State of the States The AGA Survey of CASino entertainment

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1 State of the States The AGA Survey of Casino Entertainment

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3 President s Message 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 14 th 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 2012 AGA Survey of Casino Entertainment i

4 Notes Statistical Notes The 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 (statenegotiated), 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 Polling Notes Figures reported in the polling data may not add up to 100 percent because of rounding. ii 2012 AGA Survey of Casino Entertainment

5 Table of Contents Executive Summary... 2 National Economic Impact of Casino Entertainment... 4 AGEM Spotlight on Gaming Equipment Manufacturers... 9 State-By-State Economic Impact: Commercial Casinos...11 Colorado Delaware Florida Illinois Indiana Iowa Kansas Louisiana Maine Maryland Michigan Mississippi Missouri Nevada New Jersey New Mexico New York Oklahoma Pennsylvania Rhode Island South Dakota West Virginia 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...36 Glossary of Gaming Terms...36 Index of Charts...37 Methodology...38 Acknowledgements AGA Survey of Casino Entertainment 1

6 Executive Summary National Economic Impact of Casino Entertainment The 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 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 ( 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 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 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 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 Machines After two years of contraction, the gaming equipment manufacturing sector posted gains in revenue, employment and wages during 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 AGA Survey of Casino Entertainment

7 Executive Summary Continued 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 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 In Casinos 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 threequarters (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 threequarters (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 Experience According 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 threequarters (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 Entertainment According 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 AGA Survey of Casino Entertainment 3

8 National Economic Impact of Casino Entertainment Casino Locations by Category 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 In 2011, U.S. commercial casinos: Employed 339,098 people Paid wages of $12.9 billion Contributed $7.93 billion in direct gaming taxes Earned $35.64 billion in gross gaming revenue Casinos per State (as of Dec. 31, 2011) STATE Alabama 3 * Alaska 2 * Arizona 25 California Colorado 40 º 2 Connecticut 2 Delaware 3 n Florida Idaho 8 Illinois 10 Indiana 11 2 Iowa Kansas 2 4 Louisiana ,159 Maine 1 Maryland 1 n 1 n Michigan 3 24 Minnesota 38 2 Mississippi 30 3 Missouri 12 1 Montana ,549 2 Nebraska 6 * Nevada ,010 3 New Jersey 11 New Mexico 5 22 New York 9 n 7 North Carolina 2 North Dakota 10 Oklahoma Oregon 9 2,323 n Pennsylvania 4 6 Rhode Island 2 n South Dakota 35 º 11 1,498 2 Texas 1 * Washington West Virginia 1 4 n 1,552 n Wisconsin 29 Wyoming 4 Total ,091 Number of States * Class II games only º Limited-stakes gaming n Video lottery terminals 1 Refers to number of non-casino locations in states where electronic gaming devices are present 2 Number during FY Locations have 15 or fewer machines Sources: American Gaming Association, National Indian Gaming Commission, State Gaming Regulatory Agencies AGA Survey of Casino Entertainment

9 National Economic Impact of Casino Entertainment Continued U.S. Consumer Spending on Commercial Casino Gaming, Compared with figures from 2010, total consumer spending at commercial casinos increased by 3.0 percent in 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. $ Billions $32.77 $35.27 $37.52 Commercial Casinos $36.22 $35.64 $34.60 $34.28 $ $28.72 $ Sources: State Gaming Regulatory Agencies State-by-State Consumer Spending On Casino Gaming, 2010 vs STATE % Change Colorado $ million $ million -1.3% Delaware $ million $ million -3.3% Florida $ million $ 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 $ million % 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 $ million $ million +0.6% New York $1.09 billion $1.26 billion +15.6% Oklahoma $99.88 million $ million +6.4% Pennsylvania $2.49 billion $3.02 billion +21.3% Rhode Island $ million $ million +7.5% South Dakota $ million $ million -5.0% West Virginia $ million $ 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 The largest increases came from states where new casinos opened during 2011 or had a full year of operations for the first time Maryland ( 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 AGA Survey of Casino Entertainment 5

