Adding Up the 2010 Gaming Numbers

Indiana’s riverboats experienced slight admissions (0.4%) and revenue (1.27%) declines in 2010, according to a recently release report from RubinBrown, a St. Louis-based accounting and business consulting firm that specializes in the hospitality and gaming industry.

The company’s 52-page (the Indiana specifics are on Pages 22-25) Gaming Stats report takes an in-depth look at commerical casinos in five states — Missouri, Colorado, Illinois, Indiana and Iowa. It also examines tribal gaming in five states.

A few of the highlights:

  • In Indiana, Horseshoe in Hammond accounts for more than 23% of both admissions and statewide revenue. Next in both categories is Hollywood in Lawrenceburg — with 14% of admissions and 18% of revenues.
  • Missouri continues to lead in casino revenue growth, bringing in over $1.7 billion in revenue and more than $450 million in commercial gaming tax revenue in 2010.
  • Colorado, the only other state to see an increase in adjusted gross revenue, experienced an increase of $25 million during 2010 and generated more than $107 million in commercial gaming tax revenue. The passage of Amendment 50 by Colorado voters in 2009, which allowed the maximum bet at casinos to be raised from $5 to $100 and permitted properties to remain open 24 hours a day, can be attributed as one of the main causes for Colorado’s revenue increase in 2010.
  • Although AGR and admissions declined in 2010, 1.59 and 3.59 percent respectively, Iowa-based casinos saw patrons spending more per trip on average from the previous year.
  • Illinois, again, experienced the most marked drop in revenues among Midwestern states, with a statewide decrease of 4 percent for commercial gaming revenues. Also significant, Illinois riverboat gaming fell to its lowest levels in a decade and horse racing and lotteries remained flat. However, these revenues, according to Adams, may stabilize in late 2011 due to the opening of the Rivers Casino near Chicago’s O’Hare airport. The new facility is expected to generate $150 million in annual tax revenue and create over 1,000 permanent jobs in the Chicago area.
     

Looking for a Lottery Rebound

Personally, I have nothing against the lottery. In fact, I joined co-workers back in the 1990s in one of those infamous "everybody throw a few dollars in and we’ll all retire early when we hit it big" plans, only to never, ever get close in several years of playing. We really only earned enough once in a while to buy more tickets. But then I guess that’s why they call it a game of chance.

The number of lottery games have seemingly multiplied at a rapid pace since then. But with the Great Recession of the last few years, and certainly a few other factors, far fewer lottery players have been taking their chances.

According to the National Conference of State Legislatures, lottery revenues declined in 25 states in fiscal year 2009. In addition, they were flat in 10 states and increased in only seven. Indiana had the dubious distinction of the biggest drop, with revenues going down 18.1%. Puerto Rico, Oregon and Arizona were the only others with double digit drops.

North Carolina, with a relatively new lottery, saw revenues increase 17.4%. Others on the positive side of the ledger: North Dakota, Iowa, Ohio, Kentucky, Louisiana and Minnesota.

Finally, the seven states that have not authorized lotteries: Alabama, Alaska, Hawaii, Mississippi, Nevada, Utah and Wyoming.

At one point, many in Indiana questioned whether the lottery was a good idea. That was before horse racing, riverboats, racinos and the like. The tax dollars generated by the gaming industry have become an essential part of the state budget. That’s the safest bet one can make.

Ohio Casinos Will Diminish Indiana Winnings

The fifth time was the charm for supporters of gaming in Ohio. Voters had rejected the approval of casinos in Ohio four times over the last couple decades, but apparently the Buckeye State’s fiscal concerns trumped the opposition as the referendum to allow land-based gambling operations in Cincinnati, Cleveland, Columbus and Toledo was approved with 53% of the vote in November’s election. Gaming in Ohio will certainly help that state with its revenue problems, but will just as certainly make Indiana’s fiscal picture worse by cutting into our gaming tax revenues.

Indiana currently receives about $250 million dollars a year from three riverboats that are within a short drive of Cincinnati. It is estimated that up to 38% of the riverboat patrons come from out of state. The Hollywood Casino in Lawrenceburg and Grand Victoria Casino & Resort in Rising Sun are just minutes from Cincinnati and could both be seriously impacted by a casino there. The Belterra Casino Resort & Spa in Vevay is a little further down the Ohio River, but likely would also feel the effects.

Additionally, the other casinos could draw away some of the traffic at the already greatly suffering Hoosier Park Racing & Casino in Anderson. All told, Indiana gaming tax revenues could drop by as much as $100 million. These likely future losses to Indiana follow the losses now being experienced at the Blue Chip Casino in Michigan City due to the opening of a new tribal casino last year just across the border in Michigan. In addition, Kentucky could well be the next state to siphon off revenues as the pressure mounts to allow slots at its horse tracks.

Bottom line: As more players enter the game, Indiana’s share of the winnings is sure to diminish.

Making a Safe Bet Against Gaming Reversal

Those who know me are aware that I’m not averse to a little "gaming" now and then. In other words, I truly enjoy an annual trip or two to Las Vegas and I’ve managed to find all but one or two of Indiana’s various riverboat/horse track facilities.

The intention is not to start a debate on the morality of gambling. (If you wish to do so, have at it). My reasoning is to point out that I would be shut out of any such activity in Illinois, if professor John Warren Kindt had his way.

The Urbana-Champaign prof testified before state lawmakers that the key to the state’s economic recovery is to ban gambling. That is despite the state’s $1.3 billion in casino tax and lottery revenue in 2008.

It’s not going to happen in Illinois — or Indiana. The "will we have gambling or not?" argument was settled about 20 years ago. Indiana is a big player in the gaming business. Despite numerous calls from lawmakers and others for no further expansion, don’t bet on it.

By the way, I was a winner picking against the professor’s Illini in its NCAA basketball tournament first-round loss to Western Kentucky.