AGA Study Shows Scale of Gambling Industry in America

Everyone knows that casinos are big business. However, few would probably suspect that they’re nearly large enough to make up a significant chunk of the United States economy. But that’s just what the American Gaming Association found in a recent study about gambling’s place in the US economy.

According to the AGA study, casino gambling generated about $125 billion in economic activity in 2012 – a total that’s close to 1% of the $14.5 trillion economy on the United States. The study found that the 566 casinos in the country also created 820,000 chips and took in nearly $50 billion in revenues from visitors.

“There is no doubt the commercial casino industry is a significant and vital part of our nation’s economy,” Frank J. Fahrenkopg, Jr., CEO of the AGA said in a statement about the study.

The AGA hopes that the report will shine more light on the economic impact that casinos can have on both local and national economies. Currently, casino battles are ongoing in several states, including Massachusetts, Maine, and Florida.

However, anti-gambling advocates pointed out that the report did not speak to any of the costs associated with gambling, such as losses by compulsive gamblers, or increases in criminal activity related to problem gambling.

In the study, both direct revenues collected by the casino industry and indirect spending were considered. Indirect spending includes industries that are supported by casinos, or revenues that are driven by casinos but not directly associated with gambling. These often include revenues generated by travel, hotels, restaurants, and entertainment venues near casino locations (venues inside of casinos were included in the direct revenues portion of the report).

The report also pointed out the impact of casino taxation. Casinos paid nearly $16 billion in taxes in 2010, for an effective tax rate of about 32% on their direct earnings – a figure significantly higher than the 27% overall rate of taxation in the United States.. In states where casino gambling exists, these taxes make up around 2% of state budgets.