Casinos Revenues are in a Dicey Situation
Has the nation reached a saturation point when it comes to casinos? According to a recent Stateline article, the answer may be “yes.” Casino gambling is in a tricky spot right now because some northeastern states are trying to add more casinos while others need to use tax payer money to “bail out” failing casinos.
There are two forces that are going against the gambling industry. The first is the varied nature of state taxes on the casinos. Both New Jersey and Delaware saw big drops in tax revenues from casinos. This has prompted Delaware Governor Jack Marksell to infuse three casinos with 8 million dollars while considering restructuring the tax system. New Jersey, under the direction of Chris Christie, passed a $262 million tax credit plan to help revive Atlantic City’s Revel Casino while other states have cut tax rates.
The second force is increased competition from neighboring states. It used to be that people only had the option of one or two states to go gamble. The expanded number of casinos means that people can stay closer to where they are to gamble. This siphoning off of customers is also eating into casino revenues. More worrying to some analyst is the fact that even more casinos are being considered to be built states such as New York and Massachusetts. Said Lucy Dadayan of the Nelson Rockefeller Institute, “The pool of gamblers is only that big and the expansion of casinos and racinos (race tracks with betting) attracts only a smaller pool of new gamblers.”
One potential solution may be online gaming, which Nevada already allows and both Delaware and New Jersey are considering. The revenue estimates vary and the “players have to be within the state borders to make their wagers.” The same potential problem however also exists for online gaming, which is that ten other states are considering online gaming thereby reducing the potential ameliorative effect. The only permanent solution to this problem was said by Tom Cook, the secretary of finance for Delaware, “We need a different set of (younger) patrons.”