Gambling Delivers For US Economy
The positive effect of gambling on the US economy cannot be overstated. Gaming and legal sports betting generate over double-digit billions annually. In 2021, legal sports betting is only set to increase in profitability especially with the help of the coronavirus pandemic forcing tax needs on many states’ budgets. While all of this risked money is taxed differently, all of the money can be used to help the state and local governments for the contributions help fund crucial services like public education and infrastructure projects. This includes new roads and bridges and any other service that can help promote a thriving national economy. Keep in mind, this does not factor in the tax revenue generated by ancillary industries (like the hotel, restaurant, and recreation industry revenues that are directly related to casino traffic), nor do they account for the revenues from things like payroll taxes, sales taxes, and other corporate taxes.
There are more than 500 commercial casinos and nearly 500 more tribal casinos across 40 American states (and counting), and these casinos by themselves generate revenues of nearly $75 billion annually (with commercial casinos accounting for just over half of that total at roughly $41 billion). US-based manufacturers of gaming equipment ranging from slot machines to roulette tables bring in almost $6 billion from nearly 900,000 electronic gaming machines. Casinos, thanks to the world-class hotels, shows, restaurants, and attractions they bring with them, are also the destinations of choice for tourists from around the world, and those visitors spend an additional $15 billion while on vacation. In fact, consumers spend more on casinos (and associated amusements/amenities) than they did on luxury items like craft beer or tickets for movies and major concerts combined!
Gaming Supports Families, Promotes Diversity
The gaming industry alone employs nearly 740,000 Americans, which combines with the 980,000 or so jobs created by supply-line workers and employee spending to build a private sector powerhouse that is only expected to grow in years to come. According to a report released by Oxford Economics, gaming is projected to create 62,000 high-paying jobs in the next decade. Gaming, as an industry, is larger and more lucrative than the airline industry and employs a workforce twice the size of Washington, DC’s, public sector.
Gambling is all about numbers, and when it comes to employee compensation, those numbers speak for themselves. The gaming industry provides $17.5 billion in wages, tips, and benefits to workers annually, representing a total of roughly $73 billion in economic impact to help support hardworking, middle-class American families, with opportunities to bring home salaries higher than the national average.
Gaming also offers a plethora of career opportunities for its increasingly diverse workforce, more than 45% of which comes from a minority background and nearly half of which are women – again, both higher than the national average. Additionally, when one thinks of gambling, it is almost impossible not to think of the industry’s standard-bearers for diversity inclusion: tribal casinos. Native American-owned casinos returned record-setting numbers in recent years, and the trend seems ever upward. Generally speaking, tribal casinos account for about $34 billion in revenue each year.
Gaming: Helping Build America’s Middle Class
The US casino gaming industry promotes the growth of the nation’s economy, and the way it does so is twofold: by financially supporting strong communities and by empowering employees to further their careers, continue their educations, and provide for their families.
Gaming contributes to local communities in several key areas, but this is perhaps nowhere more apparent than with regard to the wide-ranging public services directly benefiting from funding provided by taxes on gambling. From affordable prescription drug programs for seniors to greater access to education options for pre-kindergarten students and ongoing education opportunities for workers, gaming plays a tremendous part in strengthening local communities across America. Year over year, nearly all of the 24 states with commercial gaming report increases in annual gross revenue, with upwards of $10 billion of that infused into state and local government budgets in the form of tax revenues. In this regard, gaming tax revenue grows at a clip of about 2%-3% per annum.
The positive impact of the gaming industry on host communities extends well beyond tax contributions and increased consumer spending in the towns, cities, and regions that are home to casinos, racetracks, card rooms, and the like. Gaming companies continue to demonstrate their commitment to their local communities by supporting employee education initiatives. Employees are encouraged to pursue ongoing education and the kind of vocational skill development required in today’s high-tech, increasingly globalized economy. Thanks to these developments, the gambling industry in all its facets is truly becoming a gateway to the American middle class and beyond for its workers.
