Commercial casinos are profit-making businesses owned by individuals, private companies, or large public corporations. The term commercial casino is used in the United States to indicate a gaming facility that is not owned and operated on Native American lands by a tribal government. (See Chapter 5.) Casinos are closely regulated by state governments. Some states allow land-based casinos, whereas others restrict casino games to floating gambling halls on barges or riverboats. A handful of states allow casino games such as slot machines at other locations, including horse and dog racetracks or other commercial establishments. Some states allow only limited-stakes gambling, in which a limit is placed on the amount that can be wagered.
In 2008 State of the States: The AGA Survey of Casino Entertainment (2008, http://www.americangaming.org/assets/files/aga_2008_sos.pdf), the American Gaming Association (AGA) states that in 2007 there were 467 commercial casinos operating in 12 states: Colorado, Illinois, Indiana, Iowa, Louisiana, Michigan, Mississippi, Missouri, Nevada, New Jersey, Pennsylvania, and South Dakota. These included both land-based and floating casinos. Major markets for floating casinos included Chicago; Tunica, Mississippi; the Mississippi Gulf Coast; and Bossier City, Shreveport, and Lake Charles, Louisiana. Some of the largest gaming companies, including Harrah's Entertainment, MGM Mirage, and Penn National Gaming, operated floating casinos. Nearly one-third (32%) of casino patrons visit casinos in the West, about a quarter visit casinos in the north-central part of the country (25%) or the South (24%), and 19% visit casinos in the Northeast. (See Figure 4.1.)
The casino industry measures its revenue by consumer spending, that is, the money gamblers spend while gambling. According to the AGA, consumer spending on gambling in 2007 totaled $34.1 billion. In gambling terminology, the handle is the gross amount of money wagered by gamblers. The money that the gamblers win is called the payout, and the money that the casinos keep is called the gross gaming revenue or the casino win.
Gambling has a long history in Nevada. It was common in the frontier towns of the Old West but was outlawed around the end of the nineteenth century, a time when conservative values predominated. However, illegal gambling was widely tolerated throughout the state. In 1931 gambling was legalized again in Nevada. The country was in a deep economic depression at the time, and gambling was seen as a source of needed revenue.
Casino development was slow at first. Many business people were not convinced that the desert towns of Nevada could attract sufficient tourists to make the operations profitable. In 1941 El Rancho Vegas opened in Las Vegas. Five years later the mobster Benjamin “Bugsy” Siegel (1906–1947) opened the Flamingo Hotel and Casino, also in Las Vegas. (Siegel was eventually murdered by his business partners because of cost overruns.) Organized crime's relationship with Las Vegas continued for thirty years and tainted casino gambling in many people's minds.
Even though the state of Nevada began collecting gaming taxes during the 1940s, regulation of the casinos was lax until the 1970s. Organized crime figures were pushed out of the casino business after Congress passed the Racketeer Influenced and Corrupt Organizations Act in 1970. Corporations moved in to take their place. In 1975 gaming revenues in the state reached $1 billion, according to the Las Vegas Convention and Visitors Authority (LVCVA), in “Stats & Facts: History of Las Vegas” (2008, http://www.lvcva.com/press/statistics-facts/vegas-history.jsp). The AGA notes in 2008 State of the States that by 2007 the gambling industry employed 201,953 people in Nevada and contributed $1 billion in tax revenue into the state's general fund.
Many different forms of legal gambling are available in Nevada, including live bingo, keno, and horse racing; card rooms; casino games; and off-track and phone betting on sports events and horse races. Establishments such as bars, restaurants, and stores are restricted to fewer than fifteen slot machines. Casinos are allowed to have more than fifteen machines; many have hundreds of slot machines.
