishelpedMissouri’sstatewidegrossgamingrevenuesincreaseslightly(+1.1percent)comparedto2010figures,butgamingtaxrevenueincheddownward(-0.3percent)whencontrastedwith2010statistics.

from 2010 to 2011, visitor volume increasedbymorethanonemillioninNevada,helpingtodriveincreasesingamingrevenue(+2.9percent)andtaxrevenue(+3.6percent).Employment,whichtendstobealaggingindicatorofrecovery,declinedslightlyby 0.4percent.



neW JerSeyCurrent # of operating Casinos 11Casino format Land-basedCasino employees 32,823Casino employee Wages $915.32 million (includes tips)gross Casino gaming revenue $3.318 billiongaming tax revenue $277.60 millionhow taxes Spent Senior citizens, disabled, economic revitalization programslegalization date 1976first Casino opening date 1978State gaming tax rate 8% tax on gross gaming revenue, plus a community investment alternative obligation of 1.25% of gross gaming revenue (or an investment alternative 2.5% on gross gaming revenue) Mode of legalization Statewide vote, legislative actionVisitor Volume 28.45 millionSources: New Jersey Casino Control Commission, South Jersey Transportation Authority

Atlantic City

neW MexiCoCurrent # of operating Casinos 5Casino format Racetrack casinos with slot machinesCasino employees 1,4471

Casino employee Wages $33.61 million (includes tips and benefits)2 gross Casino gaming revenue $248.92 milliongaming tax revenue $64.72 millionhow taxes Spent General fund, problem gambling treatmentlegalization date 1997first Casino opening date 1999State gaming tax rate 26% tax on gross gaming revenue; 20% to purse supplements; 0.25% to fund disordered gambling treatment and awarenessMode of legalization Legislative actionVisitor Volume Data not available1New Mexico employment data includes four of five properties, as one declined to participate in data collection. 2010 data was used for the fourth property because they declined to provide 2011 information.2New Mexico wage data includes three of five properties, as two declined to participate in data collection. 2010 data was used for the third property because they declined to provide 2011 information.

Sources: New Mexico Gaming Control Board, individual properties

Farmington

Albuquerque

Ruidoso

Sunland Park

Hobbs

IncreasedregionalcompetitionfromafullyearoftablegameoperationsinneighboringDelawareandPennsylvaniacontinuedtotakeitstollontheAtlanticCitymarket.In2011,grossgamingrevenue(-7.0percent),employment(-3.9percent)anddirectgamingtaxrevenue(-9.1percent)alldeclinedcomparedwith2010figures.

EconomicimpactfiguresinNewMexicoheldsteadyin2011whencomparedto2010figures,withslightincreasesinbothgamingrevenue(+0.6percent)anddirectgamingtaxcontributions(+0.6percent).



oKlahoMaCurrent # of operating Casinos 2Casino format Racetrack casinos with slot machinesCasino employees 905Casino employee Wages NA1

gross Casino gaming revenue $106.23 milliongaming tax revenue $18.30 millionhow taxes Spent Educationlegalization date 2004first Casino opening date 2005State gaming tax rate Graduated state tax from 10-30% on gross gaming revenue; 9% tax to state racing commission, varying payments to horsemen, breeders and purses depending on track gaming revenuesMode of legalization Statewide question on ballotVisitor Volume Data not available1Both properties in Oklahoma declined to provide wage data.

Sources: Oklahoma Horse Racing Commission, State of Oklahoma-Office of the State Auditor and Inspector

Oklahoma City

Claremore

neW yorKCurrent # of operating Casinos 9Casino format Racetrack casinos with publicly run video lottery terminals with distributions to operatorsCasino employees 5,082Casino employee Wages $179.06 million (includes tips and benefits) gross Casino gaming revenue $1.259 billiongaming tax revenue $593.40 millionhow taxes Spent Educationlegalization date 2001first Casino opening date 2004revenue retained by operator 32.86%Mode of legalization Legislative actionVisitor Volume Data not availableNote: New York employment and wage figures reflect 2010 data for one property that declined to provide 2011 data.

Sources: New York Racing and Wagering Board, New York Lottery, individual properties

Saratoga SpringsVernon

FarmingtonBatavia

Hamburg

Nichols Monticello

Yonkers

ThesuccessofOklahoma’stworacetrackcasinosisonesignthataslowandsteadyeconomicrecoverymayhavebegun.PropertiesinOklahomaCity, okla. and Claremore, okla. experiencedtheirlargestpercentageincreasesinemployment(+17.5percent),butalsopostedgainsingrossgamingrevenue(+6.4percent)andgamingtaxcontributions(+10.6percent).

TheOctober2011openingofResortsWorldNewYorkinQueens,NewYorkCitynotonlybroughtcommercialgamingtothelargestcityintheU.S.,butdrovesubstantialyear-over-yearincreases inemployment(+46.7percent),gamingrevenue(+15.6percent)andtaxreceipts(+17.9percent)comparedto2010figures.


