Recession Hits Casino Gambling For $1.8 Billion Loss

In the world of gambling, one axiom holds true — In the end, the casino always wins. But a new report from the American Gaming Association says that, due to the current not-so-great status of the economy, the casino isn’t winning as much as it was before.

According to the report, there was a 5.5% ($1.8 billion) overall drop in revenue from casino gambling in 2009, and of the 12 states with casino gambling, 8 reported drops in revenue.

Additionally, there were around 29,000 less people employed at casinos in 2009 than there had been in 2008.

Says Frank Fahrenkopf of the AGA:

There’s no way to sugarcoat it… The past year was tough.

People had less money to spend on our products… Until people go back to work, businesses that depend on discretionary income are going to continue to struggle.

The four states that saw increased casino gambling revenue are Colorado, Pennsylvania, Indiana and Missouri. Two new casinos opened in PA, while two new racetrack casinos made their debut in Indiana. Colorado raised betting limits and allowed for longer operating hours. Likewise, Missouri did away with limits on how much a gambler could lose at its casinos.

While casino gambling was noticeably down in most places, folks were still queuing up for lottery tickets, with revenues only dropping by less than 1% from the previous year.

Casino gamblers tightened purse strings in recession [USA Today]

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  1. funsumerist says:

    Most people can only visit casino’s on the weekends. If casino’s would lower there weekend rates more people would come and gamble their money away anyways. The average Friday and Saturday nights stay can be over 200$ a night.

    • 44 in a Row says:

      Nowadays, though, the hotels are profit centers for gaming corporations. It used to be that gaming resorts made most of their money from the casino; now, for a company like MGM Mirage, it’s significantly less than half. A Las Vegas resort makes a ton of money from you even if you never step foot in a casino.

      • Verdant Pine Trees says:

        You aren’t kidding. Just came back from La., and I can’t believe what they wanted to charge us for a buffet. We spent the same amount of cash going to a real gourmet place instead!

      • madanthony says:

        And from the extras.

        I was at the Palazzo a few weeks ago for a conference. They charge more to use their gym for a day then my gym charges a month.

    • gStein_*|bringing starpipe back|* says:

      “casinos” is plural, not possessive.
      apostrophe is not needed.

  2. morehalcyondays says:

    We desperately need to create industries which create wealth, like manufacturing.

    • Zowzers says:

      Like manufacturing slot machines? The 3 largest slot manufacturers are located in the USA. WMS (Chicago), IGT(Reno) & Bally(Las Vegas).

  3. u1itn0w2day says:

    That could be a good sign in that many who go to gambling joints can control themselves/spending.

    The bad sign is that many who are still going might not be able to afford it.

  4. frank64 says:

    I have always thought gambling was the biggest waste of money going. I have seen people go through 100 dollars in 5 minutes. You mostly lose, with the state government getting most of the money in taxes and fees off the top, but then if you win everyone expects a tip. Then the taxes on the winning! They don’t let you deduct the losses against the winnings just your regular income, really reducing the value.

    • MichiganWolverine says:

      Please do not provide tax advice when you are 100 per cent positively wrong. You can deduct all gambling losses against winnings. You can not deduct more than your winnings.
      I will trust the IRS over you everyday
      http://www.irs.gov/taxtopics/tc419.html

      • frank64 says:

        That was not a very nice response. Kind of uncalled for, but I guess on the internets you lose some of your politeness. First of all I was not offering tax advice, but talking about the negatives of gambling.

