State of the States The AGA Survey of Casino Entertainment

State of the States The AGA Survey of Casino Entertainment

PRESIDENT S MESSAGE The American Gaming Association (AGA) is pleased to present the 2007 State of the States: The AGA Survey of Casino Entertainment. As in past years, the 2007 State of the States provides a comprehensive look at the U.S. commercial casino industry, from its national impact to contributions to the state and local communities where we operate. The survey also includes detailed national and state-by-state economic data on the expanding racetrack casino sector, which continues to represent the fastestgrowing segment of the commercial gaming industry. The data presented in this report point to a mature industry still enjoying incredible growth potential. It points to continued rebirth on the U.S. Gulf Coast, as well as expansion into new jurisdictions and growth in existing commercial casino states. Wherever the industry operates, this report shows it has brought with it tremendous employment opportunities, tax revenues and tourism dollars that help our communities grow. In addition to economic impact data, this report includes in-depth statistics on casino visitation, as well as a profile of the American casino gambler. It also includes the results of public opinion polling that reveals some of the habits of casino gamblers and confirms that overall acceptability of casino gambling remains high. This year s survey also takes a closer look at the recovery along the U.S. Gulf Coast through a unique poll of high-level gaming industry, community, government and business leaders from the region. The survey shows there still are significant challenges to overcome, but there is tremendous optimism among survey respondents with regard to the potential for growth in the region, and there is every indication that the commercial gaming industry will be a leading force in the Gulf Coast s revitalization. This year s survey includes a number of additional features, including an expanded poker section, a new section on sports betting, a detailed chart of various forms of gaming across the country and a pocket guide to key facts presented in the survey. Our goal is to make the State of the States survey your comprehensive information resource on the U.S. commercial casino industry, and we think this year s report fulfills that mission once again. We hope it will serve as a valuable reference tool for you time and again throughout the year. Frank J. Fahrenkopf, Jr. President and CEO American Gaming Association 2007 AGA Survey of Casino Entertainment i

Notes Statistics Notes Because 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, we have defined commercial casinos to include private sector (i.e., nongovernmental) land-based, riverboat and dockside casinos, as well as racetrack casinos in Iowa and Louisiana. As in 2006, Native American casinos are noted only under the Casino Locations by Category section. The map includes Class III locations, which are compacted (state-negotiated), Las Vegas-style casinos, as well as Class II locations, which are noncompacted casinos offering bingo and/or electronic bingo devices. Information on racetrack casino operations, which are hybrids of casinos, lotteries and parimutuel facilities, are documented separately in the Spotlight on Racetrack Casinos and Stateby-State Economic Impact: Racetrack Casinos sections in order to provide a more complete picture of the overall economic contributions of this important industry sector. For Iowa and Louisiana, where gaming operations include both commercial casinos and racetrack casinos, statistics from both types of facilities are included in overall commercial casino figures for the state. In the State-by-State Economic Impact: Racetrack Casinos section, there is a significant difference in the percentage of revenues retained by operators in states where gaming machines at pari-mutuel facilities are operated by the state lottery versus those states in which gaming licensees are the owners and operators of gaming 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, New York, Rhode Island and West Virginia. Seven other states Florida, Iowa, Louisiana, Maine, New Mexico, Oklahoma and Pennsylvania operate and tax their gaming machines at parimutuel facilities more similarly to traditional casino states. That is, regulations allow operators to earn gross revenues before requiring those operators to pay out taxes, supplements to purses at the tracks, etc. One exception is Maine, where the state levies a 1 percent tax on gross revenue before taxing net revenue as well. In the case of either regulatory environment, the data provided detailing 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. State visitation figures reported in the Economic Impact section will not equal the total visitor figure reported in the Casino Visitation section 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 2006. Polling Notes Figures reported in the polling data may not add up to 100 percent because of rounding. ii 2007 AGA Survey of Casino Entertainment

CONTENTS NATIONAL ECONOMIC IMPACT OF CASINO ENTERTAINMENT CONTINUED EXECUTIVE SUMMARY 2 NATIONAL ECONOMIC IMPACT OF CASINO ENTERTAINMENT 4 Spotlight on Racetrack Casinos.................................9 STATE-BY-STATE ECONOMIC IMPACT 11 Commercial Casinos...........................................11 Colorado.........................................................11 Illinois...........................................................12 Indiana...........................................................12 Iowa.............................................................13 Louisiana..........................................................13 Michigan...........................................................14 Mississippi..........................................................14 Missouri............................................................15 Nevada.............................................................15 New Jersey..........................................................16 South Dakota.........................................................16 Racetrack Casinos..................................................17 Delaware..............................................................17 Florida.................................................................17 Iowa..................................................................18 Louisiana...............................................................18 Maine..................................................................19 New Mexico.............................................................19 New York................................................................19 Oklahoma................................................................20 Pennsylvania...............................................................20 Rhode Island...............................................................21 West Virginia...............................................................21 SPECIAL SECTION: THE FUTURE OF THE U.S. GULF COAST 22 CASINO VISITATION 29 SPOTLIGHT ON POKER 31 SPOTLIGHT ON SPORTS BETTING 34 CASINOS AS ENTERTAINMENT 35 CASINO CUSTOMERS: WHO ARE THEY? 36 AMERICAN PERCEPTIONS OF CASINO ENTERTAINMENT 37 APPENDIX 39 Glossary of Gaming Terms......................................................39 Index of Charts.................................................................40 Methodology...................................................................41 Acknowledgements..............................................................43

