States lose money as gamblers stop wagering
According to a story in the Wall Street Journal, eight of the 12 states that allow casino gambling saw gambling-related revenues fall in 2008.
In Nevada, a state that built its reputation on glitzy casinos, gambling-tax revenue dropped by 15%. That's no small potatoes for the home of Sin City; roughly a third of the state's general fund (the big pool of money that is used to create the annual budget) came from gambling.
States that permit lotteries also are seeing a falloff, with the Journal reporting that 14 out of 20 state lotteries brought in less money this year than the year before.This is a challenge for state lawmakers who have gotten used to steadily increasing windfalls from gambling revenues, which shot up a whopping 65% between 1998 and last year.
These dollars go for everything from funding education to reducing local property taxes. With people spending less these days and carefully watching their dwindling discretionary income, this money is no longer a sure bet.
Casino and slot-machine operators are facing a double-whammy of dampened consumer spending and increasing competition from the large number of new gambling outlets still being built.
More than a dozen Native American gambling outlets were built between 2007 and 2008, for instance. (Although these casinos don't pay taxes, many of them have revenue-sharing deals with the states in which they're located.) Despite the glut, though, more states continue to expand their gambling offerings because they've proven so lucrative in the past.
There's one bright spot in all of this for gamblers themselves: This increased competition among a larger number of operators for fewer consumer dollars means casinos, racetracks and other venues are pulling out all the stops to lure in bettors, including buffets and concerts.
They're also adding cheaper games. One casino in Pennsylvania highlighted in the Journal article just added 250 penny slot machines.