According to the AGA, in 2007 there were 270 non-tribal, commercial casinos operating in Nevada—by far the most of any state. According to the Nevada State Gaming Control Board, the state's commercial casinos generated $12.3 billion in revenue from gambling operations during 2007, up from $12.1 billion in 2006. (See Figure 4.2.) Casino revenues have been increasing steadily
TABLE 4.1 Consumer spending on casino gaming, by selected states, 2006 and 2007
*There are no 2006 statistics for Pennsylvania because stand-alone casinos there only became operational in 2007.
SOURCE: ‘State-by-State Consumer Spending on Commercial Casino Gaming, 2006 vs. 2007,’ in 2008 State of the States: The AGA Survey of Casino Entertainment, American Gaming Association, 2008, http://www.americangaming.org/assets/files/aga_2008_sos.pdf (accessed August 1, 2008). Reprinted with permission of the American Gaming Association. All rights reserved.
Colorado$782.098 million$816.130 million+4.4%
Illinois$1.924 billion$1.983 billion+3.1%
Indiana$2.577 billion$2.625 billion+1.8%
Iowa$1.173 billion$1.363 billion+16.2%
Louisiana$2.567 billion$2.566 billion0.0%
Michigan$1.303 billion$1.335 billion+2.4%
Mississippi$2.570 billion$2.891 billion+12.5%
Missouri$1.592 billion$1.592 billion0.0%
Nevada$12.622 billion$12.849 billion+1.8%
New Jersey$5.219 billion$4.921 billion-5.7%
Pennsylvania_ *$1.090 billionN/A
South Dakota$89.828 million$98.223 million+9.3%
since 1997, although they leveled off for a brief period following the terrorist attacks of September 11, 2001, and then again between 2006 and 2007 in response to economic recession. Consumers spend by far more money on commercial casino gaming in Nevada than in any other state. (See Table 4.1.)
Nevada casino revenue, or casino win, for 2007 is broken down by gambling category in Table 4.2. Slot machines accounted for $8.5 billion (66%) of the casinos' gaming revenue of $12.8 billion. Table games brought in $4.2 billion in revenue in that year. According to the Nevada State Gaming Control Board, in State of Nevada Gaming Revenue Report: Year Ended December 31, 1989 (1999, http://gaming.nv.gov/documents/pdf/1g_98dec.pdf), gross gaming revenue jumped from
TABLE 4.2 Nevada gaming revenue, selected statistics, 2007
[Win amounts are in thousands]
Games and tables:Win amount% ChangeWin percent
SOURCE: Adapted from “Statewide, All Nonrestricted Locations, TwelveMonth Summary-01/01/07 to 12/31/07,” in State of Nevada Gaming Revenue Report:Year Ended December 31,2007, Nevada State Gaming Control Board, 2008, http://gaming.nv.gov/documents/pdf/1g_07dec.pdf (accessed July 18, 2008)
Let It Ride63,8347.4622.36
Pai Gow Poker141,32910.0922.17
Race Book 194,256-2.3015.80
Sports Pool 2168,363-12.106.49
Other slot machines161,653-3.92
Total slot machines8,450,9081.756.13
Total gaming win12,849,1371.81
1 Race Pari-Mutuel93,854-3.1817.03
2Sports pool details
Sports Parlay Cards20,283-3.8129.56
$8.1 billion in 1998 to $12.8 billion in 2007 (see Table4.2), an increase of 58%.
Multidenomination slot machines made the most money of any game in Nevada's casinos in 2007 ($3.6 billion), followed by one-cent slot machines ($1.6 billion). The table game with the highest revenue was twenty-one, bringing in $1.4 billion, followed by baccarat ($908 million).
Even though casinos are located throughout the state, the major gambling markets in Nevada are in the southern part of the state in Clark County (which encompasses Las Vegas and Laughlin) and along the California border in Washoe County (which encompasses Reno) and the Lake Tahoe resort area.