STATE-BY-STATE ECONOMIC IMPACT: Executive COMMERCIAL Summary CASINOS National Economic Impact of Casino Entertainment 2006 was a year of growth for the U.S. commercial casino industry, attributed to the continued expansion of the industry in existing commercial gaming states, the ongoing revitalization of the industry on the Gulf Coast after Hurricanes Katrina and Rita, and renovations and enhancements at existing properties in several key commercial gaming markets. Gross gaming revenues continued the steady growth exhibited in past years to total $32.42 billion in 2006 a 6.8 percent increase over 2005 figures. More than $5 billion of those revenues were paid back in the form of direct gaming taxes to the states and cities where commercial casinos are located. The 460 commercial casinos in 11 states directly employed 366,197 individuals who earned a total of $13.3 billion in salaries, including benefits and tips. Gross gaming revenues increased in every state in 2006, with the largest increases witnessed in Louisiana (+15.1) and Nevada (+8.4). The increases in Louisiana were due to the gaming industry there beginning to recover from the impact of the hurricanes that interrupted business in 2005. Increases in Nevada were due to continued growth and expansion in markets throughout the state. Spotlight on Racetrack Casinos Racetrack casinos continued to be a vital segment of the U.S. commercial casino industry in 2006, with the 36 racetrack casinos in 11 states generating $3.62 billion in gross gaming revenues, a 16 percent increase over 2005 totals. Racetrack casinos also significantly contributed to state and local economies, contributing $1.44 billion in direct gaming taxes to state and local governments, a 12.5 percent increase over 2005. Employment also grew considerably, with 22,308 individuals employed at racetrack casinos, a 30.3 percent increase over 2005. Growth in the sector last year was spurred by the first full year of racetrack casino operations in Oklahoma and Maine, the opening of the first properties in Pennsylvania and Florida, and the debut of three new racetrack casinos in New York. Nearly every racetrack casino state experienced growth in gross gaming revenues in 2006. Only Rhode Island, where the state s lone racetrack casino underwent renovations that briefly interrupted business, experienced a slight decline (-1.1 percent) from 2005 revenue figures. Special Section: The Future of the Gulf Coast This year s State of the States report features the results of a special survey of opinion leaders from the U.S. Gulf Coast on the status of regional recovery efforts and the outlook for the future of the local economy, particularly with regard to the gaming industry in the region. Conducted by Vox Populi Communications, the results show the area continues to face a number of challenges, but the entire region and the gaming industry along its shores are well on their way to exceeding the levels of success exhibited before the storms. According to the results, the lack of affordable insurance, a significant housing shortage for lower- and middle-income residents and an employee shortage are among the problems the region still needs to overcome. Despite these obstacles, however, the outlook for growth is tremendous. Interviewees say the casino industry has been a major contributor to overall recovery efforts in the region and think the casino industry will grow more quickly than the rest of the local 2 2007 AGA Survey of Casino Entertainment

EXECUTIVE SUMMARY CONTINUED economy in coming years. The shift to land-based resorts on the Mississippi Gulf Coast and the growth of non-gaming amenities at casino facilities will help the region s tourism and gaming industries grow beyond pre-hurricane levels, according to respondents. They also expect that within 10 years the overall level of tourism in the region will be greater than before the hurricanes. Casino Visitation More than a quarter of the U.S. adult population visited a casino in 2006, according to Harrah s Entertainment/TNS polling data. The 56.2 million casino visitors made a total of 371 million trips increases of 3.4 million visitors and 49 million trips over 2005 figures. Results of a 2007 public opinion poll conducted by Peter D. Hart Research Associates and Luntz, Maslansky Strategic Research show that casino gambling maintains its position as the second-most popular form of gambling, trailing only the lottery. Among American adults, a slightly higher percentage of males (32 percent) than females (29 percent) visited a casino in 2006. Also, onethird (33 percent) of all casino visitors hailed from Western states, a two percentage point drop in the region s share of visitors from 2005. The South and Northeast regions saw their share of casino visitors rise slightly, while the North Central region experienced a small decline. Spotlight on Poker, Sports Betting and Entertainment Poker continued to be a popular activity in 2006 with 14 percent of adults playing in the past year. Poker enthusiasts play the game in a variety of venues. Nearly nine out of 10 (87 percent) poker players report playing with friends or family, and nearly one-third (30 percent) played in a casino or tournament. When survey respondents were asked if poker was a game of skill or chance, they were almost evenly split, with 45 percent considering it a game of skill and 41 percent calling it a game of chance. Revenues from poker increased again in 2006. Americans spent more than $238 million on organized poker in Nevada and New Jersey, a 15 percent increase over 2005 figures. There also were 713 card rooms in five states. The four states that track card room revenues reported $1.1 billion in revenue last year. Sports betting also continued to be a popular activity in 2006. Bettors wagered more than $2.4 billion in Nevada sports books last year, with revenues from the activity totaling about 8 percent of the amount wagered. According to polling in this year s report, a significant number of Americans also report taking advantage of an increasingly diverse array of nongaming amenities at casinos, including restaurants, live entertainment and shopping. In fact, almost half (49 percent) of those surveyed said the food, shows and everything else is more fun for them than the actual gambling. American Perceptions of Casino Entertainment Survey results also indicate overall acceptability of casino gambling remained high in 2006, with 82 percent of Americans saying it is acceptable for themselves or others. Americans also view casinos as engines of economic development and sources of state and local tax revenue. Additionally, Americans continue to view casino gambling as a matter of personal choice. 2007 AGA Survey of Casino Entertainment 3