10 National Economic Impact of Casino Entertainment Continued Commercial Casino Spending vs. Other Spending Choices, 2011 $ Billions 1. Commercial Casinos 2. Consumer Electronics 3. Cable Television 4. Outdoor Equipment $ U.S. Box Office Receipts $ U.S. Music Revenue $7.0 $35.65 $97.6 $186.4 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 STATE % Change Colorado $ million $ million -4.5% Delaware $ million $ million -5.3% Florida $ million 1 $ million -6.4% Illinois $ million $ million +5.0% Indiana $ million $ million -3.3% Iowa $ million $ million +5.3% Kansas $9.48 million $13.08 million +38.0% Louisiana $ million $ million +0.2% Maine $30.16 million $29.06 million -3.7% Maryland $15.87 million $89.53 million % Michigan $ million $ million +3.0% Mississippi $ million $ million -3.9% Missouri $ million $ million -0.3% Nevada $ million $ million +3.6% New Jersey $ million $ million -9.1% New Mexico $64.31 million $64.72 million +0.6% New York $ million $ million +17.9% Oklahoma $16.55 million $18.30 million +10.6% Pennsylvania $1.328 billion $1.456 billion +9.6% Rhode Island $ million 2 $ million % South Dakota $17.22 million $16.36 million -5.0% West Virginia $ million 1 $ million +6.4% 1 Data changed from what was reported in 2011 State of the States. 2 FY 2010 Source: State Gaming Regulatory Agencies 3 FY 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 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 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-bystate economic impact section on pages AGA Survey of Casino Entertainment

11 National Economic Impact of Casino Entertainment Continued Commercial Casino Jobs by State, 2010 vs State % Change Nevada 1 175, , % New Jersey 34,145 32, % Mississippi 24,707 23, % Louisiana 16,873 17, % Indiana* 14,144 14, % Pennsylvania* 12, , % Missouri 4 11, , % Iowa 8,915 9, % Colorado 9,589 9, % Illinois 6,892 7, % Michigan 8,067 7, % New York 3, , % West Virginia* 4,528 4, % Delaware* 3,245 2, % Florida* 2, , % South Dakota 6 1, , % New Mexico* 1, , % Oklahoma % Maine % Maryland* % Kansas* 303 N/A N/A Rhode Island* NA N/A N/A Total 340, , % *One or more properties from these states declined to participate in data gathering; see state-by-state data charts for more information. 1 Figure for locations with gross gaming revenue in excess of $1 million for FY Figure for locations with gross gaming revenue in excess of $1 million for FY data was used for one or more properties that did not provide 2011 data. 4 FY FY CY CY 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 N/A 1-10,000 10,001-20,000 20,001-30,000 30,001-40, ,000+ Commercial Casino Wages, $ Billions $11.0 $11.8 $12.6 $12.2 $13.3 $14.1 $13.8 $13.1 $13.3 $ Sources: State Gaming Regulatory Agencies, Individual Properties 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 AGA Survey of Casino Entertainment 7

12 National Economic Impact of Casino Entertainment Continued Top 20 U.S. Casino Markets, Las Vegas Strip, Nev. $6.069 billion 2. Atlantic City, N.J. $3.318 billion 3. Chicagoland, Ill./Ind. $1.934 billion 4. Detroit, Mich. $1.424 billion 5. Connecticut $1.346 billion 6. St. Louis, Mo./Ill. $1.114 billion 7. Philadelphia, Pa. $1.090 billion 8. Biloxi, Miss. $ million 9. Tunica/Lula, Miss. $ million 10. Boulder Strip, Nev. $ million 11. Kansas City, Mo. (includes St. Joseph) $ million 12. Shreveport, La. $ million 13. Lake Charles, La. $ million 14. Reno/Sparks, Nev. $ million 15. New Orleans, La. $ million 16. Pittsburgh/Meadow Lands, Pa. $ million 17. Lawrenceburg/Rising Sun/Belterra, Ind. $ million 18. Black Hawk, Colo. $ million 19. Yonkers, N.Y. $ million 20. Charles Town, W.V. $ million Source: The Innovation Group 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 Detroit, Mich. also rose in the rankings this year, moving to fourth after ranking fifth during Top 10 U.S. Racetrack Casino Markets, 2011 Top U.S. Casino Markets, Philadelphia, Pa. $ million 2. Yonkers, N.Y. $ million 3. Charles Town, W.V. $ million 4. Providence, R.I. $ million 5. Indianapolis, Ind. $ million 6. Dade County, Fla. $ million 7. Dover/Harrington, Del. $ million 8. Grantville, Pa. $ million 9. Meadow Lands, Pa. $ million 10. Wilkes-Barre, Pa. $ 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 Top 20 U.S. Casino Markets Top 10 U.S. Racetrack Casino Markets AGA Survey of Casino Entertainment

