Gambling in America - Casino Gambling

Technically, a casino is any room or rooms in which gaming is conducted. When most Americans think of casinos, they picture lavish hotel and entertainment complexes, such as those in Las Vegas or Atlantic City, New Jersey. Before 1990 only Nevada and Atlantic City permitted casinos, but the 1990s saw regulations eased as states and municipalities sought the jobs and tax revenues that casinos could generate. In 2004 eleven states had commercially run casinos, twenty-eight had casinos operated by Native American tribes, and six had casinos at racetracks. Two additional states, Maine and New York, were planning to introduce the latter. The 443 commercial casinos ranged from large land-based facilities in Nevada, Michigan, New Jersey, and Louisiana to limited-stakes sites in South Dakota (maximum bet: $100) and Colorado (maximum bet: $5), to riverboat casinos in Indiana, Illinois, Missouri, Kansas, Mississippi, and Louisiana.

Gambling in Nevada

Nevada is the home of the nation's gambling capital, Las Vegas, and has more casinos statewide than any other—more than half the commercial casinos in the United States (256). Gambling was legalized in Nevada in 1931, giving the state a huge head start over relative upstarts New Jersey (1976), Louisiana (1991), and Michigan (1996) in allowing full-scale land-based commercial casinos. In 2003 the state's casinos employed 192,812 people and took in $9.6 billion in gross revenues from 48.6 million visitors. Casinos are located throughout the state, with many found on the border of California.

FIGURE 6.1

Although its clientele does include a few wealthy "high rollers," as well as many avid small-stakes gamblers, visitors to Las Vegas are increasingly families drawn by the wide range of entertainment options, reasonably priced buffet dinners, and over-the-top architecture featuring the likes of an imitation Statue of Liberty and Eiffel Tower. Though the city was once America's primary gambling destination, with the growing legalization of various forms of gambling around the country, as well as the proliferation of Native American casinos, Las Vegas has been forced to seek new ways to entice customers.

In addition to attracting visitors with gambling, in 2004 the city offered seventeen performance halls with 1,700 seats or more and featured live performances by such celebrity performers as Céline Dion and Elton John. According to a 2004 press release from Enhanced Air Technologies, a firm based in British Columbia, at least one major Las Vegas casino also pumps synthetic human pheromones into the air to increase business. The company claims its "Commercaire" pheromone instills a sense of comfort and security in humans, which makes them feel more at ease and increases the likelihood of repeat visits.

Riverboat and Cruise Gambling

Some people gamble on riverboats (either excursion boats or stationary barges) or on cruises. First introduced in Iowa in 1991, the modern riverboat is little more than a floating casino. By 2002 revenues from riverboat gambling totaled more than $6 billion.