National Economic Impact of Casino Entertainment CASINO LOCATIONS BY CATEGORY Commercial Casino 1 Racetrack Casino 2,3 Tribal Casino Card Room5,6 1 Stand-alone casinos in Pennsylvania are legal but not yet operational. 4 Electronic Gaming Device 2 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. 3 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. 4 Native American casinos noted here include both Class II and Class III facilities. States with Class II gaming only are Alabama, Alaska, Florida, Nebraska and Texas. 5 The states with card rooms indicated here do not include states that have commercial casinos with poker facilities. 6 The card rooms in Washington operate blackjack and other house- or player-banked card games in addition to poker. 7 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 7 CASINOS PER STATE STATE Alabama 3 * Alaska 3 * Arizona 23 California 58 91 Colorado 46 º 2 Connecticut 2 Delaware 3 Florida 2 8* 16 Idaho 6 Illinois 9 Indiana 11 Iowa 16 3 1 Kansas 5 Louisiana 16 3 3 2,298 Maine 1 Michigan 3 15 Minnesota 20 1 Mississippi 27 2 Missouri 11 1 Montana 24 493 1,728 Nebraska 3* Nevada 274 2 2,230 3 New Jersey 11 New Mexico 5 21 New York 8 7 North Carolina 2 North Dakota 6 Oklahoma 3 79 Oregon 9 2,174 Pennsylvania + 2 Rhode Island 2 South Dakota 36 º 11 1,472 Texas 1* Washington 32 112 West Virginia 4 1,665 Wisconsin 24 Wyoming 1 Total 460 36 372 713 11,567 Number of States 11 11 28 5 6 *Class II games only ºLimited-stakes gaming Video lottery terminals +Legalized but not operational 1 1 Refers to number of non-casino locations in state where electronic gaming devices are present 2 Includes only locations with gross gaming revenue of at least $1 million 3 Locations have 15 or fewer machines 4 2007 AGA Survey of Casino Entertainment Sources: American Gaming Association, National Indian Gaming Commission, State Gaming Regulatory Agencies

NATIONAL ECONOMIC IMPACT OF CASINO ENTERTAINMENT CONTINUED COMMERCIAL CASINO TAX REVENUE BY STATE, 2005 vs. 2006 2005 $ Millions 1012.5 952.6 2006 $ Millions 749.7 830.2 833.7 777.8 289.4 265.0 531.7 527.8 331.9 349.9 301.7 301.6 413.9 424.6 490.2 508.8 101.1 108.4 CO IL IN IA LA MI MS MO NV NJ SD +7.3% +10.7% +7.2% +9.2% -0.7% +5.4% -0.03% +2.6% +6.3% +3.8% +6.5% Source: State Gaming Regulatory Agencies U.S. commercial casinos contributed $5.20 billion in direct gaming taxes to state and local governments in 2006, a 5.5 percent increase over 2005 contributions. Increases occurred in all but three states, with Illinois and Iowa experiencing the largest percentage increases. The increase in Illinois (+10.7 percent) was due to a state tax regulation requiring the industry to make a significant lump sum payment in the summer of 2006. The increase in Iowa (+7.2 percent) was a product of the opening of three new properties in 2006. 12.5 13.3 In 2006, U.S. commercial casinos: Employed 366,197 people Paid wages of $13.3 billion Contributed $5.20 billion in direct gaming taxes Earned $32.42 billion in gross gaming revenue 2007 AGA Survey of Casino Entertainment 5

NATIONAL ECONOMIC IMPACT OF CASINO ENTERTAINMENT CONTINUED EMPLOYMENT Commercial Casino Jobs by State, 2005 vs. 2006 State 2005 2006 Change Nevada 202,209 1 215,041 +6.3% New Jersey 44,542 45,043 +1.1% Mississippi 2 28,820 26,010-9.8% Louisiana 3 18,471 17,859-3.3% Indiana 15,060 16,000 +6.2% Missouri 11,100 10,900-1.8% Iowa 8,564 9,732 +13.6% Illinois 8,987 8,819-1.9% Colorado 8,029 7,829-2.5% Michigan 7,187 6,961-3.1% South Dakota 1,955 2,003 +2.5% Total 354,924 366,197 +3.2% 0 1-10,000 10,001-20,000 20,001-30,000 30,001-40,000 40,001-50,000 150,000+ Sources: State Gaming Regulatory Agencies, State Gaming Associations, Individual Properties 1 Figure for locations with gross gaming revenue in excess of $1 million for FY06. 2 Figure represents totals as of the end of second quarter 2005. 3 Figure represents pre-storm employment data submitted for the 2006 State of the States report. Commercial casinos employed 366,197 people last year, as the industry continued to be a major source of jobs where it operates. Total casino employment increased 3.2 percent over 2005 totals. Commercial Casino Wages, 2000-2006 $ Billions 15 $13.3 Commercial casino employees earned $13.3 billion in wages (including benefits and tips) in 2006, a 5.6 percent increase over 2005 figures. 12 $11.5 $11.8 $12.2 $12.6 $10.9 $11 9 2000 2001 2002 2003 2004 2005 Sources: State Gaming Regulatory Agencies, Individual Properties 2006 6 2007 AGA Survey of Casino Entertainment

NATIONAL ECONOMIC IMPACT OF CASINO ENTERTAINMENT CONTINUED CONSUMER SPENDING U.S. Consumer Spending on Commercial Casino Gaming, 1996-2006 Consumer spending on commercial casinos totaled $32.42 billion in 2006. The figure equals a 6.8 percent increase over 2005 totals. These increases are a result of the continued expansion of the industry in existing commercial gaming states, the continued revitalization of the industry on the Gulf Coast after Hurricanes Katrina and Rita, and the continuing trend of renovations and enhancements at existing properties nationwide. $ Billions 30 25 $25.7 $24.5 $22.2 $26.5 $32.42 $30.37 $28.93 $27.02 20 $18.2 $19.7 15 $17.1 1996 2001 2006 Sources: Christiansen Capital Advisors (1996-1999), State Gaming Regulatory Agencies (2000-2006) State-by-State Consumer Spending on Commercial Casino Gaming, 2005 vs. 2006 STATE 2005 2006 CHANGE Colorado $755.50 million $782.098 million +3.5% Illinois $1.799 billion $1.924 billion +6.9% Indiana $2.414 billion $2.577 billion +6.8% Iowa $1.106 billion $1.173 billion +6.1% Louisiana $2.232 billion $2.567 billion +15.1% Michigan $1.229 billion $1.303 billion +6.1% Mississippi $2.467 billion $2.570 billion +4.2% Missouri $1.532 billion $1.592 billion +3.9% Nevada $11.649 billion $12.622 billion +8.4% New Jersey $5.018 billion $5.219 billion +4.0% South Dakota $83.558 million $89.828 million +7.5% Source: State Gaming Regulatory Agencies In 2006, consumer spending on commercial casinos increased in every state. The largest increases were found in Louisiana and Nevada (+15.1 percent and +8.4 percent, respectively). The increases in Louisiana were due to the gaming industry there beginning to recover from the impact of the hurricanes that interrupted business during 2005. Increases in Nevada were due to continued growth and expansion in markets throughout the state. 2007 AGA Survey of Casino Entertainment 7