        Second, if you don’t itemize, you can’t deduct it, yet you have to claim it as income. Many people don’t have enough deduction to make schedule A worth it, even with some gambling winnings. If you could deduct losses straight from the winnings it wouldn’t be an issue(say and only claim the net winnings), but you can’t. That is what I was getting at, but I did not go further because it was off topic, and I WAS NOT offering tax advice.
        You need to be smart enought to interpert what you read from the IRS I don’t think you are, or maybe the thought was just to call someone out. Maybe could get your rocks off correcting peoples spelling? (:

        • MichiganWolverine says:

          Your entire post was stupid. I just pointed out your stupidity. Provide proof of these stupid statements:
          “the state government getting most of the money in taxes and fees off the top” – most means more than 50%. Provide your back up on it. Oh thats right, you are offering an OPINION. A stupid one at that.
          “I have always thought gambling was the biggest waste of money going. ” Glad you think so. SO WHAT. It offers nothing to the conversation. Some may think going to eat at a fancy restaurant is a waste of money. Others might think traveling to a foreign country is a waste of money. Some might think a boat is a waste of money. There is this idea, that it is YOUR money to decide what you want to spend it on. Thanks for deciding what is the biggest waste of money.
          ” I have seen people go through 100 dollars in 5 minutes” Another thing that does not matter. I have seen people go through tens of thousands of dollars for a one night wedding. I have seen people drop hundreds of thousands of dollars in the stock market as well.
          “if you win everyone expects a tip” really? everyone? tipping is a CHOICE. Most decent people feel glad to tip somebody who might deal them a black jack, or brings them free drinks. Everyone would mean other players at the table, the dealers at other tables, the pit boss, the janitor, the maintenance people. Glad you can speak for EVERYONE.

          As for the tax ramifications you are grasping at straws. If you do not want to play, DON’T. I have talked to people who have won large in a casino, and not a single one of them said, I wish I hadn’t won. I guess you decline a raise from your boss because the damn extra taxes just piss you off.

          By the way, the internet has nothing to do with what I am saying. I would say the same thing to your face. I guess you should start speaking for YOURSELF, and STFU.

          .

          • frank64 says:

            Your skirted the issue of me being 100% RIGHT on the tax issue and you being completely wrong. This blog is all about opinions, so not wanting them seems a little strange.

      • frank64 says:

        http://www.bankrate.com/finance/money-guides/reporting-gambling-winnings.aspx

        “Even though technically you might be able to avoid taxes on $3,000 you won by claiming $3,000 in bad bets, that’s still less than the standard deduction of $5,700 allowed a single taxpayer on 2009 returns. If you have no other deductions to itemize, it doesn’t make sense to forfeit the standard deduction’s other $2,700 just because you can claim gambling losses.”

    • Verdant Pine Trees says:

      Also, with video poker, played correctly, there’s actually a house advantage.

      But really, most people play for fun.

    • varro says:

      I’ve discovered the perfect business: people swarm in, empty their pockets, and scuttle off. Nothing can stop me now — except microscopic germs.

  5. Treespeed says:

    The title should read Americans avoided losing $1.8 billion to casinos.

  6. u1itn0w2day says:

    I don’t trust the modern day casino. I see all these electronic slots with computer generated results. Computers can be programed. Computers can have software changed or updated and/or hacked- even by a casino manager trying to keep his payouts down.

    • Zowzers says:

      as someone in the industry… Stay your fears. slot machines go through so many regulatory and testing bodies that in order for a back door to get through you’d have to have a few dozen people in on it.

      as far as changing the % win on a machine, well in order to do that they have to turn the machine off, and re-option it. so you don’t have to worry about them changing it on you while you are playing it (which would be highly illegal in north American markets regardless)

      For hacking them out in the field… yeah, good luck with that.

    • Loias supports harsher punishments against corporations says:

      It’s a fiercely regulated industry, monitored closely by the gaming division, with heavy fines and jail time.

    • MichiganWolverine says:

      If the stock market or banking industry were regulated and had stop gap measures that gambling does (which the stock market is gambling as well) we would not have “too big to fail”, the housing bubble, or Bernie Madoff.

  7. Loias supports harsher punishments against corporations says:

    Those poor, poor, insanely rich casino owners. A single tear rolls down my cheek.

  8. frank64 says:

    Really, how many of the workers traditionally get tips when someone wins big? I am not sure if the dealers do, the ones who help you if you win at the slots do.