New York City


PennSylVaniaCurrent # of operating Casinos 10Casino format Land-based and racetrack casinos with slots and table gamesCasino employees 13,050Casino employee Wages $460.29 million (includes tips and benefits)gross Casino gaming revenue $3.024 billiongaming tax revenue $1.456 billionhow taxes Spent Property tax relief, economic development, tourism, horse racing industry, host local governmentlegalization date 2004first Casino opening date 2007State gaming tax rate Slot Machines: 34% to state gaming fund, 12% to horse racing industry, 5% to economic development, 4% to local and county governments; Table Games: 16% tax - 14% to general fund, 2% to local county municipalitiesMode of legalization Legislative actionVisitor Volume Data not availableNote: Pennsylvania wage and employment data includes nine of 10 properties, as one declined to participate in data collection. 2010 data was used for two properties because they declined to provide 2011 information.

Sources: Pennsylvania Gaming Control Board, individual properties

Erie

Wilkes Barre

Mount Pocono

Meadow LandsBensalem

Chester

Grantville BethlehemPittsburgh

rhode iSlandCurrent # of operating Casinos 2Casino format Racetrack casinos with publicly run video lottery terminals with distributions to operatorsCasino employees N/ACasino employee Wages N/Agross Casino gaming revenue $512.86 milliongaming tax revenue $308.71 million (FY 2011)how taxes Spent General fundlegalization date 1992first Casino opening date 1992revenue retained by operator 27.53%1

Mode of legalization Legislative actionVisitor Volume Data not availableNote: Both properties in Rhode Island declined to provide employment and wage data.1FY 2011 data was used to calculate the percentage of revenue retained by operator.

Sources: Rhode Island Lottery, individual properties

Lincoln

Newport

Philadelphia

InPennsylvania,2010to2011year-over-yearincreasesingamingrevenue(+21.3percent),taxreceipts(+9.6percent)andemployment (+3.0percent)weredrivenbyafullyearoftablegamesatall10propertiesandafullyearofoperationsatSugarhouseCasino inPhiladelphia.

2011wasasuccessfulyearforRhodeIsland’sracetrackcasinos.Combined,thetwopropertiessawincreasescomparedwith2010inbothgrossgamingrevenue(+7.5percent)anddirectgamingtaxrevenue(+4.2percent).



WeSt VirginiaCurrent # of operating Casinos 5Casino format Racetrack casinos with publicly run video lottery terminals and table games with distributions to operators, one land-based commercial casinoCasino employees 4,475Casino employee Wages $148.71 million gross Casino gaming revenue $958.70 milliongaming tax revenue $406.46 millionhow taxes Spent Education, senior citizens, tourismlegalization date 1994first Casino opening date 1994revenue retained by operator 46.99%Mode of legalization Local option vote, legislative actionVisitor Volume Data not availableNote: West Virginia wage and employment data includes four of five properties, as one declined to participate in the data collection.

Sources: West Virginia Lottery, individual properties

Chester

WheelingCharles Town

Cross Lanes

South daKotaCurrent # of operating Casinos 35Casino format Land-based (limited-stakes; $100 maximum bet)Casino employees 1,647 (CY 2010)Casino employee Wages $37.26 million (CY 2010) (includes tips)gross Casino gaming revenue $100.90 milliongaming tax revenue $16.36 millionhow taxes Spent 50% commission fund; 40% Department of Tourism; 10% Lawrence Countylegalization date 1989first Casino opening date 1989State gaming tax rate 9% tax on gross gaming revenue; gaming device tax ($2,000 per machine per year)Mode of legalization Statewide vote, local option vote, legislative actionVisitor Volume Data not availableSources: South Dakota Gaming Commission, Labor Market Information Center, South Dakota Department of Labor

Deadwood

White Sulphur Springs

DirectgamingtaxrevenueandgrossgamingrevenueinSouthDakotabothdeclinedby5percentduring2011,dueinparttoasmokingbanthattookeffectinNovember2010.

AfullyearoftablegameoperationsatHollywoodCasinoatCharlesTownRacesinCharlesTown,W.V.drovesignificant2011increasesinbothgrossgamingrevenues(+9.2percent)anddirectgamingtaxcontributions(+6.4percent)comparedto2010numbers.


2012 AGA Survey of CASino entertAinment 232012 AGA Survey of CASino entertAinment 23

ThE ImpACTS of CASInoS: CommunITy LEADErS WEIgh In

Source: VP Communications, Inc. and Peter D. Hart

thinking back to when casinos were first proposed in your community, was your initial reaction positive or negative?Of the community leaders and elected officials surveyed, seven out of 10 (70 percent) had positive initial reactions when casinos were first proposed, while 20 percent had a negative first impression of the idea.

SPeCial SeCtion

2%Didn’t Live Here

70%Positive 6%

Some of Both

20% Negative

3%Don’t Know/Refused

Casinos are an important part of the economic and entertainment mix in hundreds of jurisdictions across the country. According to the results of a new survey, the elected officials and community

leaders who call those cities and towns home view the gaming industry and the positive impact casinos have had on their communities in an overwhelmingly favorable light.

The study, conducted by VP Communications, Inc., in conjunction with national pollster Peter D. Hart, polled 210 elected officials and civic leaders from casino counties in commercial casino states, excluding Nevada. Elected officials included state representatives and senators, mayors, city and county council members, aldermen, members of boards of supervisors, and county commissioners and executives. Civic leaders included school superintendents, chamber of commerce presidents, fire or police chiefs, district attorneys, city or county managers and others. Almost three-quarters (73 percent) of participants have spent at least five years in their current position, and 30 percent have spent more than 15. More than three-quarters (78 percent) have lived in their area for more than 20 years.