NATIONAL ECONOMIC IMPACT OF CASINO ENTERTAINMENT CONTINUED Commercial Casino Spending vs. Other Spending Choices, 2006 $291.5 $142.9 1. Commercial Casinos 2. Home Remodeling 3. Quick-Service Meals 4. Soft Drinks 5. Cable Television 6. Sporting Equipment 7. Retail Sales for Bookstores 8. Specialty Coffees 9. U.S. Movie Box Office Sales $70.1 $68.23 $66.4 $32.498 $16.12 $12.27 $9.49 1 2 3 4 5 6 7 8 9 1-American Gaming Association; 2-National Association of Home Remodeling Industries; 3-National Restaurant Association; 4-Beverage Digest; 5-National Cable and Telecommunications Association; 6-Sporting Goods Manufacturers Association; 7-American Booksellers Association; 8-Specialty Coffee Association of America; 9-Motion Picture Association of America 300 Consumers in 2006 spent less on commercial casinos than they did on home remodeling, quickservice meals and soft drinks, but more than they did on movie tickets or specialty coffees. Top 20 U.S. Casino Markets, 2006 LOCATION REVENUE 1 Las Vegas Strip, Nev. $6.689 billion 2 Atlantic City, N.J. $5.208 billion 3 Chicagoland, Ind./Ill. $2.595 billion 4 Connecticut $1.734 billion 5 Detroit, Mich. $1.303 billion 6 Tunica/Lula, Miss. $1.252 billion 7 St. Louis Mo./Ill. $990.98 million 8 Reno/Sparks, Nev. $939.50 million 9 Boulder Strip, Nev. $929.70 million 10 Shreveport, La. $847.18 million Source: The Innovation Group LOCATION REVENUE 11 Biloxi, Miss. $845.20 million 12 Lawrenceburg/Rising Sun/Belterra, Ind. $795.13 million 13 Kansas City, Mo. (includes St. Joseph) $751.33 million 14 New Orleans, La. $696.47 million 15 Lake Charles, La. $656.85 million 16 Downtown Las Vegas, Nev. $630.29 million 17 Laughlin, Nev. $629.76 million 18 Black Hawk, Co. $554.48 million 19 Council Bluffs, Iowa $477.96 million 20 Charlestown, W. Va. $448.23 million Six U.S. casino markets (including one location with Native American casinos) had total gross gaming revenues exceeding $1 billion in 2006. 2006 also saw a marked increase in gross gaming revenues in every market affected by the 2005 hurricanes, with Shreveport, New Orleans and Lake Charles exhibiting annual revenues higher than pre-storm levels. 8 2007 AGA Survey of Casino Entertainment

NATIONAL ECONOMIC IMPACT OF CASINO ENTERTAINMENT CONTINUED SPOTLIGHT ON RACETRACK CASINOS Racetrack Casino Tax Distributions to State and Local Governments, 2005 vs. 2006 445.59 404.52 (FY 05) 2005 $ Millions 2006 $ Millions 232.55 206.3 217.95 209.45 257.71 255.79 5.15 105.46 91.85 62.59 69.27 61.96 53.36 18.07 1.99 1 3 1 DE FL IA LA ME NM NY OK PA RI WV +12.7% N/A +14.8% +10.7% +808% +16.1% +4.1% +1196% N/A -0.7% +10.2% Source: State Gaming Regulatory Agencies 1 There are no 2005 statistics for Florida and Pennsylvania because racetrack casinos in the states only became operational in 2006. In 2006, racetrack casinos alone contributed $1.44 billion to the state and local governments where they operated, a 12.5 percent increase over 2005 figures. Racetrack casino tax contributions increased in nearly every state, with the largest increases occurring in Maine (+808 percent) and Oklahoma (+1196 percent), where 2006 was the first full year of operations. The first racetrack casinos in Florida and Pennsylvania also opened last year. Rhode Island experienced a slight decrease in tax contributions due to construction and renovation work at one of its major facilities..741 9.6 17.36 Racetrack Casino Jobs by State, 2005 vs. 2006 STATE 2005 2006 CHANGE Delaware 2,854 2,924 +2.5% Florida 1 1,528 N/A Iowa 2,358 2,831 +20.1% Louisiana 2,697 2,245-16.8% Maine 137 180 +31.4% New Mexico 617 1,915 +210.4% 2 New York 2,316 3,382 +46.0% Oklahoma 909 814-10.5% Pennsylvania 1 1,200 N/A Rhode Island 1,055 1,100 +4.3% West Virginia 4,179 4,189 +0.2% Total 17,122 22,308 +30.3% Source: State Gaming Regulatory Agencies Racetrack Casino State 1 There are no 2005 statistics for Florida and Pennsylvania because racetrack casinos in the states only became operational in 2006. 2 The significant year-over-year increase in the number of employees at New Mexico racetrack casinos is primarily due to changes in data collection. In the 2006 State of the States report, casino employees figure came from the New Mexico Gaming Control Board and thus reflected only those employees who are required to be licensed by that agency. This year's figure is a more accurate reflection of employee totals because it was compiled by directly contacting racetrack casino operators. Overall, racetrack casinos employed 22,308 people in 2006, a more than 30 percent increase over 2005 figures. Iowa, Maine, New Mexico and New York saw the largest percentage increases. The increases in Iowa and New York were due primarily to the opening of new racetrack casinos in those states, and the jump in Maine can be attributed to an expansion of employment during the property s first full year of operation. 2007 AGA Survey of Casino Entertainment 9

