What Happens to Casino Revenue If Casinos Close?
Casinos and racinos generate billions of dollars in annual revenue for their states. But what happens to these revenues if casinos close? The blue line in Appendix Table 13 shows state-by-state casino and racino tax and fee revenues. The main types of gambling in these states are commercial casinos, pari-mutuel wagering, video gaming machines, and lotteries. The percentage of casino tax and fee revenue declined in each state from 2008 to 2015, but the nation as a whole experienced a 0.3 percent compound annual growth rate.
As a result, the number of visitors to casinos has dropped. Although the number of Americans visiting Las Vegas is declining, the revenue from casinos is still rising. The state of Nevada reported a $1 billion gambling revenue in April 2021, up 11% from April 2019. This increase is due to fewer visitors than the previous year, though. Mass vaccination has encouraged more people to spend money, which has helped casinos in Las Vegas. Still, the number of tourists visiting the city has decreased by about two-thirds from its peak in April.
The state’s casinos have enjoyed record revenues in recent years. Revenue from gambling in casinos in Pennsylvania topped $68 billion in April, representing about $1,300 per person. In addition, nearly 93 percent of the money wagered on casino games is returned to players in the form of winnings. In total, US casino revenues are $26 billion, with Nevada’s casinos generating $80 billion in tax receipts in April. Sports wagering alone generated $232.9 million in operator revenue and over $35 million in taxes through April.
Many casinos also rent retail space. This helps fill the spaces between restaurants and nightclubs. This makes it easier for visitors to shop for high-end goods without leaving the casino. Additionally, many rural communities promote casino tourism in order to attract more visitors. In the long run, this may result in greater retail sales in the surrounding community. However, the casinos’ revenue may not be reflected in the local economy. If they are successful, they will become the centerpiece of the area.
The state’s racino revenue fluctuates from year to year. The growth in racino revenue varies widely by state. The percentage of growth from fiscal year 2008 to 2015 is roughly eighty percent. However, seven states report declines in revenue. The largest declines were in Iowa and Louisiana, with the decrease of nearly six percent in those three states. The only state with the highest increase in casino revenue was Ohio, where the opening of two racinos in fiscal 2015 offset the sharp decline in revenue from slots and EGD.
While Las Vegas casinos are well-known for their big profits, smaller casino properties generate only a few hundred million dollars annually. In the United States, the average casino revenue is $1.8 million USD per day, with 634.5 thousand dollars attributed to winnings and rented rooms. Other sources of revenue include food and beverage sales, rental of hotel rooms, and additional services. The revenue generated by a casino depends on how much money is bet on each type of game.