The survey results indicate that, according to community leaders, casinos have more than delivered on their promises of jobs, economic development and tax revenues, and those benefits can be felt throughout communities. In fact, more than four out of five (83 percent) community leaders say that the introduction of casinos has met or exceeded their expectations. The same overwhelming majority (83 percent) says that the overall impact of casinos has been positive.

More than eight out of 10 community leaders think that casinos have done a good or fair job of producing promised benefits, such as taxes and government revenue, quality jobs, increased local and regional economic activity, increased tourism and expanded entertainment options. Additionally, more than three-quarters (76 percent) of community leaders say that casinos have done more to help than hurt other area businesses, and nearly three-quarters (74 percent) say casinos are good corporate citizens.

In addition to the jobs and economic development created by casinos, tax receipts are another tangible benefit recognized by local leaders. Nearly three-quarters (71 percent) of respondents say casinos generate a net tax increase, and well more than half (57 percent) say casino tax revenues have allowed their communities to avoid cutting key programs or start new projects that would not have been possible otherwise.

Perhaps the most telling result is that, when everything is taken into account, more than three-quarters (76 percent) of community leaders surveyed would choose to vote “yes” if given the chance to go back and cast the deciding vote to allow casinos in their communities.


the impacts of Casinos: Community leaders Weigh in Continued

For almost half (47 percent) of community leaders, the introduction of casinos have exceeded their expectations, and more than one-third (36 percent) say that the introduction of casinos met their expectations. This is especially impressive given the fact that a large majority (70 percent) of community leaders had initial positive reactions to the idea of casinos.

taking everything into account, how has the introduction of casinos lived up to your expectations?

Casinos generate a wealth of positive impacts for their communities — jobs, economic development, tourism, tax revenue and more — and strong majorities of community leaders think that casino have delivered on their promises to produce these benefits. More than half of the community leaders surveyed say casinos have done a good job of providing quality jobs (53 percent) and contributing to local economic activity (52 percent). Seven out of 10 (70 percent) leaders think that casinos do a good job contributing tax revenue, and nearly three out of five (58 percent) agree that casinos do a good job generating area tourism.

how good have the casinos in your community been at producing the following benefits?

47%Better than

Expected14% Worse than Expected

36% Just as Expected


0

10

20

30

40

50

60

70

80

0

10

20

30

40

50

60

70

80

70%

53%

2%

9%

19%

38%

52%

4%

36%

7% 5%6%11%

58%

28%

65%

3%

26%

7%

29%

48%

2%

8%

14%

Not SurePoorFairGood

Contributing taxesand government

revenue

Providing quality jobs

Generating area tourism

Contributing to local/regional

economic activity

Expanding entertainment

options

Contributing to community and

charitable organizations





Statement A: Some people say that casinos generate a net increase in tax revenue for states and local communities because it is money that comes from outside the area or would not have been spent otherwise.

Statement B: Other people say that casinos do NOT generate a net increase in tax revenue for states and local communities because casinos simply siphon off money that people would have spent on other goods and services.

based on your own experience, which statement comes closer to your point of view about casino tax revenue?

71%A: Generates Increased

Tax Revenue3% Depends/Some of Both

23% B: Does NOT Generate Increased Tax Revenue


tangible tax benefits

Some claim that casinos do not generate a net increase in tax revenue because they siphon money that people would have spent on other goods and services, but the vast majority of community leaders surveyed disagree. In fact, more than seven out of 10 (71 percent) elected officials and community leaders in casino communities think that casinos generate a net increase in tax revenue.

have casino tax revenues or local development agreements allowed your community to undertake projects or avoid making major cuts to key programs that otherwise would not have been possible?

It is no secret that state and local governments make excellent use of their gaming tax receipts. In fact, almost three out of five (57 percent) surveyed leaders say that casino tax revenues have allowed their community to save key programs or undertake projects that would not have been possible otherwise.

57%Yes

29% No





Which of the following statements comes closer to your point of view on casinos’ corporate citizenship?

Positive Community impacts

thinking about your own experience, on balance, would you say that casinos have done more to helP or hurt the other businesses in your community?Casinos are integral parts of the economic life of their local communities, generating economic development that helps area businesses. The community leaders surveyed support this claim, as more than three-quarters (76 percent) say that casinos have done more to help than hurt the other businesses in their communities.

taking everything into consideration, would you say that the impact of casinos on your community has been positive or negative?An overwhelming majority (83 percent) of community leaders surveyed say that the overall impact of casinos on their communities has been positive.


Statement A: Casinos act responsibly, are good corporate citizens and look out for the interests of their customers.

Statement B: Casinos do not act responsibly, are not good corporate citizens and take advantage of their customers.

74%A: Act Responsibly

11% Don’t Know/Refused

16% B: Do Not Act Responsibly


76%Help

8% Some of Both

14% Hurt



83%Positive

3% Some of Both

13% Negative


Nearly three-quarters (74 percent) of elected officials and civic leaders surveyed think that casinos are good corporate citizens, acting responsibly and looking out for the interests of their customers.


opponents say that casinos bring in major problems such as crime and prostitution and more generally hurt the image of communities where they are located. looking at the situation in your community, do you feel that concern turned out to be the case?Many casino opponents claim that casinos bring with them major problems like crime, prostitution and a tarnished image for their host communities, but almost nine out of 10 (88 percent) community leaders disagree, saying this is not the case.