NATIONAL ECONOMIC IMPACT OF CASINO ENTERTAINMENT CONTINUED Consumer Spending on Racetrack Casinos, 2001-2006 $ Billions 3.5 3.0 2.5 2.0 $2.1 $2.0 $2.2 $2.86 $3.12 $3.62 2001 2002 2003 2004 2005 2006 Source: State Gaming Regulatory Agencies In 2006, consumer spending at racetrack casinos topped $3.6 billion, a whopping 16 percent increase over 2005 totals. Top 10 U.S. Racetrack Casino Markets, 2006* LOCATION REVENUE 1 Charles Town, W. Va. $448.23 million 2 Dover/Harrington, Del. $345.07 million 3 Providence, R.I. $329.36 million 4 Delaware Park/Wilmington, Del. $306.67 million 5 Chester, W. Va. $257.97 million 6 Wheeling, W. Va. $201.87 million 7 Council Bluffs, Iowa $186.06 million 8 Des Moines, Iowa $182.59 million 9 Lake Charles, La. $168.02 million 10 Saratoga Springs, N.Y. $118.83 million Source: The Innovation Group *New Mexico does not report revenue by individual facility. State-by-State Consumer Spending on Racetrack Casinos, 2005 vs. 2006 975.99 931.59 2005 $ Millions 2006 $ Millions 579.45 651.73 389.78 399.61 375.36 326.5 294.99 238.31 209.05 423.76 410.91 406.5 73.67 10.31 4.16 37.52 7.41 31.57 DE 1 FL IA LA ME NM NY OK 1 PA RI WV +12.5% N/A +2.5% +15% +801.9% +14% +43.7% +894.3% N/A -1.1% +4.8% Source: State Gaming Regulatory Agencies 1 There are no 2005 statistics for Florida and Pennsylvania because racetrack casinos in the states only became operational in 2006. Consumer spending on racetrack casinos increased in all but one state in 2006. The two states that experienced the largest increases in gross gaming revenues at racetrack casinos, Maine (+801.9 percent) and Oklahoma (+894.2 percent), each marked their first full year of operations in 2006. New York also saw a significant rise in gross gaming revenue (+43.7 percent) due to the opening of three new racetrack casinos in the state. Rhode Island experienced a slight decrease due to construction and renovation work at one of its major racetrack casino properties. 10 2007 AGA Survey of Casino Entertainment

State-By-State Economic Impact: Commercial Casinos 2006 was a year of growth for the U.S. commercial casino industry, as it continued to be a major contributor to the national economy and local communities across the country. Gross gaming revenues continued the steady growth exhibited in past years to total $32.42 billion in 2006 a 6.8 percent increase over 2005 figures. More than $5 billion of those revenues were paid back in the form of direct gaming taxes to the states and cities where commercial casinos are located. The 460 commercial casinos across the country employed 366,197 individuals who earned a total of $13.3 billion in salaries, including benefits and tips. The industry s growth can be attributed to continued expansion in existing commercial gaming states, the ongoing revitalization of the industry on the U.S. Gulf Coast after Hurricanes Katrina and Rita, and renovations and enhancements at existing properties in several key commercial gaming markets. During 2006, consumer spending in commercial casinos increased in every state. The largest gross gaming revenue increases occurred in Louisiana (+15.1 percent) and Nevada (+8.4 percent). Increases in Louisiana were due to the state s gaming industry beginning to recover from the impact of the hurricanes that interrupted business during 2005. Increases in Nevada were due to continued growth and expansion in markets throughout the state. COLORADO Current # of Operating Casinos 46 Gaming Format Land-based (limited stakes; $5 maximum bet) Casino Employees 7,829 Casino Employee Wages $295.4 million (includes tips and benefits) Gross Casino Gaming Revenue $782.10 million Gaming Tax Revenue $108.40 million How Taxes Spent Local communities, historic preservation, general fund Legalization Date November 1990 First Casino Opening Date October 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 Source: Colorado Gaming Association, Colorado Gaming Control Board Central City Black Hawk Cripple Creek 2007 AGA Survey of Casino Entertainment 11

STATE-BY-STATE ECONOMIC IMPACT: COMMERCIAL CASINOS CONTINUED ILLINOIS Current # of Operating Casinos 9 Gaming Format Riverboat Casino Employees 8,819 Casino Employee Wages $332.8 million (includes tips and benefits) Gross Casino Gaming Revenue $1.924 billion Gaming Tax Revenue $830.24 million How Taxes Spent Education assistance, local government Legalization Date February 1990 First Casino Opening Date September 1991 State Gaming Tax Rate Graduated tax rate from 15% to 50% of gross gaming revenue, $2 to $3 admissions tax Mode of Legalization Legislative action Visitor Volume 16.18 million Sources: Illinois Casino Gaming Association, Illinois Gaming Board Rock Island Alton E. Peoria Elgin E. St. Louis Aurora Joliet Metropolis INDIANA Current # of Operating Casinos 11 (10 riverboats, 1 land-based) Gaming Format Riverboat, dockside and land-based casinos Casino Employees 16,000 Casino Employee Wages $609.5 million (includes tips and benefits) Gross Casino Gaming Revenue $2.577 billion Gaming Tax Revenue $833.67 million How Taxes Spent Economic development, local government Legalization Date November 1993 First Casino Opening Date December 1995 State Gaming Tax Rate Graduated tax rate from 15% to 35% of gross gaming revenue; $3 per patron admissions tax Mode of Legalization Local option vote, legislative action Visitor Volume 27.49 million Sources: Casino Association of Indiana, Indiana Gaming Commission Gary Michigan City E. Chicago Hammond French Lick Evansville Elizabeth Lawrenceburg Rising Sun Markland Dam 12 2007 AGA Survey of Casino Entertainment