Perhaps no other city is more associated with casinos than Las Vegas. According to the LVCVA, in “Stats & Facts: Visitor Statistics” (2008, http://www.lvcva.com/getfile/ES-YTD2007%20Final.pdf?fileID=350), the city had 39.2 million visitors in 2007, up 0.7% from 2006. The city's hotel and motel rooms had an occupancy rate of90.4%. In Las Vegas Visitor Profile, Calendar Year 2007 (December 2007, http://www.lvcva.com/getfile/VPS-2007%20Las%20Vegas.pdf?fileID=107), the LVCVA indicates that most visitors were married (79%) and had a household income of at least $40,000 (79%). The average age of visitors was forty-nine, and 26% of visitors were retired. Visitors stayed an average of 3.5 nights in the city. The LVCVA indicates in “Stats & Facts: Visitor Statistics” that in 2007, 23,847 conventions were held in Las Vegas, attracting 6.2 million attendees with an estimated economicimpactof $8.4 billion.
In Las Vegas Visitor Profile, Calendar Year 2007, the LVCVA notes that in 2007, 19% of visitors to Las Vegas were first-time visitors. Eleven percent of visitors stated that their primary purpose in visiting the city was to gamble, up significantly from 2004, when only 4% stated gambling was their primary purpose. However, 84% of all visitors to Las Vegas gambled during their visit, spending an average of 3.4 hours per day gambling, with an average gambling budget of $555.64.
The casinos on the 4-mile (6.4-km) stretch of Las Vegas Boulevard known as the Strip made up the top commercial casino market in the country in 2007. (See Table 4.3.) Nearly forty hotel-casinos line the Strip, a
TABLE 4.3 Top 20 casino markets, 2007
SOURCE: “Top 20 U.S. Casino Markets, 2007,” in 2008 State of the States: The AGA Survey of Casino Entertainment, American Gaming Association, 2008, http://www.americangaming.org/assets/files/aga_2008_sos.pdf (accessed August 1, 2008). Data from The Innovation Group. Reprinted with permission of the American Gaming Association. All rights reserved.
1Las Vegas Strip, Nev.$6.750 billion
2Atlantic City, N.J.$4.921 billion
3Chicagoland, lll./lncl.$2.602 billion
5Detroit, Mich.$1.335 billion
6Tunica/Lula, Miss.$1.243 billion
7Biloxi, Miss.$1.007 billion
8St. Louis, Mo./Ill.$999.37 million
9Boulder Strip, Nev.$927.70 million
10Reno/Sparks, Nev.$927.60 million
11Shreveport, La.$844.13 million
12Lawrenceburg/Rising Sun/ Belterra, Incl.$791.10 million
13Kansas City, Mo. (includes St. Joseph)$758.18 million
14New Orleans, La.$703.59 million
15Lake Charles, La.$640.63 million
16Downtown Las Vegas, Nev.$632.93 million
17Laughlin, Nev.$630.92 million
18Black Hawk, Co.$581.39 million
19Council Bluffs, Iowa$470.86 million
20Charles Town, W.Va.$463.37 million
number of which are among the largest hotels in the United States. These lavishly decorated megaresorts offer amenities such as spas, pools, top-quality restaurants, and top-notch entertainment. The companies operating these establishments generate a substantial amount of their revenue from nongambling sources, including lodging, dining, and entertainment.
Besides those on the Strip, casinos are located throughout Las Vegas and in other parts of Clark County, including Mesquite, Primm, and Laughlin. The Nevada State Gaming Control Board reports in State of Nevada Gaming Revenue Report: Year Ended December 31, 2007 (2008, http://gaming.nv.gov/documents/pdf/1g_07dec.pdf) that in total, the 182 casinos in Clark County, both on the Strip and off, had gaming revenue of $10.9 billion during 2007. This amounted to 85% of the state's total casino gambling revenues for that year.