13 Spotlight on GAMING EQUIPMENT MANUFACTURERS After two years of contraction, the gaming equipment manufacturing sector posted gains in revenue, employment and wages during 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, $ Billions $8.8 $9.4 $11.2 $11.9 $11.9 $ $11.4 $12.1 Direct $10.8 $ Indirect $11.6 $ 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, Employees 60,000 40,000 20, ,800 27,200 20,500 28,200 21,600 29,600 21,800 30,000 Direct 21,400 29,400 Indirect 22,100 30, Source: Association of Gaming Equipment Manufacturers (AGEM) 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, $Billions Direct Indirect $1.5 $1.4 $1.4 $1.4 $ $ $1.8 $1.9 $2.0 $2.1 $2.1 $ Source: Association of Gaming Equipment Manufacturers (AGEM) 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 AGA Survey of Casino Entertainment 9

14 AGEM Spotlight on Gaming Equipment Manufacturers Continued Gaming Equipment Manufacturers with Employees Covered by Employersponsored Health Care Plans Less than 50% of employees 50% to 75% of employees More than 75% of employees 76.3% Purchases Made from Local Vendors by Gaming Equipment Manufacturers 1% to 10% 11% to 25% 26% to 50% More than 50% 28.9% 28.9% 23.7% 18.4% 7.9% 15.8% Source: Association of Gaming Equipment Manufacturers (AGEM) 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. Source: Association of Gaming Equipment Manufacturers (AGEM) 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 onequarter (23.7 percent) make between 25 and 50 percent of their purchases locally. Gaming Equipment Manufacturers Market Expectations for the Next 12 Months Historical Trend in Expectations of Market Improvement for the Next 12 Months Worsen 86.8% Stay About the Same Improve 86.8% 75.0% 73.7% 7.9% 5.3% 8.4% 10.7% Source: Association of Gaming Equipment Manufacturers (AGEM) 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 Source: 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 AGA Survey of Casino Entertainment

15 State-by-State Economic Impact: Commercial Casinos The 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 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 ( 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 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 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 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 AGA Survey of Casino Entertainment 11

16 State-By-State Economic Impact Continued COLORADO Current # of Operating Casinos 40 Casino Format Land-based Casino Employees 9,263 Casino Employee Wages $ million (includes tips and benefits) Gross Casino Gaming Revenue $ million Gaming Tax Revenue $ million How Taxes Spent Local communities, historic preservation, community colleges, general fund Legalization Date 1990 First Casino Opening Date 1991 State Gaming Tax Rate Graduated tax rate with a maximum tax of 20% on gaming revenue Mode of Legalization Statewide vote, legislative action Visitor Volume Data not available Sources: Colorado Gaming Association, Colorado Division of Gaming Central City Black Hawk Cripple Creek Colorado s 40 casinos saw their 2011 total gross gaming revenue figure decline 1.3 percent compared to Direct gaming taxes in the state experienced a drop of 4.5 percent. DELAWARE Current # of Operating Casinos 3 Casino Format Casino Employees 2,730 Casino Employee Wages Gross Casino Gaming Revenue Gaming Tax Revenue How Taxes Spent Legalization Date 1994 First Casino Opening Date 1995 Racetrack casinos with publicly run video lottery terminals and table games with distributions to operators $ million (includes tips and benefits) $ million $ million General fund Revenue Retained by Operator 43.89% Mode of Legalization Visitor Volume Legislative action Data not available Note: Delaware wage and employment data includes two of three properties, as one declined to participate in the data collection. Sources: Delaware Lottery, individual properties Wilmington Dover Harrington Even though 2011 was Delaware s first full year with table games, regional competition from casinos in Maryland and Pennsylvania drove a 3.3 percent decline in gaming revenue and a 5.3 percent decrease in gaming taxes compared to 2010 figures AGA Survey of Casino Entertainment

