Casinos are powerful drivers in US economic activity netting over $300 billion a year
By Shadrack Kairu
According to a new study by the American Gaming Authority (AGA), the casino gambling industry in the United States now drives nearly $329 billion in total economic activity annually, cementing its status as a pivotal economic anchor across dozens of states nationwide.
The extensive report underscores the gaming industry’s monumental growth, with recent metrics indicating the sector’s aggregate impact has swelled over 26% since 2017. That translates into 1.8 million American jobs underpinned by the industry today, alongside $104 billion in associated wages and benefits. Additionally, $52.7 billion flows into public coffers via taxes applied on elements like casino earnings, supplier sales, and employee incomes.
Breaking down the economic impact of the casino industry in the US
A closer analysis of the sector’s full footprint shows a multiplier effect that goes far beyond proceeds directly won by commercial, tribal, and online casinos. In fact, direct gaming revenues accounted for only 22.5% of the industry’s total $329 billion US economic impact calculated for 2022.
The research also reflects substantial gains registered across critical metrics since the last AGA analysis published in 2018 using 2017 metrics. Over those five years, aggregate economic activity has expanded by 26% fueled especially by swelling employment, capital investments, and tax payments tied to the national gambling ecosystem.
While casino properties themselves remain top contributors, the loosening of gaming laws has paved the way for the emergence of a sprawling industry web including construction companies, tourism bureaus, entertainment firms, restaurants, tech vendors, payment processors and countless other beneficiaries.
For example, when you zoom in on core operations, America’s commercial and tribal casino sectors directly supported around 1.8 million jobs last year. This includes about 700,000 positions within casinos or affiliated hospitality businesses.
Employee wages have notably risen above 2017 levels, totaling $24 billion nationwide during 2022. This showcases how casinos increasingly provide middle-class incomes, especially in smaller cities or rural areas often eager to attract gaming development.
Given ongoing state-led pushes to legalize both retail and online gambling coupled with further post-pandemic recovery anticipated, projections point to America’s gaming sector enlarging its world-leading status over the decade to come.
The industry contributed $52 billion in taxes to the government in 2022
In terms of tax contributions, AGA’s analysis calculates that federal, state and local taxes collected from the gambling industry exceeded $52 billion for 2022. This drastic 29% increase over 2017 levels highlights gambling’s integral fiscal role in bankrolling critical public services countrywide.
As AGA CEO Bill Miller observed regarding the tax windfall, “Think back to where we were a few years ago with nearly 1,000 casinos, almost all of them closed. Today, we’re seeing record revenue in the industry.”
Underscoring this viewpoint, multiple authorities described the sheer magnitude of casino tax infusions and associated job creation as fundamental for myriad municipalities.
“Despite some economic headwinds, casinos remain powerful drivers of economic activity,” explained gambling historian David Schwartz of the University of Nevada, Las Vegas. He added that climbing annual revenues signal gaming’s enduring popularity amongst Americans from coast to coast.
Likewise, Stockton University Professor Jane Bokunewicz noted that besides tax proceeds, many casinos constitute the largest overall employers within surrounding populations. Through hiring local workers and utilizing regional vendors, such enterprises confer an instrumental economic role where established.
“Casinos are often the largest employers in a region, with major commitments in terms of wages and benefits. People employed by casinos use those wages and benefits to purchase additional goods and services, generating secondary economic impact.”
Stated Bokunewicz
By investing substantially in amenities and area infrastructure whilst providing careers that foster wider spending, casinos frequently catalyze prosperity indirectly. This manifests via revitalized local establishments as employed residents afford more recreation and shops flourish when visitor numbers swell.
As millions countrywide already rely on casino-derived incomes, upgrading regulations to attract further development could thus be prudent for state and city leaders pursuing economic growth.
The casino industry continues to grow exponentially in the US
Historically, the concept of legalized gambling originally took root back in 1931 when Nevada permitted gaming locally before later welcoming the famous casino hub Las Vegas. Over subsequent decades, many other states followed across America.
For example in 1976, New Jersey became the second state to allow commercial betting, including within the now-iconic casino destination Atlantic City. 11 more states gradually followed from 1989 to 2011, authorizing slot machines or full-scale casino gambling venues.
Today, the industry continues to see unprecedented levels of growth as more states acknowledge the potential this industry holds in terms of spurring their local economy. At the same time, more policies are still being introduced to tame issues arising with this growth.
The rise of online casinos
A big part of the growth of the gambling industry today can be attributed to the increasing capabilities of internet-connected mobile devices. As smartphones and tablets enable convenient real-time access to games, once-obscure niches like online bingo and digital lottery services have gone mainstream.
For example, there has been a sharp rise in the number of online sweeps casinos and other forms of social casinos. These platforms enable players to play using virtual coins – usually named Gold Coins and Sweepstakes Coins. The former holds no monetary value and is meant purely for entertainment purposes, while the latter can sometimes be redeemed for prizes like gift cards or vacations. While not tied to real money, these new platforms allow participants to experience the excitement and engagement of various casino-style games from slots and poker to bingo and keno.
Of course, there has been a lot of debate around whether such platforms should be considered a form of gambling or not from a legal standpoint. Proponents argue that since users don’t wager or win real money, no actual gambling occurs. However, others counter that the games too closely emulate US real money online casinos, potentially serving as a gateway, especially for minors. Lawmakers continue to grapple with appropriately regulating such new internet entertainment spaces. Ultimately though, their rising popularity speaks to humanity’s timeless attraction and embrace of gambling for entertainment.
What does the future hold?
With even more states vying to welcome casino gaming as awareness builds around associated fiscal advantages, projections suggest industry growth reaching a compound annual growth rate of 12% annually moving forward nationwide. Supported by ballooning iGaming as online platforms get regulated progressively, financial experts foresee casinos becoming nearly a $150 billion market by 2030.
The recognition of gaming’s economic potential combined with the increasing digitization that continues to expand access promises an incredibly vibrant future for US gambling interests. Couple this with the growing societal acceptance and you can easily tell that the coming decades point towards increasing integration of gambling into mainstream recreational ecosystems.
Now driving 1.8 million jobs and billions in incomes and taxes, the sector’s sheer scale debunks outdated notions of casinos as magnets for vice. Instead, the country now appears to fully embrace their role in uplifting local economies from coast to coast. As that understanding widens, so too will gaming’s already mammoth $329 billion footprint as casinos morph into mainstream entertainment and catalysts for shared growth.