    • 44 in a Row says:

      I can’t speak to any games except craps or blackjack, but dealers definitely get tipped in both of those games. Usually it’s done by placing a bet for the dealer — an extra dollar added to your own bet in blackjack, a two-way C/E or hardway bet for yourself and the dealer in craps, that sort of thing. And actually, I’m almost every time I’ve tried to give a tip directly to the dealer, they’ve wanted it on the line instead; makes it more fun for them, I suppose.

      • Loias supports harsher punishments against corporations says:

        I have no idea why anyone would want their tip on the line. If I were a dealer, I’d almost be insulted by that notion – Don’t dangle the tip in my face only to watch it go to my employer.

        • 44 in a Row says:

          I mean, it depends on the game, but with something like blackjack, the house edge is so low (for a 6-deck S17 game with otherwise-standard rules, you’re talking about a 0.4% edge) that the dealer’s winding up with most of it over the long term. If I have a choice between getting $100, or $99.60 and getting to play, I’d pick the latter.

    • Loias supports harsher punishments against corporations says:

      At slots, no, but in all situations it’s typical to tip the drink waitresses, slots or otherwise. With other games, it’s common although not “standard” to tip for moderate to big wins. For example, if playing poker and you get good cards resulting in a good win, you usually tip the dealer, or you might give a tip as you leave (or as the dealer leaves, since they rotate often).

  9. leprechaunshawn says:

    The title is misleading. When I first read the title I thought to myself, “Self, there is no way the casino industry lost $1.8 billion last year.”

    After reading the story I realized I was right, casino’s did not lose $1.8 billion last year, they just made $1.8 billion less than in 2008.

  10. nbs2 says:

    All the more reason for MD to bring table games to go with slots.

  11. mvillafana says:

    The American Gaming Association?

    That’s nonsense. Softball is a game. Football is a game.

    Gambling is gambling. At least be honest enough to call yourself a gambling association.

    • Zowzers says:

      Football and softball are sports, Monopoly is a game.

    • Scarficus Rex says:

      It’s been called “the gaming industry” for ages, and it is pretty universally referred to as such by members of the gaming industry. This goes from state agencies (eg. the Nevada Gaming Control Board), to companies (eg. International Game Technology), to standards bodies (eg. the Gaming Standards Association), to conferences (eg. Global Gaming Expo).

      All this is unsurprising, since they are using the word “gaming” as it is presently defined, and has been defined for centuries. For example, Merriam-Webster’s first definition of the word “gaming” (which it dates to 1501) is “the practice of gambling.” Wiktionary puts it as “(gambling) The business of offering games of chance for money.” It goes on to define “game” as an intransitive verb, meaning “To gamble.”

      So, in sum, it is not dishonest at all.

  12. Mike says:

    Gambling is lame. Why not just wipe your butt with dollar bills? At least you get something in return for your money in that case.

  13. daveinva says:

    I’m of a mixed mind when it comes to gambling.

    As a form of entertainment, I think it can be great fun. I never expect to win, am pleasantly surprised when I do, and I enjoy an occasional trip to Vegas or Atlantic City as much as any high-roller.

    But I think that Vegas and AC is where gambling should end (okay, horseracing gets an exception as well).

    At least when I go to Vegas, I know I’m buying entertainment. Great restaurants, decadent nightlife, silly shows. It’s more than gambling, it’s a vacation. An *expensive* one, sure; indulgent, yes. But again, it’s a treat.

    A casino in Pennsylvania or Indiana? State lotteries and scratch-offs? That’s not entertainment, that’s the government– *our* government– preying on the weak-willed and mathematically challenged in the local communities, the people who can’t afford a trip to Vegas or AC (and thus by definition shouldn’t be spending their money on gambling).

    Sure, when the lotto hits a couple hundred million, I’ll buy a few tickets just to enjoy the “dream” of winning for a day or two. But I’m under no illusion of winning, let alone the illusion that this is a wise financial strategy. Again, it’s an indulgence, like buying a candy bar or going to the movies– it’s not something that replaces my 401K and savings account.