17 State-By-State Economic Impact Continued FLORIDA Current # of Operating Casinos 5 Casino Format Casino Employees 2,601 Casino Employee Wages Gross Casino Gaming Revenue Gaming Tax Revenue How Taxes Spent Legalization Date 2006 First Casino Opening Date 2006 State Gaming Tax Rate 35% Mode of Legalization Visitor Volume Racetrack casinos with slot machines $71.79 million (includes tips and benefits) $ million $ million Statewide education Statewide referendum, local option vote, legislative action Data not available Note: Florida wage and employment data includes four of five properties, as one declined to participate in data collection 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 Miami Gardens Compared to 2010, Florida s commercial casinos experienced a significant 16.0 percent increase in gaming revenue in 2011, but since 2011 was the first full year with a 35 percent gaming tax rate, the state saw tax receipts drop by 6.4 percent compared to the previous year. ILLINOIS Current # of Operating Casinos 10 Casino Format Riverboat Casino Employees 7,911 Casino Employee Wages $ million (includes tips and benefits) Gross Casino Gaming Revenue $1.477 billion Gaming Tax Revenue $ million How Taxes Spent Education assistance, local government Legalization Date 1990 First Casino Opening Date 1991 State Gaming Tax Rate Graduated tax rate from 15% to 50% of gross gaming revenue, $2-3 admissions tax Mode of Legalization Legislative action Visitor Volume million Sources: Illinois Casino Gaming Association, Illinois Gaming Board Rock Island Alton Elgin Des Plaines Aurora Joliet E. Peoria E. St. Louis Metropolis The July opening of Illinois 10th riverboat The Rivers Casino in Des Plaines drove increases in both gaming revenue (+8.0 percent) and tax receipts (+5.0 percent). Employment in Illinois also experienced a bump from the new casino, with a 14.8 percent increase compared with 2010 figures AGA Survey of Casino Entertainment 13

18 State-By-State Economic Impact Continued INDIANA Current # of Operating Casinos 13 Casino Format Riverboats, land-based and racetrack casinos with slots and table games Casino Employees 14,079 Casino Employee Wages $ million (includes tips and benefits) Gross Casino Gaming Revenue $2.721 billion Gaming Tax Revenue $ million How Taxes Spent Economic development, local government Legalization Date 1993 First Casino Opening Date 1995 State 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 revenue Mode of Legalization Local option vote, legislative action Visitor Volume million Note: Indiana wage and employment data includes 12 of 13 properties, as one declined to participate in the data collection. Gary E. Chicago Hammond Evansville French Lick Michigan City Anderson Shelbyville Lawrenceburg Rising Sun Markland Dam Elizabeth Indiana, the nation s third-largest commercial gaming state by revenue, saw both its gross gaming revenue (-2.5 percent) and its gaming tax revenue (-3.3 percent) decline in 2011 compared to 2010 data. Sources: Casino Association of Indiana, Indiana Gaming Commission IOWA Current # of Operating Casinos 18 Casino Format Casino Employees 9,384 Casino Employee Wages Gross Casino Gaming Revenue Gaming Tax Revenue How Taxes Spent Legalization Date 1989 First Casino Opening Date 1991 State Gaming Tax Rate Mode of Legalization Visitor Volume Riverboat, land-based and racetrack casinos with slots and table games $ million (includes tips and benefits) $1.424 billion $ million Infrastructure, schools and universities, the environment, tourism projects, cultural initiatives, general fund 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 million Local option vote, legislative action million Sources: Iowa Gaming Association, Iowa Racing and Gaming Commission Larchwood Northwood Emmetsburg Sioux City Osceola Council Bluffs Waterloo Altoona Riverside Davenport Marquette Dubuque Burlington Clinton Bettendorf In June, Grand Falls Casino Resort opened in Larchwood, Iowa becoming the state s 18th commercial casino. The new property helped spur increases in gaming revenue (+3.7 percent), tax revenue (+5.3 percent) and gaming employment (+5.3 percent), compared to 2010 figures AGA Survey of Casino Entertainment