Potential negative impacts don’t Materialize

Suppose you could go back in time to the point when casinos were first introduced into this area, and you had the deciding vote. Knowing everything that you know now, would you vote to allow casinos or not?If the surveyed elected officials and civic leaders were given the chance to go back and cast the deciding vote to allow or reject casinos in their communities, more than three-quarters (76 percent) would choose to vote “yes” to introduce casinos.

if they Could do it all again…


88%No, That’s

NOT the Case3% Don’t Know/Refused

9% Yes, That’s the Case


76%Yes

3% Depends/Some of Both

18% No



forms of gambling Participated in during the last 12 Months, 2011The lottery was the most popular form of gambling during 2011, with more than four out of 10 (44 percent) survey respondents playing in the past year. More than one-quarter (27 percent) gambled at a casino, while just fewer than one-quarter (23 percent) reported betting casually with friends on things like fantasy sports leagues or a game of golf. Four (4) percent made a wager over the Internet during the past year.

0

10

20

30

40

50

15%

23%

44%

27%

Playing theLottery

PlayingPoker

Wageringon a Race

Casino Gambling

Internet Gambling

4%

8%

CasualBetting


CaSino ViSitation

2012 AGA Survey of CASino entertAinment28

0

5

10

15

20

25

30

35

40

11%

39%

11%

29%

10%

More than 10 Times

ZeroTimes

Don’t Know/Refused

Three to10 Times

One or Two Times

how many times do you expect to visit a casino in the next 12 months?

Of those survey respondents who visited a casino to gamble in 2011, almost 8 out of 10 (79 percent) plan to return sometime during 2012.


total Casino gamblers, 2011

Source: VP Communications, Inc. and Peter D. Hart and U.S. Census Bureau12010 Census figures were used because 2011 data was not available at press time.

Total U.S. population age 21 and older = 221.0 million1

27%

59.7 Million Casino Gamblers

More than a quarter (27 percent) of the U.S. adult population gambled in casinos during 2011. This is a slight increase over the 25 percent who gambled in casinos during 2010.


26%

29%

Male Female

0

5

10

15

20

25

30

Casino gambling by gender, 2011According to a 2012 opinion poll, there is only a slight gender gap (three percentage points) when it comes to casino gambling, with nearly three out of 10 (29 percent) men and more than one quarter (26 percent) of women gambling at casinos.


Casino Visitation Continued

0

10

20

30

40

50

60

3%7%

53%

23%

3%

Slot machines

andvideo poker

Craps RouletteBlackjack Poker


top five favorite Casino gamesWhen asked their favorite casino game, more than half (53 percent) of surveyed casino-goers say electronic gaming machines, including slot machines and video poker, are their favorite. Blackjack is the next most popular game, cited by nearly one-quarter (23 percent) of respondents. Poker came in third with 7 percent indicating it is their favorite.


beyond the Casino floor

Ate at a fine dining restaurantSaw a show, concert or other live entertainmentVisited a bar or clubWent shoppingUsed recreational facilities, such as a spa, pool, fitness area or golf course46%

51%

76%

62%

28%

0

10

20

30

40

50

60

70

80

When you visited a casino this past year, in what other activities did you participate?For most visitors, going to a casino involves more than just gambling, and a recent poll of casino visitors bears that out. During their recent casino trips, more than three-quarters (76 percent) ate at a fine dining restaurant, 62 percent saw a show, concert or other live entertainment and just more than half (51 percent) visited a bar or night club.



DiningShowsBars and NightclubsShoppingConference, Trade Show or Business Meeting

11%14%

70%

40%

7%

0

10

20

30

40

50

60

70

80

if you never or rarely gamble, what are your favorite things to do at a casino? (Respondents could give multiple answers)

Of those survey respondents who say they never or rarely gamble at a casino, seven out of 10 (70 percent) say that dining is one of their favorite activities when they visit; 40 percent enjoy going to shows.


27% Never or Rarely


47%Always or

Almost Always

24%Usually or

Sometimes

When you visit a casino, how often do you gamble?With the wealth of non-gaming amenities available at most casinos, it is no surprise that some casino visitors choose not to gamble at all. In fact, more than one-quarter (27 percent) of those surveyed never or rarely gamble when they go to a casino.



entertainment outside the Casino When you visited a casino this past year, how often did you visit other attractions in the area outside the casino property?Casinos are important parts of their host communities’ tourism industries, and casino visitors often take advantage of other local attractions. According to recent public opinion polling, almost three out of five (58 percent) casino-goers visit other attractions in the area outside the casino property.



41% Never/Rarely


58%Always/Usually/

Sometimes

When you visited a casino this past year, how often did you shop or eat at other places in the area outside the casino property?Local businesses also experience a spillover effect from tourists who visit casinos. More than three out of five (62 percent) casino visitors shopped or ate at other places in the area outside of the casino property during their recent casino trips.


