Gambling Gambit No Panacea For States Seeking Non-Tax Revenue

A recent study by the Nelson A. Rockefeller Institute of Government shows that states that turned to gambling as a fix for revenue woes have usually been disappointed with the results. And that may mean an end to the flurry of new casino building that has helped keep some segments of the foodservice equipment and supplies market busy for the past few years.

The report demonstrates that tax and fee revenues from gambling activities have softened considerably in recent years, due, in part, to market saturation and industry cannibalization. The report indicates that inflation-adjusted tax and fee revenues from major sources of gambling grew only $0.5 billion or 1.8% for the nation as a whole between 2008 and 2015. And gambling did not do well in 2015 versus 2014. Lottery revenues declined 0.7% in real terms in fiscal 2015, with 27 states reporting declines. Revenues from casinos and horse-racing tracks with casino-type games grew only 1.1% in real terms in 2015, with most of that gain coming from new facilities in Ohio and Maryland.

The study warns that “State officials considering expansion of existing gambling activities or legalization of new activities should weigh the pros and cons carefully.”

A full copy of the report, titled State Revenues From Gambling: Short-Term Relief, Long-Term Disappointment, is available at rockinst.org/pdf/government_finance/2016-04-12-Blinken_Report_Three.pdf. “””