Atlantic City was an immensely popular resort destination throughout the late 1800s and early 1900s. It was easily accessible by rail, and people visited the beautiful beaches and elegant hotels along the boardwalk, which stretches nearly 5 miles (8 km). During the 1960s the city lost most of its tourist trade to beaches farther south, mainly in Florida and the Caribbean, and the city fell into an economic slump. Casinos were seen as a way to revitalize the city and attract tourists again. The first casino, Resorts International, opened in 1978, followed by Caesars Atlantic and Bally's Park Place in 1979. By 1991 casino gambling was permitted twenty-four hours per day.
The city's eleven casinos had gross revenue of $4.9 billion in 2007, down from $5.2 billion in 2006, a 6% decrease. (See Table 4.4.) The New Jersey Casino Control Commission theorized that revenues were down for the first time in the history of casino gambling in Atlantic City due to a confluence of factors. Slot machines were introduced at racetracks in New York and Pennsylvania, a partial ban on smoking was imposed on the casino floor, and a downturn in the overall U.S. economy left consumers with less money for travel and gambling.
All Atlantic City casinos are land based. According to the New Jersey Casino Control Commission, in New Jersey Casino Control Commission 2007 Annual Report (2008, http://www.state.nj.us/casinos/about/commrepo/docs/2007/2007_annual_report.pdf), as of December 31, 2007, they offered 1,600 table games, 16 keno windows, and 35,615 slot machines. Atlantic City casinos employed 40,788 people in 2007 and paid wages of $1.1 billion. They paid another $394 million in taxes.
Atlantic City differs from Las Vegas in many ways. There are far fewer hotel rooms (only 14,575) with fewer amenities. Atlantic City is considered a “day-tripper market,” attracting people within driving or train distance who visit for the day (many of them from New York City and Philadelphia). Casino development was sluggish in Atlantic City during the 1990s; no new casinos were built. However, in July 2003 the Boyd Gaming Corp. and MGM Mirage collaborated to open Borgata, the city's newest casino and hotel, and approximately twenty-five hundred new hotel rooms were scheduled to open due to hotel expansions in 2008, and a new casino hotel owned by Revel Entertainment was scheduled to open in 2010.
In Atlantic City each casino is assessed an 8% tax on its gross revenue (i.e., casino revenue after all winners are paid but before other expenses are paid). The tax payments go into a fund that is distributed among various state programs. The New Jersey Casino Control Commission states that in fiscal year (FY) 2007, $410 million from the gross revenue tax was dispersed to funds such as the Department of Health and Senior Services, the Department of Human Services, the Department of Transportation, the Department of Labor and Workforce Development, and the Department of Law and Public Safety. Most of these taxes funded programs to benefit senior citizens and disabled people living in the state.
The casinos of Atlantic City have not changed the town into a trendy tourist destination as was originally hoped. In fact, Atlantic City has the reputation of being a slum with casinos. Industry experts point to two primary factors for this perception: the town relies on day-trippers rather than on long-term vacationers, and casino tax revenues have largely funded physical and mental health programs throughout the state rather than being invested in local infrastructure and economic development.
In 1989 Mississippi became the first state to permit gambling on cruise ships that were in state waters on their way to or from international waters, but gambling in Mississippi had a long history. Gambling along the Mississippi River and its connecting waterways was widespread during the early 1800s. The rivers were the equivalent of the modern-day interstate highway system, carrying cash-laden farmers, merchants, and tourists to bustling towns along the riverbank. Gambling halls became notorious establishments that attracted professional gamblers, especially cardsharps, who employed various methods of cheating to earn a living at cards.
TABLE 4.4 New Jersey casino revenue, selected statistics, 2006 and 2007
[$ in thousands]
Casino hotelCasino winDaily average casino winAdjustmentsGross revenueTaxMarket share of casino win
*Sands ceased operations on November 10, 2006. Daily average win adjusted for closing date.
