BUSINESS

Casino Industry Accounts For Significant Slice Of U.S. Economy: Study

02/08/2012 08:56 am ET

As the U.S. economy sagged, gambling was there to try and prop it up.

At least that's the finding of the American Gaming Association. The trade association released a study this week with the attention-grabbing assertion that casinos generated roughly the equivalent of one percent of U.S. gross domestic product in 2010 -- or nearly $125 billion of the country's $14.5 trillion. In addition, 566 casinos in 22 states supported 820,000 jobs and directly took in $49.7 billion from visitors, according to the research.

Frank J. Fahrenkopf, Jr., president and CEO of the gaming association, called casinos a vital part of the economy in a release accompanying the study.

Gambling proponents often attempt to persuade cash-strapped states to expand casinos, and the study took no exception, pointing to positive casino effects beyond their walls. Two-thirds of the spending generated by casinos was spread out in the immediate and surrounding counties, the research said. Another third happened in counties further afield.

The report comes amid mixed progress for pro-gambling forces. Massachusetts recently approved three new casinos, sparking fierce competition to win the licenses. But a proposal for a massive casino resort in Miami has stalled in the Florida legislature.

According to the Nelson A. Rockefeller Institute of Government, casinos and lotteries comprise 2 percent of revenue in states that have them. That $16 billion the gaming association said casinos paid in taxes has come in handy for many struggling regions. Staggered by the financial crisis, 46 states have trimmed programs for health care, the elderly, the disabled and in education since 2008, according to the Center on Budget and Policy Priorities.

The gaming association's research also touted the power of casinos to bring in revenue unrelated to gambling. It said casinos helped to bring in $15.2 billion of income from food, retail, entertainment and the like.

But the study didn't touch on the social cost of gambling that opponents say mitigates the benefits. Slot machines alone take $1 billion a day from Americans, and the National Council on Problem Gambling estimates that compulsive gamblers cost the country $6.7 billion every year.

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