STATE-BY-STATE ECONOMIC IMPACT: COMMERCIAL CASINOS CONTINUED IOWA Current # of Operating Casinos 16 (10 riverboats, 3 land-based, 3 racetrack casinos) Gaming Format Riverboat, racetrack and land-based casinos Casino Employees 9,732 Casino Employee Wages $330.5 million (includes tips and benefits) Gross Casino Gaming Revenue $1.173 billion Gaming Tax Revenue $289.43 million How Taxes Spent Infrastructure improvements, local government, general fund, schools and universities, the environment Legalization Date July 1989 First Casino Opening Date April 1991 State Gaming Tax Rate 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 Mode of Legalization Local option vote, legislative action Visitor Volume 21.85 million Sources: Iowa Gaming Association, Iowa Racing and Gaming Commission Sioux City Emmetsburg Council Bluffs Northwood Altoona Marquette Dubuque Clinton Riverside Osceola Davenport Bettendorf Burlington Fort Madison LOUISIANA Current # of Operating Casinos 16 (12 riverboats, 1 land-based, 3 racetrack casinos) Riverboat, land-based, racetrack casinos Gaming Format Casino Employees 17,859 Casino Employee Wages 565.1 million (includes tips and benefits) Gross Casino Gaming Revenue $2.567 billion Gaming Tax Revenue $527.80 million How Taxes Spent General fund, city of New Orleans, public retirement systems, state capitol improvements, rainy day fund Legalization Date July 1991 First Casino Opening Date October 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 Racetrack casinos: 18.5% tax on gross gaming revenue, 18% of net revenue paid to horsemen, 4% of the above net revenue then paid to local parish Mode of Legalization Local option vote, legislative action Visitor Volume 36.75 million Sources: Casino Association of Louisiana, Louisiana Gaming Control Board 1 Riverboat casinos pay an additional 4 percent to 6 percent to local governing authorities under the terms of local boarding fee agreements. Shreveport Vinton Bossier City Opelousas Lake Charles Baton Rouge New Orleans Kenner 2007 AGA Survey of Casino Entertainment 13

STATE-BY-STATE ECONOMIC IMPACT: COMMERCIAL CASINOS CONTINUED MICHIGAN Current # of Operating Casinos 3 Gaming Format Land-based Casino Employees 6,961 Casino Employee Wages $379.6 million (includes tips and benefits) Gross Casino Gaming Revenue $1.303 billion Gaming Tax Revenue $349.86 million How Taxes Spent Public safety, capital improvements, youth programs, tax relief, neighborhood development and improvement, infrastructure repair and improvement Legalization Date December 1996 First Casino Opening Date July 1999 State Gaming Tax Rate 24% tax on gross gaming revenue (11.9% to city of Detroit, 12.1% to state of Michigan) Mode of Legalization Local advisory vote, statewide voter referendum, legislative action Visitor Volume Data not available Source: Michigan Gaming Control Board Detroit MISSISSIPPI Current # of Operating Casinos 27 Gaming Format Dockside, land-based Casino Employees 26,010 Casino Employee Wages $771.3 million (includes tips and benefits) Gross Casino Gaming Revenue $2.570 billion Gaming Tax Revenue $301.62 million How Taxes Spent Housing, education, transportation, health care services, youth counseling programs Legalization Date 1990 First Casino Opening Date August 1992 State Gaming Tax Rate Graduated tax rate on first $134,000 of gaming revenue, with all subsequent gaming revenue taxed at 8%; up to 4% additional tax on gaming revenues may be imposed by local governments Mode of Legalization Local option vote, legislative action Visitor Volume 35.65 million Sources: Mississippi Casino Operators Association, Mississippi Gaming Commission Lula Greenville Vicksburg Natchez Tunica/Robinsonville Bay St. Louis Biloxi Gulfport 14 2007 AGA Survey of Casino Entertainment

STATE-BY-STATE ECONOMIC IMPACT: COMMERCIAL CASINOS CONTINUED MISSOURI Current # of Operating Casinos 11 Gaming Format Riverboat (continuous boarding) Casino Employees 10,900 Casino Employee Wages $330.00 million (includes tips and benefits) Gross Casino Gaming Revenue $1.592 billion Gaming Tax Revenue $424.57 million How Taxes Spent Education, local public safety programs, disordered gambling treatment, veterans programs, early childhood programs Legalization Date August 1993 First Casino Opening Date May 1994 State Gaming Tax Rate 20% 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 and legislative action Visitor Volume 53.08 million Sources: Missouri Riverboat Gaming Association, Missouri Gaming Commission La Grange St. Joseph Riverside North Kansas City Kansas City Boonville Maryland Heights St. Charles St. Louis Caruthersville NEVADA Current # of Operating Casinos 274 1 Gaming Format Land-based Casino Employees 215,041 1 Casino Employee Wages $8.38 billion 1 (includes tips and benefits) Gross Casino Gaming Revenue $12.622 billion Gaming Tax Revenue $1.012 billion How Taxes Spent Education, local governments, general fund, problem gambling programs Legalization Date 1931 First Casino Opening Date 1931 State Gaming Tax Rate 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 Mode of Legalization Legislative action Visitor Volume 51.40 million Sources: Nevada Gaming Control Board, Nevada Commission on Tourism 1 Statistics for locations with gross gaming revenue in excess of $1 million for FY06. McDermitt Jackpot Elko Wells Winnemucca Battle West Reno Mtn. Wendover Carson City Lovelock Ely Gardnerville Lake Tahoe Fallon Hawthorne Beatty Tonopah Mesquite Amargosa Valley N. Las Vegas Indian Spgs. Las Vegas Pahrump Henderson Primm Searchlight Laughlin 2007 AGA Survey of Casino Entertainment 15