37% Never/Rarely

62%Always/Usually/

Sometimes

27% Never or Rarely


47%Always or

Almost Always

24%Usually or

Sometimes


SPotlight on gaMing MaChineSnumber of gaming Machines per State, 2011


Nationwide, there are more than 837,000 electronic gaming machines in commercial and tribal casinos and non-casino locations. Half (50 percent) of the machines are in commercial casinos, while 40 percent can be found in tribal casinos. Nevada has more than 183,000 gaming machines — far and away the largest number of any state. California and Oklahoma have the next largest totals with more than 67,000 and 65,000, respectively.

Machines in Machines Machines in Commercial in Tribal Non-Casino State Casinos Casinos Locations Total

gaming Machine revenue as Percentage of overall gaming revenue in Commercial Casino States*, 2011

SD INMOCOIA MSKSIL NJWV NV

91.2 91.2 89.7 88.6 87.3 86.1 84.685.385.8

77.079.5

0

20

40

60

80

100

DE PA

70.6

63.0

*Commercial casino states not listed here either do not have table games or do not collect separate revenue data for table games and gaming machines. Only states where table games were operational for all of 2011 were included.

Source: State gaming control boards

Thirteen commercial casino states have both slot machines and table games with a full year of available data, and of those states, each receives at least 63 percent of their overall gaming revenue from slot machines. Iowa and South Dakota get the largest portion of their gaming revenue from slot machines with 91.2 percent, while Nevada (63.0 percent) gets the smallest percentage of its gaming revenues from machine play.

Alabama 3,270 3,270Alaska 80 80Arizona 14,488 14,488Arkansas 1,700 1,700California 67,601 67,601Colorado 14,565 1,450 16,015Connecticut 12,424 12,424Delaware 6,846 6,846Florida 5,357 12,363 17,720Idaho 3,865 3,865Illinois 10,248 10,248Indiana 22,709 22,709Iowa 17,999 2,450 20, 449Kansas 1,905 3,561 5,466Louisiana 20,568 6,350 14,500 41,418Maine 1,000 1,000Maryland 2,300 2,300Michigan 9,540 21,617 31,157Minnesota 22,252 22,252Mississippi 32,786 3,364 36,150Missouri 19,143 19,143Montana 1,360 20,652 22,012Nebraska 469 469Nevada 162,995 1,253 19,071 183,319New Mexico 2,652 15,615 18,267New Jersey 27,048 27,048New York 12,573 12,157 24,730North Carolina 3,000 3,000North Dakota 3,728 3,728Oklahoma 1,400 64,000 65,400Oregon 7,453 12,145 19,598Pennsylvania 26,510 26,510Rhode Island 5,851 5,851South Dakota 3,737 2,124 9,136 14,997Texas 1,844 1,844Washington 27,358 27,358West Virginia 9,181 7,940 17,121Wisconsin 18,061 18,061Wyoming 1,500 1,500ToTAl 418,613 335,057 83,444 837,114


SPotlight on SPortS betting

Sports betting is a popular activity in America. Until 2009, Nevada was the only state with legal, operational sports books. That year, Delaware began taking limited parlay wagers on National

Football League (NFL) games. Nevada is still the only state where it is legal to place a wager on a full complement of sporting events and leagues, so the data below describes sports betting in Nevada only.

total amount Wagered vs. gross revenue, 2007-2011Nevada’s casino visitors wagered more than $2.8 billion on sporting events during 2011, the largest amount in recent years. While this is a significant figure, the amount of revenue generated by sports betting is considerably smaller. Gross gaming revenue from Nevada’s sports books totaled $140.7 million in 2011, which is equal to only 4.9 percent of the amount wagered.

Source: Nevada Gaming Control Board

What Sports are the Most Popular bets?Representing nearly half (47 percent) of all bets, football was the most popular sport on which to wager during 2011. Basketball was the second most popular sport, but due to the NBA lockout reducing the total number of games available, it saw its percentage of total sports bets drop to 26 percent from 30 percent in 2010.

Super bowl betting history, 2005-2012Each year, gamblers in Nevada casinos wager more on the Super Bowl than any other one-day sporting event. The result of the game and the point spread can cause the amount wagered on the game and casinos’ gross revenues to vary widely. In 2012, nearly $94 million was wagered, and all but just more than $5.0 million was returned to bettors.

8% Other $242.09 Million

47%

19% Baseball $557.47 Million

26% Basketball $737.12 Million Football

$1.342 Billion

Gross Revenue

20112007 2008 2009 2010.151.136 .141.168

$ Billions

0.0

0.5

1.0

1.5

2.0

2.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

0.0

0.5

1.0

1.5

2.0

2.5

3.0

.136

$30.74

2 3 4 5 6 71

$10.6$29.3

$90.2

$164.9

$267.0

$5.1

$ Billions

0.0

0.5

1.0

1.5

2.0

2.5

3.02.570

2.7612.596

2.8792.578

Amount Wagered


2006 2007 2008 20092005

$ Millions

0.0

0.5

1.0

1.5

2.0

2.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

0

20

40

60

80

100

0

20

40

60

80

100

5.066.68-2.6012.908.8315.43

2010 20122011

93.9090.76 94.53 93.07 92.0681.51 82.73

6.87

87.49

0.72

Gross Revenue Amount Wagered


SPotlight on gaMing MaChineS


When you think about going to a casino for an evening out, how good of a value for your money is it compared to other entertainment options you might enjoy?When casino visitors are asked to compare going to a casino for an evening out against other entertainment options, three-quarters (75 percent) say visiting a casino is an excellent, very good or good value for the money.