SOURCE: “The New Jersey Casino Industry Gross Revenue Statistics for the Years Ended December 31, 2007 and 2006,” in 2007 Annual Report, State of New Jersey Casino Control Commission, 2008, http://www.state.nj.us/casinos/about/commrepo/docs/2007/2007_annual_report.pdf (accessed August 1, 2008)
2007$ 304,898$ 835$ —$ 304,898$ 24,3926.2%
2006$ 330,083$ 904—$ 330,083$ 26,4076.3%
Bally's Atlantic City
Trump Taj Mahal
By the 1830s the cardsharps had worn out their welcome. According to Richard Dunstan, in Gambling in California (1997), five cardsharps were lynched in Mississippi in 1835, and the professional gamblers moved to the riverboats cruising up and down the rivers. Gambling was a popular pastime for riverboat passengers during the 1840s and 1850s. The onset of the Civil War (1861–1865) and then the antigambling movement around the turn of the twentieth century dampened, but did not destroy, open gambling in the state.
During and after World War II (1939–1945), the Mississippi coast experienced a resurgence in illegal casino gambling, particularly in Harrison County, which is where the Keesler Air Force Base is located. The officers' club at the base reportedly operated slot machines. During the 1960s the Alcohol Beverage Control Board began refusing licenses to public facilities that allowed gambling. A few private clubs and lodges continued to offer card games and slot machines, but they were shut down by the mid-1980s.
In 1987 the ship Europa Star and several other ships from Biloxi ports began taking gamblers on “cruises to nowhere”—cruises to international waters in the Gulf of Mexico, where passengers could gamble legally. Even though the cruises were supported by the city of Biloxi, the state initially opposed them until it became apparent that they were reviving tourism in port towns. The state was in desperate economic times—the 1980 census revealed it was the poorest state in the country.
The Mississippi legislature legalized casino gambling in 1990, although each county was allowed to decide whether it would permit gambling within its borders. Fourteen counties along the Gulf Coast and the Mississippi River held referenda to allow dockside casinos, and
all voted them down. The next year a city-by-city vote was held, and voters in Biloxi, which was nearly bankrupt at the time, approved the referendum. In 1992 nine dockside casinos opened in Biloxi.
Casinos are grouped in three parts of the state: the northern region centered in Tunica; the central region based in Vicksburg and Natchez; and the coastal region centered in Biloxi, Gulfport, and Bay St. Louis. Tunica was the sixth-largest casino market and Biloxi the seventh-largest in 2007. (See Table 4.3.)
Mississippi has set no limit on the number of casinos that can be built in the state. Instead, it allows competition to determine the market size. Before Hurricane Katrina hit the state in August 2005 and devastated the area around Biloxi, casinos were required to be permanently docked in the water along the Mississippi River and the Mississippi Gulf Coast. The gambling halls of the casinos actually sat on the water, while their associated lodging, dining, and entertainment facilities were on land. After the hurricane partially or completely destroyed all twelve casinos along the Gulf Coast, the legislature passed a law allowing casino operators who had establishments on the coast in Biloxi, Gulfport, and Bay St. Louis to relocate their casinos 800 feet (244 m) inland so they would be safe from any future storm surges. Along the Mississippi River, the gambling halls sit in slips cut into the riverbank. The Mississippi Band of Choctaw Indians operates the only land-based casinos, which are located in Neshoba County.
As of March 2006, there were twenty-nine commercial casinos licensed to operate in Mississippi. (See Table 4.5.) In total, they employed 26,388 people and offered nearly 1.4 million square feet (130,000 sq m) of gaming space, 34,485 slot machines, 934 table games, and 153 poker games. Table games offered included blackjack, craps, roulette, baccarat, and keno. The state allows round-the-clock gambling with no bet limits.
Gross casino revenue for the state was $2.9 billion in 2007, the first year when revenues exceeded pre–Hurricane Katrina revenues. (See Figure 4.3.) The newest property to open was the Hard Rock Casino and Hotel, which opened in July 2007.
