Gambling revenue is estimated to rise around the world, reaching $144 billion in 2011.

Total US gaming revenues $57.2 billion in 2009.

The US is forecasted to remain the largest region although Asia Pacific will be the fastest growing with a projected 23.6% increase compounded annually to $62.9 billion in 2014 from $21.8 billion in 2009.

The gambling Markets of Europe, Middle East and Africa will grow 1.9 percent each year, from $25.2 billion to $27.8 (PricewatershouseCoopers, 2010).

Gross gambling revenue (GGR) is the amount wagered minus the winnings returned to players.

GGR is the figure used to determine what a casino, racetrack, lottery or other gaming operation earns before taxes, salaries and other expenses are paid — the equivalent of "sales," not "profit."

Past five years have seen mature markets in North America, Europe, Australia/N.Z.

Revenues flattening Increased consolidation & diversification Increasing social backlash

Asia is the emerging growth market

Greater liberalization and tentative introduction of gambling in Singapore, Korea, Japan, Thailand, Taiwan, India, China

Internet Gambling increasingly prevalent

Park Place Entertainment is world's largest casino gaming company with 30 resorts in 5 countries (U.S. Canada, Australia, South Africa, Uruguay). Canada: Casino Windsor, Casino Nova Scotia (owned by Ont govt., day-to-day operations contracted out to Park Place)

MGM Mirage is the world's #2 gaming company with 19 properties in 4 countries; took over Mandalay in 2004

Increasing consolidation

International Game Technology has 74% of North American market for EGMs. In Jan 2005 it took over the major Canadian gaming machine distributor, Hi-Tech Gaming.

YEAR TOTAL COMMERCIAL CASINO TOTAL GAMING

1999   22.2   $58.2

2000   24.3*   $61.4

2001   $25.7*   $63.3

2002   $26.5*   $68.6

2003   $27.02*   $72.9

2004 $28.93 $78.8

2005 $30.29 $84.4

2006 $32.42 $90.9

2007 $34.13 $92.3

2008   $32.54   N/A

Note: All amounts in billions

*Amount does not include deepwater cruise ships, cruises-to-nowhere or noncasino devisesSources: American Gaming Association, Christiansen Capital Advisors LLC

Casino Market 2008 Annual Revenues

1 Las Vegas Strip $6.121 billion 2 Atlantic City, N.J. $4.545 billion

3 Chicagoland, Ind./Ill. $2.251 billion

4 Connecticut $1.571 billion5 Detroit $1.360 billion

6 Tunica/Lula, Miss. $1.105 billion

7 St. Louis, Mo./Ill. $1.031 billion

8 Biloxi, Miss. $951.27  million9 Shreveport, La. $847.61 million

10 Boulder Strip, Nev. $836.60 million

11 Reno/Sparks, Nev. $779.38 million

12 Kansas City, Mo. (includes St. Joseph)

$756.22 million

13 Lawrenceburg/Rising Sun/Belterra, Ind.

$731.65 million

14 New Orleans, La. $701.37 million

15 Lake Charles, La. $651.23 million

16 Downtown Las Vegas, Nev.

$582.46 million

17 Laughlin, Nev. $571.18 million18 Black Hawk, Colo. $508.69 million

19 Yonkers, N.Y. $486.46 million 20 Council Bluffs, Iowa $468.52 million

Also a trend toward increased diversification and more destination type casinos (e.g., Fallsview in Niagara Falls; casino de Montreal has signed a contract with Cirque de Soleil)

Net revenue from government-run lotteries, video lottery terminals (VLTs), casinos and slot machines (not in casinos) rose steadily from $2.73 billion in 1992, before levelling off and remaining at over $13 billion since 2005, but then dropping for the first time in 2008, to $13.67 billion from $13.70 in 2007.

Just under half of women and men living alone reported spending money on at least one gambling activity; however, the men spent 50% more than women—$814 compared with $516.

Gambling participation and expenditure rates increased with household income. For example, 34% of households with incomes of less than $20,000 gambled in 2007 and spent an average of $678, while equivalent figures for those with incomes of $80,000 or more were 58% and $798.

Albertans spent a total $25 billion in 2008, down from$26.3 billion in 2007(AGLC, 2009).

Of the $25 billion in total gaming revenues collected about $15.5 billion came from slot machines, $8.9 billion from VLTs and the rest from electronic bingo and lottery ticket sales on such things as Lotto 6/49.