TABLE 6.1

Indian tribal gaming revenues, 1998–2002
			Percentage of
Gaming revenue range	Number of operations	Revenues (in thousands)	operations	revenues	Mean (in thousands)	Median (in thousands)
Compiled from gaming operation audit reports received and entered by the National Indian Gaming Commission through June 30, 2004.
SOURCE: National Indian Gaming Commision Tribal Gaming Revenues, National Indian Gaming Commission, http://www.nigc.gov/nigc/nigcControl?option=TRIBAL_REVENUE (accessed July 15, 2004)
Gaming operations with fiscal years ending in 2003
$100 million and over	43	10,714,581	13%	64%	249,176	184,332
$50 million to $100 million	35	2,459,698	11%	15%	70,277	65,416
$25 million to $50 million	55	1,984,673	17%	12%	36,085	37,029
$10 million to $25 million	67	1,144,779	20%	7%	17,086	16,894
$3 million to $10 million	57	350,398	17%	2%	6,147	5,819
Under $3 million	73	76,019	22%	0%	1,041	833
Total	330	16,730,148
Gaming operations with fiscal years ending in 2002
$100 million and over	41	9,510,660	12%	65%	231,967	179,101
$50 million to $100 million	24	1,694,606	7%	12%	70,609	65,577
$25 million to $50 million	55	1,978,519	16%	13%	35,976	38,984
$10 million to $25 million	65	1,067,513	19%	7%	16,423	16,570
$3 million to $10 million	63	386,399	18%	3%	6,133	5,373
Under $3 million	100	78,359	29%	1%	784	461
Total	348	14,716,056
Gaming operations with fiscal years ending in 2001
$100 million and over	39	8,398,523	12%	65%	215,347	158,836
$50 million to $100 million	19	1,415,755	6%	11%	74,513	79,083
$25 million to $50 million	43	1,528,611	13%	12%	35,549	34,264
$10 million to $25 million	58	997,546	18%	8%	17,199	16,328
$3 million to $10 million	57	385,654	17%	3%	6,766	7,292
Under $3 million	114	96,257	35%	1%	844	575
Total	330	12,822,346
Gaming operations with fiscal years ending in 2000
$100 million and over	31	6,606,284	10%	60%	213,106	141,684
$50 million to $100 million	24	1,693,510	8%	15%	70,563	73,314
$25 million to $50 million	41	1,360,777	13%	12%	33,190	29,944
$10 million to $25 million	50	856,464	16%	8%	17,129	17,335
$3 million to $10 million	55	350,110	18%	3%	6,366	6,250
Under $3 million	110	91,545	35%	1%	832	541
Total	311	10,958,690
Gaming operations with fiscal years ending in 1999
$100 million and over	28	5,845,787	9%	60%	208,778	136,897
$50 million to $100 million	19	1,323,995	6%	14%	69,684	70,412
$25 million to $50 million	33	1,193,049	11%	12%	36,153	35,990
$10 million to $25 million	59	1,028,834	19%	10%	17,438	17,562
$3 million to $10 million	54	322,268	17%	3%	5,968	5,764
Under $3 million	117	86,907	38%	1%	537	395
Total	310	9,800,840

Although cruise lines emphasize that gambling is just one of many attractions to be enjoyed on their excursions, virtually all major cruise lines provide gambling. Many cruises, however, have a limit of $100 to $200 to control losses. "Cruises to nowhere," or day trips, are gambling opportunities available at coastal ports in Florida, Texas, New York, and Georgia. These ships travel three to twelve miles into international waters, where neither state nor federal gambling laws apply. Between 1985 and 2002 the day-cruise gambling industry more than doubled, growing from ten to twenty-five vessels.

Casino Gambling on Native American Reservations

The Indian Gaming Act of 1988 (PL 100-497) permitted Native American tribes to introduce gambling on their reservations. By 2003, 377 Native American gambling facilities were operating in twenty-eight states, ranging in size from bingo halls to full-scale casinos. Approximately 65% of the 341 federally recognized Indian tribes in the lower forty-eight states had revenues from gaming. Data from the National Indian Gaming Commission showed that total tribal gaming revenue grew from $9.8 billion in 1999 to $16.7 billion in 2003. (See Table 6.1.)

Gambling revenue helped provide employment for an estimated 205,000 Native Americans and non-Indians in gaming facilities, ancillary restaurants, and hotels, and brought in funds for housing, education, health care, and other reservation needs. Some tribes also distributed per capita payments to each member of the tribe from their gaming earnings. In 2003 this was

TABLE 6.2

Number of adults who gambled in a casino in the last 12 months, 2002
*The percentage of adults who gambled at least once in a casino in the last 12 months
SOURCE: "Adults Who Gambled in a Casino in the Last 12 Months," in Profile of the American Casino Gambler, Harrah's Entertainment, 2003, http://www.harrahs.com/about_us/survey/index.html (accessed September 10, 2004). Data from Harrah's Entertainment, Inc., NFO WorldGroup, and U.S. Census Bureau.
U.S. adult population (age 21+)	197.1 million
Casino gamblers	51.2 million
Casino participation rate*	26%
Average trip frequency	5.8 trips/year
Casino trips	297.2 million

done by seventy-three of the 224 tribal governments involved in gaming.

In 2000, according to the U.S. Census Bureau, the average per capita income of Native Americans on gaming reservations was nearly double that of those living on nongaming reservations, $14,737 to $7,781. Income on gaming reservations was also growing faster—it had gone up by 50.7% when compared with 1990, versus an increase of 16.4% for those on nongaming reservations. Unemployment rates on gaming reservations dropped by 17% during the decade, while the rate on nongaming reservations fell by only half this amount.