According to the Mississippi Gaming Commission, in “Mississippi Tax Revenues from Gaming” (September 8, 2008, http://www.mstc.state.ms.us/taxareas/misc/gaming/stats/gamtax.pdf), the casino industry produces a substantial percentage of the state's annual budget. For FY 2008 (July 2007–June 2008), casinos paid $344.6 million in taxes. Approximately $194 million (56%) was paid into the state's general fund, $114.5 million (33%) went to local governments, and the remainder went to retire debt. In total, $4.3 billion had been collected in casino taxes in Mississippi between July 1992 and June 2008.
Like Mississippi, Louisiana has a long gambling history. In 1823, eleven years after Louisiana became a state, its legislature legalized several forms of gambling and licensed six “temples of chance” in the city of New Orleans. Each was to pay $5,000 per year to fund the Charity Hospital and the College of Orleans. The casinos attracted many patrons, including professional gamblers, swindlers, and thieves. In 1835 the legislature repealed the licensing act and passed laws making gambling hall owners subject to prison terms or large fines.
However, casino-type gambling continued and even prospered throughout the southern part of the state. By 1840 New Orleans had an estimated five hundred gambling halls that employed more than four thousand people but paid no revenue to the city. Riverboat casinos frequented by hundreds of professional gamblers plied the Mississippi River between New Orleans and St. Louis. When the Civil War broke out, the riverboats were pressed into military service. In 1869 the legislature legalized casino gambling once again, requiring each casino to again pay the state a tax of $5,000.
In Bad Bet on the Bayou: The Rise of Gambling in Louisiana and the Fall of Governor Edwin Edwards (2001), Tyler Bridges credits Louisiana gamblers for popularizing craps and poker in the United States during the nineteenth century. Both were games of chance that had originated in Europe. The Louisiana state lottery began in 1868 but was outlawed in 1892, along with other forms of gambling, after massive fraud was uncovered. Casino gambling went underground and continued to flourish well into the 1960s, thanks to mobsters and political corruption. Two of the state's governors, Earl Kemp Long (1895–1960) and Edwin Edwards (1927–), were well-known gamblers. Edwards reportedly hosted high-stakes gambling games at the governor's mansion; he also went to prison in 2001 for extorting money from people who sought riverboat casino licenses.
During the early 1990s the state legalized gambling again, authorizing a lottery, casinos, and the operation of video poker machines in restaurants, bars, and truck stops. In 1991 the legislature authorized operation of up to fifteen riverboat casinos in the state; all but those along the Red River were required to make regularly scheduled cruises. The riverboat casinos were required to be at least 150 feet (46 m) long and decorated to look like nineteenth-century paddleboats. The first riverboat casino, the Showboat Star, began operating in 1993.
New Orleans received special permission from the legislature in 1993 to allow a limited number of land-based casinos. In January 1995 Harrah's began construction of one in the heart of the city. By November 1995 the casino had declared bankruptcy. Following years of negotiations with the state and the city, it reopened in
TABLE 4.5 Mississippi casino statistics, January-March 2008
SOURCE: “Mississippi Gaming Commission-Public Information: Quarterly Survey Information: January 1, 2008-March 31, 2008,” in Quarterly Reports -1st Quarter 2008: Property Data, Mississippi Gaming Commission, 2008, http://www.mgc.state.ms.us/ (accessed July 18, 2008)
Coastal regionNumber of employeesHotel employeesGaming sq. footageOthersq. footageTotal sq. footage# Slot games# Table games# Poker gamesActivities in addition to gaming
Beau Rivage - Biloxi2,86372676,7152,150,0002,226,7152,04893168 Restaurants, retail promenade, convention center, showroom, spa, and hotel.
Boomtown - Biloxi637N/A51,66515,43567,1001,219227Buffet, restaurant and fun center.
Grand Casino - Biloxi9568926,480453,520480,00084835-Golf course, hotel, buffet, LB's, Starbucks, lobby bar, pool/spa, Asian cafe, Lucky Dog.
