-- Government revenues from state-sanctioned gambling operations grew modestly in fiscal year 2010, after an unprecedented dip during the previous year, according to a new report from the Rockefeller Institute of Government.
States saw a 2 percent gain in revenues from lotteries, casinos, racinos and pari-mutuel wagering during the last fiscal year, compared to 2009, Institute researchers Lucy Dadayan and Robert B. Ward found. In total, states collected almost $24 billion in revenues from gambling in fiscal 2010. Despite the year-over-year gain, receipts in 2010 were still slightly below the 2008 level.
One state, Pennsylvania, accounted for nearly half the nationwide growth in gambling revenues in fiscal 2010. Pennsylvania legalized poker and other table-game operations at its casinos and racinos. The state remains second to New York in total gambling-related revenues, followed by Florida and New Jersey.
While casinos and racinos are the focus of attention in many states, lotteries remain the primary source of gambling revenue to governments. Among the four major types of legalized gambling examined in the report, revenue gains were seen in lottery, casino and racino operations in 2010, while pari-mutuel wagering (such as betting on horse races and other competitive events) declined.
Receipts from legally sanctioned gambling represent a relatively small portion of overall state revenues. But such collections have provided a "remarkably consistent" 2.1 percent to 2.5 percent of own-source revenues between 1998 and 2009, the report's authors state.
"While such an amount may seem almost inconsequential at first glance, governors and legislators often face politically difficult choices in closing budget gaps that are much smaller," they write. "Incremental gains in collections from comparatively small sources of revenue, such as gambling, can be highly attractive when alternative options are unpopular tax increases or service reductions."
Over a period of years, growth in gambling-related revenue does not match growth in tax revenues except when policymakers expand lotteries, casinos or related activities, the Institute found. From 1998 through 2010, revenue from gambling operations that states had legalized at the start of the period rose by 35 percent. States' tax revenues increased by 49 percent over the same period, which included two recessions.
At least 10 states have enacted measures to expand gambling and generate additional revenue in the wake of the Great Recession, the Institute found.
"Gambling legalization and expansion during tough times produce significant short-term revenue increases in some jurisdictions. But if experience is a guide, such growth will not continue over time," Dadayan and Ward conclude. Black: States' Gambling Revenues Rose in 2010
For a full copy of the report, visit www.rockinst.org.