2%

53%34%

7%3%

1%

Provincial Governments

Private Operators

Charities & CommunityOrganizations

Horse RacingAssociations

First Nations

Federal Government

Statistics taken from 2003 fiscal year

3.2% of Canadian adults are affected by moderate to severe problem gambling (Williams, 2009).

2.2% of youth aged 15–24 are affected by

moderate risk or problem gambling (Huang, 2007).

Top 10% of spenders account for the majority of gaming revenues. Yet very little is known about the socioeconomic characteristics of these individuals.

A portion of these people are wealthy ‘high rollers’. In Las Vegas high-rollers account for 5% of gamblers but generate 40% of total revenue. High rollers account for a smaller portion of revenue in most other jurisdictions.

Problem gamblers account for significant portion of gambling revenues. In Canada, roughly 33% of gambling revenue comes from problem gamblers. Proportion derived from problem gamblers also dependent on the type of gambling: highest for EGMs (60%) and casino gambling, lowest for lotteries (20%).

Increase in employment (47,500 persons employed in the Canadian gambling industry; 600,000 in U.S.) (unemployment rates, welfare & unemployment insurance payments decline by about 1/7th (Gerstein et al., 2002)). Wages not high, however, 1/3 compensation comes from tips.

Increased government tax revenues or direct gambling revenue (a voluntary tax that prevents involuntary tax increases).

Significant revenues for charities.

Increased revenue and employment to complementary industries (hotels, tourist facilities)

Increased property values (although this also means increased rental costs)

May repatriate gambling money flowing outside the jurisdiction.

Private benefits and costs

Social benefits and costs

Are we aware of the costs of gambling (can we know?) borne voluntarily

Is the community aware of the costs

Gamblers fully informed

Gamblers must be rational

Gamblers must be required to bear the total costs of their gambling – if one of these conditions fails to be satisfied an element of social cost exists.

Displacement or cannibalization of competing industries

particularly certain gambling industries: horse racing, bingo some demise of entertainment and amusement industries

(bars, restaurants, etc.) Some demise of general merchandise

Increased infrastructure costs (roads, sewers, police, utilities, etc) due to increased tourism

Economic costs due to increased problem gamblers

Absenteeism and loss of productivity; embezzlement Costs of police, trials and incarceration Health and treatment costs

Inflow of money or resources from outside the jurisdiction.

Creation of something of value that adds to wealth of the jurisdiction (because of its intrinsic wealth) or increases the value of other things in the jurisdiction.

Increasing the number and frequency of monetary transactions between individuals so that more people can benefit from the existing wealth within a district.

Positive social effects due to positive economic effects (e.g., employment, govt revenues)

Gambling as an enjoyable leisure activity; a form of adult play. This is how it has always been seen in Chinese culture. The pleasure of fantasizing about being rich The pleasure of being intoxicated (gambling as a high) The pleasure of escape (gambling as theatre). Perhaps for some

it is an effective way of handling stress.

Gambling may provide social support to isolated older adults.

May encourage an entrepreneurial, risk-taking spirit. Provides players with an opportunity to demonstrate strength of character and commitment to valued social codes such as risk-taking, courage and honesty.

Legal gambling has a dampening effect on illegal gambling and corruption. In western Canada illegal gambling still extensive in the four

largest cities—Vancouver, Calgary, Edmonton, and Winnipeg; less so in medium-sized cities and a minor concern in rural areas (Smith & Wynne, 1999)

A small portion of laundering money is laundered in casinos Mostly sports betting with a bookmaker, unauthorized poker

clubs, unlicensed VLTs, and offshore lottery sales (Smith & Wynne, 1999)

(if govt offered competitve odds it would drive out all illegal gambling)

In Ontario, there are illegal gaming venues offering blackjack, poker, roulette; patronized because they offer services not available elsewhere (prostitution; house credit; drugs)

Illegal gambling will always exist if it has a competitive edge (more convenient, better odds, different games, house credit, drugs/prostitution, tax-free winnings)

Undercuts work ethic?

Corrupting influence on society because it promotes materialism and hedonism?

Creates divisions within society because of different attitudes and religious beliefs about gambling (e.g., intra-tribal divisions in many tribes that established casinos)

Corrupting influence on governments and nonprofit sector. Their dependency on the revenue blinds them to the fact that 1/3 of this money comes from problem gamblers.

Roughly 3-4% of population in Canada is a problem gambler, which represents a significant increase from 20 years ago. depression suicide bankruptcy Crime Work or school problems Health problems Problems with Family or Friends

Problem gamblers impact their families with all of the above, plus: Spousal abuse or divorce Child neglect Modelling of gambling to children

Impact on PG prevalence rates tend to take a few years, then stabilizes, then perhaps decreases. Specific impact on PG prevalence rates also very much influenced by social cohesiveness/vulnerability of society (e.g., soft drugs essentially legal in Netherlands, but rates of cannabis and hard drug use among the lowest in western world).