19 State-By-State Economic Impact Continued Kansas Current # of Operating Casinos 2 Casino Format Land-based (state-owned) Casino Employees N/A Casino Employee Wages N/A Gross Casino Gaming Revenue $48.48 million Gaming Tax Revenue $13.08 million How Taxes Spent State debt reduction, infrastructure improvements, property tax relief, problem gambling treatment Legalization Date 2007 First Casino Opening Date 2009 State Gaming Tax Rate 22% state tax, 3% local government tax and 2% tax to fund problem gambling treatment Mode of Legalization Legislative action, local option vote Visitor Volume Data not available Note: Both properties in Kansas declined to provide employment and wage data. Dodge City Mulvane The second state-owned casino opened in Mulvane, Kan. in December 2011 and was part of the reason that Kansas experienced year-over-year increases in gaming revenue (+28.3 percent) and tax receipts (+38.0 percent). Sources: Kansas Lottery, individual property LOUISIANA Current # of Operating Casinos 18 Casino Format Riverboat, land-based and racetrack casinos with slots and table games Casino Employees 17,207 Casino Employee Wages $ million (includes tips and benefits) Gross Casino Gaming Revenue $2.374 billion Gaming Tax Revenue $ million How Taxes Spent General fund, city of New Orleans, public retirement systems, state capital improvements, rainy day fund Legalization Date 1991 First Casino Opening Date 1993 State 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 parish Mode of Legalization Local option vote, legislative action Visitor Volume million 1 Riverboat casinos pay an additional 4 percent to 6 percent to local governing authorities under the terms of local boarding fee agreements. Bossier City Shreveport Opelousas Vinton Baton Rouge Lake Charles New Orleans Amelia Kenner The economic impact of Louisiana s commercial casinos held steady in 2011, with a negligible (+0.01 percent) increase in gross gaming revenue and a slight (+0.2 percent) increase in gaming tax revenue versus 2010 figures. Sources: Louisiana Casino Association, Louisiana Gaming Control Board, individual properties 2012 AGA Survey of Casino Entertainment 15

20 State-By-State Economic Impact Continued MAINE Current # of Operating Casinos 1 Casino Format Racetrack casino with slot machines Casino Employees 364 Casino Employee Wages $10.83 million (includes tips and benefits) Gross Casino Gaming Revenue $59.45 million Gaming Tax Revenue $29.06 million How Taxes Spent Education, health care, agriculture, gambling control board administration, city of Bangor Legalization Date 2004 First Casino Opening Date 2005 State 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 Bangor Mode of Legalization Local option vote, legislative action Visitor Volume Data not available Sources: Maine Gambling Control Board, Penn National Gaming, Inc. Bangor When compared with 2010 figures, Maine s gross gaming revenue dropped by 3.6 percent in 2011, and its gaming tax receipts fell by 3.7 percent year-over-year. Maryland Current # of Operating Casinos 2 Casino Format Casino Employees 290 Casino Employee Wages Gross Casino Gaming Revenue Gaming Tax Revenue How Taxes Spent Legalization Date 2008 First Casino Opening Date 2010 Revenue Retained by Operator 33% Mode of Legalization Visitor Volume Land-based, slots-only casinos with publicly run video lottery terminals with distributions to operators $9.86 million (includes tips and benefits) $ million $89.53 million Education trust fund, local impact grants, small, minority- and women-owned businesses Constitutional referendum Data not available Note: Maryland wage and employment data includes one of two properties, as one declined to participate in the data collection. Perryville Berlin The first full-year of operations at Maryland s first casino in Perryville, Md. and the opening of its second property in Berlin, Md. led to the collection of four times the amount of gaming ( percent) and tax ( percent) revenue in 2011 as was earned in Sources: Maryland Lottery, individual properties AGA Survey of Casino Entertainment