21% A Not So Good/Poor Value


75%An Excellent/

Very Good/Good Value


do you set a budget when you go casino gambling?Setting a budget is an important part of responsible gaming. More than eight out of 10 (84 percent) casino-goers take this to heart and set a budget before a casino gambling trip.

15% No


84%Yes


Less than $100$100-$199$200-$299$300 or moreDon’t Know/Refused

9%11%

48%

23%

8%

0

10

20

30

40

50


budgeting for the CaSino exPerienCe

What budget do you usually set for a day of casino gambling?The gambling budgets set by casino visitors are as varied as the people who set them, but almost half (48 percent) of those questioned set a budget of less than $100 when they make plans to go to a casino. Almost one-quarter (23 percent) set a budget between $100 and $200, while 9 percent budget more than $300.


According to a 2012 public opinion poll conducted by VP Communications and national pollster Peter D. Hart, 81 percent of Americans view casino gaming as acceptable for themselves or others. The poll also

shows that Americans recognize the importance of the casino industry to U.S. travel and tourism.

u.S. Casino gaming acceptability, 2003-2012

49%57%

50%

52%

45%43%

54% 54%

4% 3%3%0%

2%3%1% 2%

0

10

20

30

40

50

60

0

10

20

30

40

50

60

2007 20122003 2004 2005 2006 2008 2009 2010 2011

Don’t Know/Refused

Not Acceptable for Anyone

Acceptable for Others but Not You Personally

Acceptable for You and Others*

30%

35%

29%27% 27%28%

36%38%

18%16% 16%16%

14%15%17%17%

44%

3%

38%

15%

46%

35%

16%

2%


A significant majority (81 percent) of those surveyed thinks that casino gaming is acceptable for themselves or others, which is similar to acceptability findings during the past decade.

*Prior to 2012, survey participants were asked if casino gaming was “perfectly acceptable for anyone to do,” rather than the way it is currently asked, “acceptable for you and others.”

how important do you think the casino industry is in terms of contributing to the overall travel and tourism industry in the u.S.?Americans understand the value of casinos to the U.S. tourism sector, as three out of five (60 percent) survey respondents think that the casino industry is very or somewhat important to the overall travel and tourism industry.


36% Only a Little Important/Not Important at All


60%Very/

SomewhatImportant

aMeriCan PerCePtionS of CaSino entertainMent


bingo: A game of chance in which each player has one or more cards printed with differently numbered squares on which to place markers when the respective numbers are drawn and announced by a caller. The first player to mark a complete pattern of numbers (e.g., a row) wins.

Class i game*: A social game that is not considered a game of chance, played solely for prizes of minimal value; or a traditional form of Indian gaming engaged in by individuals as a part of or in connection with tribal ceremonies or celebrations.

Class ii game*: A game of chance including (if played in the same location) bingo, pull-tabs, lotteries, punchboard and other games similar to bingo, whether live or electronic, in which players bet against other players; an electronic game played on a “linked” video gaming device that is connected to a central computer system.

Class iii game*: Any form of gaming besides a Class I and Class II game, including electronic gaming devices with random-number generators and house-banked table games.

Commercial Casino: A private-sector establishment (i.e., nongovernmental) — whether land-based, riverboat, dockside, limited-stakes or racetrack casino — that offers games of chance and is regulated and taxed by the state where it is located.

dockside Casino: A casino on a body of water that is not required to cruise or is a permanently moored barge.

effective tax rate: The total percentage a casino pays in taxes, including taxes on direct gross gaming revenue and admissions as well as corporate, payroll, real estate and other taxes similar to those paid by other businesses.

electronic gaming device, or egd: Any mechanical or electronic game of chance, including slot machines, video lottery terminals (VLTs) and video bingo, video pull-tabs and video poker machines.

gross gaming revenue: The amount a gaming operation earns before taxes, salaries and other expenses are paid — the equivalent of “sales,” not “profit.”

handle: The estimated total amount wagered, including the winnings returned to players.

house advantage: A measure of how much a casino expects to win, expressed as a percentage of the player’s wager.

house-banked game: A game in which the player bets against the house; Class III games (e.g., blackjack and other table games).

land-based Casino: A casino that is built on an earth foundation, not on a waterway.

limited-stakes Casino: A casino in which the allowable bet on a single hand is limited to a maximum wager.

odds: 1) the probability of winning; 2) the payout in relation to amount wagered, e.g., winning odds.

Pari-mutuel: A system of betting on races whereby the winners divide the total amount bet, after deducting management expenses, in proportion to the sums they have wagered individually.

Player-banked game: A game in which the player bets against other players; Class II games (e.g., bingo and pull-tabs).

Pull-tabs: A game of chance in which a player opens perforated windows on a paper card, matching symbols on the card to win. Each group, referred to as a set, of pull-tabs has a unique prize structure; winners collect the prize that correlates to the specific pull-tab set.

racetrack Casino, or racino: A hybrid of a pari-mutuel venue — horse track, dog track or jai alai court — and a casino. Typically, the “casino” at a racino offers only slot machine games.

random-number generator: A mechanism inside the computer of a Class III game that ensures that each pull has an equal chance of hitting the jackpot.

Slot Machine: Any mechanical or electronic device in which outcomes are determined by a random-number generator located inside the terminal.

Video bingo: An electronic version of traditional bingo.