STATE-BY-STATE ECONOMIC IMPACT: COMMERCIAL CASINOS CONTINUED NEW JERSEY Current # of Operating Casinos 11 1 Gaming Format Land-based Casino Employees 45,043 Casino Employee Wages $1.25 billion (includes tips but not benefits) Gross Casino Gaming Revenue $5.219 billion Gaming Tax Revenue $508.78 million How Taxes Spent Senior citizens, disabled, economic revitalization programs Legalization Date 1976 First Casino Opening Date 1978 State Gaming Tax Rate 8% tax on gross gaming revenue, plus a community investment alternative obligation of 1.25% of gross gaming revenue (or an investment alternative 2.5% on gross gaming revenue), 4.25% tax on casino complimentaries Mode of Legalization Statewide vote, legislative action Visitor Volume 34.53 million Sources: New Jersey Casino Control Commission, South Jersey Transportation Authority 1 The Sands Hotel & Casino closed on Nov. 11, 2006. Most figures for New Jersey reflect data for the full 12 properties operating in the state for the majority of the year. Atlantic City SOUTH DAKOTA Current # of Operating Casinos 36 Gaming Format Land-based (limited-stakes; $100 maximum bet) Casino Employees 2,003 (CY 2005) Casino Employee Wages $39.2 million (includes tips and benefits) Gross Casino Gaming Revenue $89.83 million Gaming Tax Revenue $13.34 million How Taxes Spent 40% Department of Tourism, 10% Lawrence County, 50% commission fund Legalization Date 1989 First Casino Opening Date November 1989 State Gaming Tax Rate 8% tax on gross gaming revenue, gaming device tax of $2,000 per machine per year Mode of Legalization Statewide vote, local option vote, legislative action Visitor Volume Data not available Source: South Dakota Gaming Commission Deadwood 16 2007 AGA Survey of Casino Entertainment

State-By-State Economic Impact: Racetrack Casinos Racetrack casinos continued to be a vital segment of the U.S. commercial casino industry in 2006, with the 36 racetrack casinos in 11 states generating $3.62 billion in gross gaming revenues, a substantial 16 percent increase over 2005 totals. Racetrack casinos also contributed significantly to state and local economies where they operate, contributing $1.44 billion in direct gaming taxes to state and local governments, a 12.5 percent increase over 2005. Employment also grew considerably, with 22,308 individuals employed by racetrack casinos, a 30.3 percent increase over 2005. The continued growth of revenues and tax payments is due to the continued expansion of this racetrack casino segment of the commercial gaming industry. 2006 marked the first full year of racetrack casino operations in Oklahoma and Maine, the opening of the first properties in Pennsylvania and Florida, and the debut of three new racetrack casinos in New York. Nearly every racetrack casino state experienced growth in gross gaming revenues in 2006. Only Rhode Island, where the state s lone racetrack casino underwent renovations that briefly interrupted business operations, experienced a slight decline (-1.1 percent) from 2005 figures. DELAWARE Current # of Operating Racinos 3 Public/Private Arrangement Publicly run video lottery terminals with distributions to operators Racino Employees 2,924 Gross Racino Gaming Revenue $651.73 million Distributions to State/Local Govt. $232.54 million Revenue Retained by Operator 48% How Taxes Spent General fund Legalization Date 1994 First Racino Opening Date 1995 Mode of Legalization Legislative action Source: Delaware Lottery Harrington Wilmington Dover FLORIDA Current # of Operating Racinos 2 Public/Private Arrangement Privately operated facilities with slot machines Racino Employees 1,528 Gross Racino Gaming Revenue $10.31 million Distributions to State/Local Govt. $5.15 million Revenue Retained by Operator 50% 1 How Taxes Spent Statewide education Legalization Date 2006 First Racino Opening Date 2006 Mode of Legalization Statewide referendum, local option vote, legislative action Source: Florida Department of Business and Professional Regulation 1 This figure only represents what operators retain after state taxes are collected. It does not take into account what operators allocate to horse and dog breeders funds, local authorities and public gambling awareness. Thus, the percentage of revenue retained by operators is actually significantly lower than this 50 percent figure. Hallandale Beach 2007 AGA Survey of Casino Entertainment 17

STATE-BY-STATE ECONOMIC IMPACT: RACETRACK CASINOS CONTINUED IOWA Current # of Operating Racinos 3 Public/Private Arrangement Nonprofit and privately operated facilities with slot machines and table games Racino Employees 2,831 Gross Racino Gaming Revenue $399.61 million Distributions to State/Local Govt. $105.46 million Revenue Retained by Operator 76.3% How Taxes Spent Infrastructure improvements, local government, general fund, schools and universities, the environment Legalization Date 1994 First Racino Opening Date 1995 Mode of Legalization Local option vote, legislative action Source: Iowa Racing and Gaming Commission Council Bluffs Altoona Dubuque LOUISIANA Current # of Operating Racinos 3 Public/Private Arrangement Privately operated facilities with slot machines Racino Employees 2,245 Gross Racino Gaming Revenue $375.36 million Distributions to State/Local Govt. $69.26 million Revenue Retained by Operator 63.6% How Taxes Spent General fund, purses and local parishes Legalization Date 1997 First Racino Opening Date 2002 Mode of Legalization Local option vote, legislative action Source: Louisiana Gaming Control Board Bossier City Vinton Opelousas 18 2007 AGA Survey of Casino Entertainment