    Anyway… long ramble, but I feel for the folks in Vegas. It’s a business, they have every right to make a living as anyone else does. Personally, I think they might do better if every other state didn’t feel the need to “compete” for this business.

    • MichiganWolverine says:

      OK, as long as only banking is in New York, car production is in Michigan, produce n California, oil in Texas. As a resident of southeast Michigan, Detroit has three casinos with great restaurants, nice hotels, and entertainment. If i make a choice to gamble, it is nobody’s business other than mine.

    • Verdant Pine Trees says:

      What about the fact that many of these casinos also have entertainment, despite being outside Vegas? You want to see Martina McBride, Willie Nelson, Leanne Rimes, there’s a good chance that you can see them closer to home on the casino circuit.

      People don’t go locally just because they’re too broke to go to Vegas. I went for a day because I wanted to celebrate my wedding anniversary while saving the rest of my vacation time for something else special. It was good that there was something within easy driving distance.

      Also, what about the fact that many of these casinos, including the biggest in the country, are on Indian land, and give people who were screwed out of their land – something back? Indian casinos have a different vibe, and slightly different clientele, for sure. More penny slots and an atmosphere for Grandma – or Dad – to have fun in.

  14. krunk4ever says:

    Title is a bit misleading. It’s a $1.8 billion drop, not loss…

  15. Verdant Pine Trees says:

    Just as a reminder to those who think all gambling is useless… for MOST games, yes, the casino will always win in the long run.

    If you play video poker, and correctly, there is a slight edge over the house. We’re talking 100.7% . But you have to play with a strategy.

    There are, believe it or not, people who make a living playing video poker every single day. To them, it’s just a job. They often do pretty damn well with the comps too.

  16. Parapraxis says:

    Get rid of their stupid 6:5 payout on blackjacks, and then we’ll talk.

    Really, is a 3:2 payout really that unprofitable?

    (I am not a gambler myself, but I am an avid follower of statistical odds)

    • 44 in a Row says:

      Not with a multi-deck shoe, but in a single-deck game, yes, 3:2 is unprofitable. Wizardofodds.com’s house edge calculator comes out negative (i.e., a player advantage) for a single-deck S17 game, and a house edge of 0.008% for an H17 game. That’s compared to 1.2% for S17 and 1.4% for H17 with a 6:5 payout.

      Basically, although this may not be the case in smaller markets, in nearly every Vegas casino I’ve been in, 6:5 payouts only exist in conjunction with other gimmicks, things like single-deck blackjack or “party pits” with go-go dancers.

  17. frank64 says:

    Just to help you out. I did leave some spelling mistakes for ya! (:

    Your welcome.

  18. oldwiz65 says:

    Are they asking for a government bailout yet???

  19. Yo Howdy says:

    You can’t have less people. It’s fewer people.

  20. Tankueray says:

    I was just in Vegas last week. It seemed a little slow, but it’s a slow time of year. They were not stingy with the comps, and I did make some money and get to hang out with a friend I haven’t seen in a decade. I noticed last year that they raised the sales tax rate. But I got a great deal for airfare, hotel, and car for $500. The airfare would have been $450 from the airline, I normally get my room comped, but the car should have been at least $300. So cool.

    I did notice the lower number of staff and a few of them (non tipped) actually hinted about making less than $40,000 ish per year. That’s the first time that’s happened. I know there are a ton of foreclosures out there, but the housing is still priced way too high. It’ll get worse before it gets better.

    BTW – I am not rich by any means… I’m just single and Vegas is my thing. Actually blackjack is my thing. I can sit at the table and make 3 months salary in one night. If I’m not stupid enough to sit there, I can usually justify every trip.

  21. techmaster says:

    >In the world of gambling, one axiom holds true — In the end, the casino always wins

    Not true. There is one way to win; just like Global Thermonuclear War. The only way to win is to not play the game.