Video lottery terminal, or Vlt: An electronic game of chance played on a video terminal that is networked and can be monitored, controlled and audited by a central computer system. These games are authorized through the state lottery and considered by law to be lotteries, not commercial gaming.

Video Pull-tabs: An electronic version of paper pull-tabs.

glossary of gaming terms

*Class I, Class II and Class III are legal terms in the context of the Indian Gaming Regulatory Act (IGRA), but for the purposes of this survey help define the type of gaming operating in different states.

Sources: American Gaming Association; The American Heritage® Dictionary of the English Language, Fourth Edition; Christiansen Capital Advisors; Indian Gaming Regulatory Act (IGRA); National Gambling Impact Study Commission Report; National Indian Gaming Commission; Nevada Gaming Control Board Regulation 29

aPPendix


Opponents say that casinos bring in major problems such as crime and prostitution and more generally hurt the image of communities where they are located. Looking at the situation in your community, do you feel that concern turned out to be the case? ......................27Suppose you could go back in time to the point when casinos were first introduced into this area, and you had the deciding vote. Knowing everything that you know now, would you vote to allow casinos or not? ....................................................................................27

Casino VisitationForms of Gambling Participated in During the Last 12 Months, 2011 ............................................................28Total Casino Gamblers, 2011 ...............................................28How many times do you expect to visit a casino in the next 12 months? ..................................28Casino Gambling by Gender, 2011 ......................................29Top Five Favorite Casino Games .........................................29When you visited a casino this past year, in what other activities did you participate? ......................30When you visit a casino, how often do you gamble? .......30If you never or rarely gamble, what are your favorite things to do at a casino? ...............................30When you visited a casino this past year, how often did you visit other attractions in the area outside the casino property? ................................31When you visited a casino this past year, how often did you shop or eat at other places in the area outside the casino property? ............................31

Spotlight on gaming MachinesNumber of Gaming Machines Per State, 2011 (Data Table) ...................................................................32Gaming Machine Revenue as Percentage of Overall Gaming Revenue in Commercial Casino States, 2011 ......32

Spotlight on Sports bettingTotal Amount Wagered vs. Gross Revenue, 2007-2011 ....33What Sports Are the Most Popular Bets? ...........................33Super Bowl Betting History, 2005-2012 ..............................33

budgeting for the Casino experienceWhen you think about going to a casino for an evening out, how good a value for the money is it compared to other entertainment options you might enjoy? .................34Do you set a budget when you go casino gambling? .......34 What budget do you usually set for a day of casino gambling? .............................................34

american Perceptions of Casino entertainmentU.S. Casino Gaming Acceptability, 2003-2012 ...................35How important do you think the casino industry is in terms of contributing to the overall travel and tourism industry in the U.S.? ...............................................35

national economic impact of Casino entertainmentCasino Locations by Category (Map) ....................................4Casinos per State (Data Table) ...............................................4U.S. Consumer Spending on Commercial Casino Gaming, 2002-2011 ...............................5State-by-State Consumer Spending on Commercial Casino Gaming, 2010 vs. 2011 .........................5 Commercial Casino Spending vs. Other Spending Choices, 2011 ..............................................6Commercial Casino Tax Revenue by State, 2010 vs. 2011 ..6 Commercial Casino Jobs by State, 2010 vs. 2011 ...............7Commercial Casino Wages, 2002-2011 .................................7Top 20 U.S. Casino Markets, 2011 .........................................8Top 10 U.S. Racetrack Casino Markets, 2011 ........................8Top U.S. Casino Markets, 2011 (Map) ...................................8

ageM Spotlight on gaming equipment Manufacturers

Gaming Equipment Manufacturing Economic Output, 2006-2011 .................................................9Gaming Equipment Manufacturing Employment, 2006-2011 .................................................................................9Gaming Equipment Manufacturing Salaries and Wages, 2006-2011 ............................................................9Gaming Equipment Manufacturers with Employees Covered by Employer-sponsored Health Care Plans .........10Purchases Made from Local Vendors by Gaming Equipment Manufacturers ...............................10 Gaming Equipment Manufacturers’ Market Expectations for the Next 12 Months .....................10Historical Trend in Expectations of Market Improvement for the Next 12 Months ...................10

the impacts of Casinos: Community leaders Weigh in

Thinking back to when casinos were first proposed in your community, was your initial reaction positive or negative? ............................................................23Taking everything into account, how has the introduction of casinos lived up to your expectations? ....24How good have the casinos in your community been at producing the following benefits? .........................24Based on your own experience, which statement comes closer to your point of view about casino tax revenue? ..........................................................................25Have casino tax revenues or local development agreements allowed your community to undertake projects or avoid making major cuts to key programs that otherwise would not have been possible? .................25Which of the following statements comes closer to your point of view on casinos’ corporate citizenship? ......26Thinking about your own experience, on balance, would you say that casinos have done more to HELP or HURT the other businesses in your community ...........26Taking everything into consideration, would you say that the impact of casinos on your community has been positive or negative? ............................................26

appendix Continued

index of Charts


MethodologyVP Communications, inc. and Peter d. hartVP Communications, Inc. and Peter D. Hart jointly produced the national public opinion survey and the study of community leaders in casino jurisdictions for the 2012 States of the States report.