STATE-BY-STATE ECONOMIC IMPACT: RACETRACK CASINOS CONTINUED MAINE Current # of Operating Racinos 1 Public/Private Arrangement Privately operated facility with slot machines Racino Employees 180 Gross Racino Gaming Revenue $37.52 million Distributions to State/Local Govt. $18.07 million Revenue Retained by Operator 51.8% How Taxes Spent Education, health care, agriculture and gambling control board administration Legalization Date 2004 First Racino Opening Date November 2005 Mode of Legalization Local option vote, legislative action Sources: Maine Gambling Control Board, Penn National Gaming, Inc. Bangor NEW MEXICO Current # of Operating Racinos 5 Public/Private Arrangement Privately operated facilities with slot machines Racino Employees 1,915 Gross Racino Gaming Revenue $238.31 million Distributions to State/Local Govt. $61.96 million Revenue Retained by Operator 54.75% How Taxes Spent General fund, problem gambling treatment Legalization Date 1997 First Racino Opening Date 1999 Mode of Legalization Legislative action Source: New Mexico Gaming Control Board Farmington Albuquerque Ruidoso Sunland Park Hobbs NEW YORK Current # of Operating Racinos 8 Public/Private Arrangement Racino Employees 3,382 Gross Racino Gaming Revenue $423.76 million Distributions to State/Local Govt. $217.95 million Revenue Retained by Operator 20.2% How Taxes Spent Public education Legalization Date 2001 First Racino Opening Date 2004 Mode of Legalization Legislative action Sources: New York Racing and Wagering Board Publicly run video lottery terminals with distributions to operators Vernon Batavia Farmington Hamburg Nichols Monticello Saratoga Springs Yonkers 2007 AGA Survey of Casino Entertainment 19

STATE-BY-STATE ECONOMIC IMPACT: RACETRACK CASINOS CONTINUED OKLAHOMA Current # of Operating Racinos 3 Public/Private Arrangement Privately operated facilities with slot machines Racino Employees 814 Gross Racino Gaming Revenue $73.67 million Distributions to State/Local Govt. $9.6 million Revenue Retained by Operator 59% How Taxes Spent Education and purses Legalization Date November 2004 First Racino Opening Date October 17, 2005 Mode of Legalization Statewide question on ballot Sources: Oklahoma Horse Racing Commission, State of Oklahoma - Office of the State Auditor and Inspector Oklahoma City Claremore Sallisaw PENNSYLVANIA Current # of Operating Racinos 2 Public/Private Arrangement Privately operated facilities with slot machines Racino Employees 1,200 Gross Racino Gaming Revenue $31.57 million Distributions to State/Local Govt. $17.36 million Revenue Retained by Operator 45% How Taxes Spent Property tax relief, economic development, tourism, horse racing industry, host local government Legalization Date July 5, 2004 First Racino Opening Date Nov. 14, 2006 Mode of Legalization Legislative action Source: Pennsylvania Gaming Commission Wilkes Barre Bensalem 20 2007 AGA Survey of Casino Entertainment

STATE-BY-STATE ECONOMIC IMPACT: RACETRACK CASINOS CONTINUED RHODE ISLAND Current # of Operating Racinos 2 Public/Private Arrangement Racino Employees 1,100 Gross Racino Gaming Revenue $406.50 million Distributions to State/Local Govt. $255.79 million Revenue Retained by Operator 27.6% How Taxes Spent General fund Legalization Date 1992 First Racino Opening Date 1992 Mode of Legalization Legislative action Source: Rhode Island Lottery Publicly run video lottery terminals with distributions to operators Lincoln Newport WEST VIRGINIA Current # of Operating Racinos 4 Public/Private Arrangement Publicly run video lottery terminals with distributions to operators Racino Employees 4,187 Gross Racino Gaming Revenue $975.99 million Distributions to State/Local Govt. $445.59 million Revenue Retained by Operator 42.4% How Taxes Spent Education, senior citizens and tourism Legalization Date 1994 First Racino Opening Date 1994 Mode of Legalization Local option vote, legislative action Source: West Virginia Lottery Wheeling Chester Cross Lanes Charles Town 2007 AGA Survey of Casino Entertainment 21

Special STATE-BY-STATE ECONOMIC IMPACT: COMMERCIAL Section: The CASINOS Future of the U.S. Gulf Coast Nearly two years after the Mississippi and Despite the region s resiliency, there still is Louisiana Gulf Coasts were devastated by much work to be done. The housing market, a Hurricanes Katrina and Rita, the areas continue shortage of workers and the lack of affordable to face a number of challenges to economic insurance continue to be major concerns. recovery. But the entire region and the gaming Even faced with these challenges, the outlook industry along its shores are well on their way to for the future is bright. When asked about the exceeding the levels of success exhibited before future of the gaming industry along the Gulf Coast, the storms, according to a new survey of opinion 95 percent of respondents think the decision to leaders in the region. allow casino operators on the Mississippi Gulf The survey, conducted by Vox Populi Coast to site their facilities on land will have a Communications as part of the AGA s ongoing substantial impact on the growth of the market Future Watch research series, describes the status there. of the Gulf Coast s recovery through the eyes of Interviewees also expect significant growth the community leaders and gaming industry for the Gulf Coast casino industry, with 95 percent executives who have been on the front lines of believing it will grow more quickly than the rest this campaign since Hurricanes Katrina and Rita of the regional economy in the next five to 10 hit the region in 2005. The elite group of respondents represents an extraordinarily accomplished casino properties will increase at least somewhat years. The same percentage thinks the number of and knowledgeable segment of the local population, from college professors and bank presidents gaming amenities at casino resorts, respondents during that same time frame. In terms of non- to chamber of commerce directors and leading think that retail and shopping venues and highend restaurants hold the most potential to garner figures in the public sector on economic development and community rebuilding. Fully 45 percent future success. of respondents have lived and worked on the Gulf Threats to the gaming industry on the Gulf Coast for more than 20 years. Gaming industry Coast still exist, and increased competition from leaders comprise 25 percent of interviewees. other jurisdictions (47 percent) and weather-related catastrophes (42 percent) are the threats most Respondents ratings of current economic conditions on the coast are mixed, but the commonly cited by respondents. region s economic resilience has been better than Even faced with these threats, optimism on most anticipated. The casino industry is viewed by the Gulf Coast is pervasive. Fully 80 percent of interviewees as a major component of the region s interviewees think that the overall level of tourism recovery effort, with a significant majority (65 percent) saying the industry very much helped in now than it was prior to Hurricanes Katrina in the Gulf region will be greater 10 years from this regard. and Rita. 22 2007 AGA Survey of Casino Entertainment 22