Depends on whether the gambling patrons are tourists or locals. If locals, then most of the economic ‘benefits’ represent cannibalization of other

industries and no ‘net’ increase in wealth to the jurisdiction. If tourists, this represents a true inflow of new wealth.

If locals, you increase problem gambling prevalence rates in your own populace. If tourists, the ‘problems’ go home with the tourists.

Depends on the type of gambling (i.e., some forms like lotteries create very few problem gamblers, other forms, like VLTs create high proportions of PGs and very few employment benefits).

Depends where where the profits go Employees local or not Owners local or not Profits reinvested locally or on other projects elsewhere

Depends where the supplies are purchased from (gambling equipment, furniture, food, hotel supplies)

Depends where the taxes and revenues go (taxes/revenues going to the jurisdiction or federal/provincial level; tax money reinvested in the region?)

Las Vegas 90% money from visitors owners local and reinvest in other local operations problem gamblers go back home not a manufacturing or agricultural region so a lot of money spent

on supplies from elsewhere

Atlantic City Similar to Las Vegas

Many U.S. Native casinos Native casinos also do not pay federal tax, so revenues stay on site

Tourist-restricted or tourist-dominated venues around the world (e.g., France, Vietnam, Macao, etc.)

Large, destination-style casinos on Canadian border (Windsor, Niagara Falls) that draw significant portion of patronage from U.S.

Everywhere else

In the United States, comprehensive socioeconomic analyses of Aboriginal Gambling has determined that bands that introduce casinos have resultant: significantly better financial status -> which presumably results in better social & health

services significant increases in employment (7-26%) significant decreases in poverty (14%) significant increase in house prices ($6000) this increase in employment, etc. presumably has positive social benefits for the families of

these employed workers significantly higher bankruptcies (10%) significant increase in crime, although perhaps not on a per capita basis (as these

communities also tend to have significantly increased population (5-12%)) Several reservations have experienced intra-tribal conflict, often between elders and the

young (gambling having a commercial function rather than a ceremonial one; worsening of existing addiction problems).

The economic benefits have been very uneven. Many Indian casinos are not profitable (13% of the casinos accounted for 66% of the revenue).

In several cases the biggest winners are non-Aboriginal investors. Misappropriation of casino revenue has occurred in several situations.

In Canada, there hasn’t been a similar comprehensive socioeconomic analysis of the costs and benefits. However: The Saskatchewan First Nation casinos are a major economic success story ($100M in 2004;

70% of jobs occupied by Aboriginals). Casino Rama generates substantial revenues for Ontario Aboriginal groups. Sydney Casino in Nova Scotia generates significant revenues for N.S. Aboriginal groups. Mohawks in Quebec reaping huge revenues from Internet gambling. Been a few economic failures as well.

Conclusions On the whole, it can be said that most Aboriginal casinos have tended to

produced clear economic benefits for the individual tribes operating them that are offset, to some extent, by increased social problems. In weighing this trade-off, it is important to realize that Aboriginals already have the highest rates of problem gambling in North America (in Canada, provincial surveys suggest 10-15%).

In both the U.S. and Canada there are features that clearly differentiate successful casino situations from the unsuccessful ones: having a monopoly, location close to major population centres, and provision of ‘destination style’ casinos.

At a macro or jurisdiction-wide level, net economic or social benefits from casino gambling are often not present. First, gambling generally doesn’t create wealth, it generally just redistributes it. Economic

gains in one community are typically offset by economic losses in another community. Economic gains that the government accrues from gambling are typically offset by economic losses in privately run entertainment enterprises. The only situation where this is not true is where your patronage comes from outside your jurisdiction (e.g., Las Vegas, Atlantic City), in which case new wealth does flow to your jurisdiction (and the problems go home with the tourists).

Secondly, this is not an innocuous redistribution of wealth, as the gambling industry creates problem gamblers (perhaps 3-5% in AB). Problem gamblers have negative social and economic impacts on themselves, their families, their employers, and society.

Thirdly, it is ethically problematic for any jurisdiction to generate revenues from gambling, as roughly 35% of gambling revenue comes from moderate risk or severe problem gamblers. This is particularly true for gaming machines (slots/VLTs) (60%), which comprises the bulk of casino revenue.