Peter Hart has collaborated on the survey research associated with the AGA State of the States report for more than a decade. He is chairman of Peter D. Hart Research Associates and co-director of the NBC/Wall Street Journal poll.

For the national survey, VP Communications interviewed a base sample of 800 adult Americans from February 13-16, 2012. The margin of error for the total sample is +/- 3.5 percent. Interviews were conducted by telephone using Random Digit Dial sampling to ensure the universe was as representative as possible of the U.S. population 21 and older.

VP Communications also conducted the survey of 210 elected official and civic leaders in commercial casino communities from February 27 – March 8, 2012. Respondents, who were randomly contacted to participate in the study from a list of more than 2,300 individuals, completed the survey via phone interview. The sample included 106 elected officials, such as mayors, city and county council members, and state legislators, plus 104 non-elected civic leaders, such as chiefs of police, chamber of commerce leaders and economic development officials.

Founded in 1999 and based in Alexandria, Va., VP Communications conducts strategic public opinion research for corporate, political and trade association clients. The company specializes in quantitative, survey-based research as well as qualitative, focus group and dial testing studies.

Contact: VP Communications Andrew Smith 703-535-6553

Contact: Peter D. Hart Research Associates Peter Hart 202-234-5570

association of gaming equipment Manufacturers (ageM)/applied analysis (aa)In 2012, the Association of Gaming Equipment Manufacturers (AGEM) retained Applied Analysis (AA) to prepare an updated economic impact analysis for the global gaming supplier segment of the gaming industry.

Economic impact measures were segmented into direct impacts and indirect impacts. Direct impacts measure the effects of the specific force being considered. In this case, gaming equipment manufacturing jobs are considered direct jobs, and the wages and salaries they are paid are considered direct personal income. Indirect impacts consider how other businesses respond to the impacting condition. Employees at part suppliers, for example, are considered indirect employees to the extent their jobs are dependent, in full or in part, on the suppliers’ income generated by industry-related purchases.

To identify and model the interrelationships in the economy, IMPLAN (Impact Analysis for Planning) software and databases were used. IMPLAN is an input-output model (or econometric system) that utilizes complex economic equations to explain how the “outputs” of one industry become the “inputs” of others, and vice versa. This relationship is sometimes referred to as the “multiplier effect,” illustrating how changes in one sector of the economy can affect other sectors.

AGEM is an international trade association representing manufacturers and suppliers of electronic gaming devices, systems, table games, key components and support products and services for the gaming industry. AGEM works to further the interests of gaming equipment suppliers throughout the world. Through political action, trade show partnerships, information dissemination and good corporate citizenship, the members of AGEM work together to create benefits for every company within the organization. AGEM has assisted regulatory commissions and participated in the legislative process to solve problems and create a business environment where AGEM members can prosper while providing a strong level of support to education and responsible gaming initiatives.

Applied Analysis (AA) is a Nevada-based economic analysis and gaming consulting firm with extensive experience in preparing economic and fiscal impact analyses. AA also maintains a broad range of gaming experience and has performed work for some of the largest gaming companies in the world. AA was retained by several organizations to review and analyze the economic, fiscal and social impacts of community investments and operations. This includes impacts on employment, wages and output as well as impacts on tax collection and public service demands.

Contact: AGEM Marcus Prater 702-812-6932

appendix Continued


acknowledgmentsThe American Gaming Association would like to thank the following individuals and organizations for their assistance with the survey: the Association of Gaming Equipment Manufacturers (AGEM), Applied Analysis, Jason Pawlina, Derris Newman of the Innovation Group, Gibraltar Associates, and the industry’s state associations and regulatory agencies.

frank J. fahrenkopf, Jr.President & CEO202-552-2675

Judy PattersonSenior Vice President& Executive Director202-552-2675

dorothy r. JacksonVice President202-552-2672

Whitaker l. askewVice President202-552-2684

holly WetzelVice President of Communications202-552-2686

Keli elkinsVice President ofIndustry Relations202-552-2685

andrew SmithDirector of Research202-552-2679

brian lehmanCommunications Manager202-552-2680

Melanie rothrockExecutive Assistant& Office Manager202-552-2670

ted lynchAssistant to theSenior Vice President and Social Media Coordinator202-552-2688

Scott glickmanStaff Assistant202-552-2674

*For specific questions about the 2012 State of the States survey, please contact Andrew Smith or Holly Wetzel

induStry aSSoCiationSassociation of gamingequipment Manufacturers (ageM)Marcus Prater702-812-6932

Casino association of indianaMike Smith317-231-7030

Casino association of new Jerseybob griffin609-449-1000

Colorado gaming associationlois rice303-237-5480

deadwood (S.d.) gaming associationtom nelson605-641-0122

illinois Casino gaming associationtom Swoik217-546-0945

iowa gaming associationWes ehrecke515-267-9200

louisiana Casino associationWade duty225-344-0037

Michigan gaming associationrob russell517-507-3858

Mississippi Casino operatorsassociationlarry gregory601-965-6992

Missouri gaming associationMike Winter573-634-4001

national indian gaming associationJason giles202-546-7711

nevada resort associationVirginia Valentine702-735-4888

new york gaming associationJames featherstonhaugh518-436-1122

aga ContaCtS*

appendix Continued

state of the states - american gaming association year marks the aga’s 14th state of the states...

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