Legal Sports Betting Industries Helping Post COVID-19 Economies
States with legal sports betting industries have had positive effects in post-COVID-19 environments. While venues and sports were both shut down for months in 2020, mobile sportsbooks still offered revenue for the economy of states that offered these platforms. And when sports and venues opened back up, people got back to work, and wagers started flooding in on countless sporting events taking place to make up for lost time. All of these profits and revenue helped states that were ravaged financially by the Coronavirus Pandemic to keep their heads above water with the industry’s contributions to the economy. Even in times of global pandemics, legal sports betting markets have proved to be a welcomed addition in helping to impact economies in the most positive ways.
Future Challenges Mean More Opportunities To Thrive
Though the gaming industry has doubtlessly grown in recent years, this growth unfortunately is not distributed equally across all the states with commercial and tribal casinos. Increasingly intense competition between states offering casino gambling contributes to growth in some states and declines in others, but regulatory issues are also a major source of difficulty for casino companies, highlighting the need for comprehensive reforms across the industry. This affords policymakers and community stakeholders nationwide an unprecedented opportunity to more closely align their states’ regulatory environments to afford casino operators the kind of freedom they need to meet the changing demands of a competitive marketplace.
Furthermore, an increased emphasis has to be placed on confronting and counteracting the occurrences of “illegal” gambling that hurts the industry and the economy. Gray market and black market sports betting, for example, constitute an estimated loss for the US gambling industry of more than $400 billion per year, making it the worst offender of them all. Of course, with the elimination of the Professional and Amateur Sports Protection Act (PASPA, 1992), every state is now free to establish its own sports wagering rules and regulations. This, in time, will bring much of that otherwise lost money back into a taxable form. Everyone stands to benefit from even greater tax revenues and other gambling-related income sources, which is why most states are rapidly pursuing sports betting initiatives.
It is no longer a question that innovation is key to the gaming industry’s continued success. This is apparent across the gambling landscape, from the ascendance of video game-derived design elements in slot machines and the increased prominence of electronic sports wagering and online fantasy sports gaming, all of which have sparked new and exciting developments among gaming operators, designers, and manufacturers. However, an emphasis on technological advancement in gaming can also play a key role in improved regulatory practices, giving authorities and the public the assurances they need, while lowering costs for operators and taxpayers alike.
Sports Betting Effects On Economics FAQs
How Do States Make Money Off Of Sports Betting?
There are a few ways that state profit from sports betting. The prime way is through taxes. Every state with regulated sports betting gets a percentage on the betting handle from sportsbooks. There is also the application fee for the gambling licenses which usually have to be renewed every 2-4 years. These cost in the six figures every time. There is also revenue from tourism. It has been proven that there is an uptick in tourists’ dollars when there are active casinos and sportsbooks in a state. The state collects taxes from hotels, restaurants, and other locales that sports bettors are drawn towards.
Why Do Some States Make More Money From Sports Betting Than Others?
Because each state is able to legalize and regulate sports betting to their own standards, every state is set up in a different manner. Every state that has legalized is in control of their own jurisdictions. Factors such as population, local collegiate as well as professional teams, and regulations can all alter how much money if made from sports betting. However, the biggest reason states can make millions more than their neighbors is based on the taxation rate. Some are as high as 50% of the sportsbooks’ revenue while others only collect around 7% of the revenue.
How Do Casinos And Sportsbooks Help The Real Estate Market?
It is believed that the addition of more and more casinos only decreases the real estate market in the area. However, this is a broad statement that doesn’t run evenly in every area. Cities that host many sportsbooks like Biloxi and Atlantic City have lower housing costs but areas like Las Vegas and Philadelphia can be expensive to live in. Another aspect to think about is owning and renting. If a homeowner can rent out their dwelling to potential casino goers, any change in the housing market can be mediated by renting.
What Do States Spend Their Sports Betting Tax Revenue On?
States spend their sports betting revenue on a multitude of things. The money is mostly divided into the local area that the casino and online gambling operation is located. This money is used to fund schools, fix roads, and give pay increases to city workers. The revenue from sports betting is spent bettering the city and is one of the prime arguments pro sports betting legislators use when they try and push forth a sports wagering bill. But each state can allocate these funds in a way that best suits them. For example, Colorado state officials use the tax revenue to fund the state’s Water Plan.