21 State-By-State Economic Impact Continued MICHIGAN Current # of Operating Casinos 3 Casino Format Casino Employees 7,303 Casino Employee Wages Gross Casino Gaming Revenue Gaming Tax Revenue How Taxes Spent Legalization Date 1996 First Casino Opening Date 1999 State Gaming Tax Rate Mode of Legalization Visitor Volume Land-based $ million (includes tips and benefits) $1.424 billion $ million Public safety, capital improvements, youth programs, tax relief, neighborhood development and improvement, infrastructure repair and improvement 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 annually Local advisory vote, statewide voter referendum, legislative action Data not available Sources: Michigan Gaming Control Board, individual properties Detroit Michigan s commercial casino market, which includes three properties in Detroit, continued to experience growth in 2011 with a 2.9 percent increase in gross gaming revenue and a 3.0 percent increase in gaming tax contributions compared to 2010 figures. MISSISSIPPI Current # of Operating Casinos 30 Casino Format Casino Employees 23,721 Casino Employee Wages Gross Casino Gaming Revenue Gaming Tax Revenue How Taxes Spent Legalization Date 1990 First Casino Opening Date 1992 State Gaming Tax Rate Mode of Legalization Visitor Volume Dockside, land-based $ million (includes tips and benefits) $2.239 billion $ million Housing, education, transportation, health care services, youth counseling programs, local public safety programs Graduated tax of 8% on gaming revenues; up to 4% additional tax on gaming revenues may be imposed by local governments Legislative action, local option votes million Sources: Mississippi Casino Operators Association, Mississippi Gaming Commission Greenville Tunica/Robinsonville Lula Vicksburg Natchez Bay St. Louis Biloxi Gulfport Mississippi River flooding that forced many riverboat casinos in northern Mississippi to close during April and May contributed to declines in visitor volume, gaming revenue (-6.3 percent) and tax contributions (-3.9 percent) in AGA Survey of Casino Entertainment 17

22 State-By-State Economic Impact Continued MISSOURI Current # of Operating Casinos 12 Casino Format Riverboat Casino Employees 10,435 (FY 2011) Casino Employee Wages $ million (includes tips and benefits) (FY 2011) Gross Casino Gaming Revenue $1.805 billion Gaming Tax Revenue $ million How Taxes Spent Education, local public safety programs, compulsive gambling treatment, veterans programs, early childhood programs Legalization Date 1993 First Casino Opening Date 1994 State Gaming Tax Rate 21% tax on gross gaming revenue; $2 per patron admission fee, per excursion, split between home dock community and the state Mode of Legalization Statewide vote, local option vote, legislative action Visitor Volume million Sources: Missouri Gaming Association, Missouri Gaming Commission St. Joseph La Grange Riverside North Kansas City St. Charles Kansas City St. Louis Boonville Maryland Heights Caruthersville A full year of operations at River City Casino in St. Louis helped Missouri s statewide gross gaming revenues increase slightly (+1.1 percent) compared to 2010 figures, but gaming tax revenue inched downward (-0.3 percent) when contrasted with 2010 statistics. NEVADA Current # of Operating Casinos 256 (FY 2011) Casino Format Land-based Casino Employees 174,381 (FY 2011) Casino Employee Wages Gross Casino Gaming Revenue Gaming Tax Revenue How Taxes Spent Legalization Date 1931 First Casino Opening Date 1931 State Gaming Tax Rate Mode of Legalization Visitor Volume $7.461 billion (includes tips and benefits) (FY 2011) $ billion $ million Education, local governments, general fund, problem gambling programs 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 burden Legislative action million Sources: Nevada Gaming Control Board, Nevada Commission on Tourism McDermitt Winnemucca Reno Carson City Gardnerville Lake Tahoe Elko Jackpot Battle Mtn. Lovelock Fallon Hawthorne Wells West Wendover Ely Beatty Tonopah Mesquite Amargosa Valley N. Las Vegas Indian Spgs. Las Vegas Pahrump Henderson Primm Searchlight Laughlin From 2010 to 2011, visitor volume increased by more than one million in Nevada, helping to drive increases in gaming revenue (+2.9 percent) and tax revenue (+3.6 percent). Employment, which tends to be a lagging indicator of recovery, declined slightly by 0.4 percent AGA Survey of Casino Entertainment