Gambling Sector Brought $261 Billion into US Economy in 2017

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The gambling sector grew steadily in the US in 2017, as shown in the latest report from the American Gaming Association (AGA). It brought more than $261bn (£200bn) into the US economy during that year.

Results of this report

The report, created by Oxford Economics, shows a 9.5% increase in gambling-related business sales in the economy between 2014 and 2017.

Almost $44bn (£33.7bn) of that went to various local, state and federal authorities in taxes, including almost $11bn (£8.4bn) in gambling taxes.

This shows how important gambling-related revenue can be for the economy. One of the biggest reason many states are legalizing sports betting is to further enhance tax revenues. Even states that have resisted gambling for many years are having their heads turned by these figures. Many of their residents end up crossing state lines to gamble, which drains money out of the local economy.

A wide variety of causes benefit from these tax revenues, such as education, hospitals, and public safety. The main reason for the increase in these figures compared to 2014 is that states have changed their gambling laws to allow more kinds of gambling. Also, the casino industry has embraced emerging market opportunities.

There are now almost 1.8 million people employed in the gambling sector, and they earn a total of about $74bn (£56.6bn). This makes gambling the 28th ranked non-farming related source of employment in the US.

Native American casinos had total revenues of $33.7bn (£25.8bn) and commercial casinos brought in almost $56bn (£42.8bn). Of the total casino revenue of $89.4bn (£68.4bn), 82% came directly from gaming activities; the rest was from hotel rooms and food and drink establishments.

Total revenue figure breakdown

The revenue that has been brought into the US economy by the gambling sector is mainly made up of three parts: direct impacts, indirect impacts, and induced impacts.

Direct impact is money that has been spent at a physical casino location or any ancillary spending that has been conducted by visitors to this casino, the revenues that gaming manufacturers have made, and the money that is paid to labor to provide these services. Therefore, a casino worker’s wages fall into the direct impact category.

Indirect impact is money that goes to the supplier industry downstream; this is sometimes called supply chain impact. This could be the inputs needed to run a casino, such as food, drink, utilities, marketing, technical, legal, cleaning, financial services, etc.

Induced impact is the impact on the economy that results when casino workers spend their wages on food, fuel, rent, etc.

Of the $261bn that impacted the US economy in 2017, $109bn (£83.4bn) was through direct impact, $67bn (£51.2bn) through indirect impact, and $85bn (£65bn) through induced impact.

Comparing with other sectors

An interesting way to put these figures into perspective is to compare them with the figures from other industries.

In the recreation sector, casinos are second on the list in employment, behind only fitness.

In the retail sector, they are third behind home improvement centers and gas stations, respectively. In consumer spending per product type, they are fourth in the rankings with $89, compared to jewelry and watches ($91), hotels ($104), and computers and associated accessories and software ($125).

Consumer spending in the gambling sector has been steadily increasing over the past two decades, except for a slight dip when the Great Recession hit. In 2001, the figure for consumer spending on casino gaming was just over $40bn (£30.6bn), and now it is close to double that at $73bn (£55.8bn) in 2017.

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