Hard Rock Casino- Biloxi1,03312653,800126,200180,0001,334506Restaurants, gift shops, boutique, entertainment showroom, lounges.
Hollywood Casino- BSL7155740,000146,000186,0001,116216Restaurants, golf course, RV park, convention center, and hotel.
Imperial Palace - Biloxi2,28629067,580126,564194,1442,0386116Restaurants, hotel, showroom, banquet facilities, retail shop, pool/spa.
Island View Casino - Gulfport1,19216282,93598,197181,1322,06447-Restaurants, buffet, room service, and gift shop.
Isle of Capri - Biloxi6819857,252618,700675,9521,329319Lava Bar, buffet, Tradewinds Market Place, and restaurant.
New Palace Casino - Bilox5508326,2609,50035,76081414-Restaurants, hotel, swimming pool, and bars.
Silver Slipper- Lakeshore647-36,82663,174100,000996275Live entertainment, restaurants, Bon Marche, gen. store, and fishing.
Treasure Bay- Biloxi8961824,55771525,27280722-
North River region
Bally's - Robinsonville5994646,535153,543200,0781,26822-Restaurants, entertainment.
Fitzgerald's - Robinsonville93316138,088522,912561,0001,30336-Hotel and restaurants.
Gold Strike - Robinsonville1,60824950,4861,347,5971,398,0831,3975816Restaurants, Millenium Theater, arcade, and hotel.
Grand Casino -Tunica2,088506136,000204,000340,0001,6026614Restaurants, RV park, arcade, golf course, Kid's Quest, events center, and clay shooting.
Hollywood - Robinsonville7947154,000337,613391,6131,289316Live entertainment, restaurants, RV park, indoor pool, and golf.
Horseshoe - Robinsonville1,9789963,000222,500285,5001,7417416Restaurants, blues museum, entertainment facility, and health club.
Isle of Capri - Lula5614763,50065,000128,5001,30415-Live entertainment, restaurants, health club, and blues museum.
Resorts - Robinsonville6516535,000151,924186,9241,11618-Hotel and dining.
Sam's Town - Tunica93611566,00030,00096,0001,3383821Hotel, gift shop, and restaurants.
Sheraton - Robinsonville7375532,800121,000153,8001,05029-Restaurants and hotel.
South River region
Ameristar- Vicksburg8176844,530211,151255,6811,38136-F&B, entertainment, gift shop, convenience store, RV park, and Subway.
Diamond Jacks Casino Vkb4923232,00030,90062,90081420-Restaurants, retail and lodging.
Harlow's Casino Resort4327733,00050,00083,000837157Hotel, two restaurants, entertainment arena.
Horizon Casino -Vicksburg23611720,90915,09136,000695118Live entertainment, restaurants, and hotel.
Jubilee - Greenville2862717,6346,41324,04762611-Live entertainment & restaurants.
Isle of Capri - Natchez222928,50036,93765,43763312-Live entertainment, hotel, & restaurants.
Lighthouse - Greenville224-22,000-22,0006489-Restaurants & live entertainment.
Rainbow-Vicksburg3381825,0005,00030,00083010-Restaurants, gift shop, and hotel.
1999 but threatened bankruptcy again in 2001, blaming the state's $100 million minimum tax. The legislature cut the tax to $50 million for 2001 and $60 million for subsequent years to help keep the casino in business.
On April 1, 2001, the legislature ended the so-called phantom cruises of the riverboat casinos, ruling that it would actually be illegal for them to leave the docks. All riverboats were allowed to begin dockside gambling. However, their tax rate was increased from 18.5% to 21.5%.
According to the Louisiana Gaming Control Board, in Report to the Louisiana State Legislature, 2007–2008 (2008, https://web01.dps.louisiana.gov/lgcb.nsf/8d7ba772b 324df7186256eb4006fc77e/9e7b358f689ff3218625742f00644768/$FILE/2007-2008%20Annual%20Report.pdf,
the state's riverboat casinos admitted nearly 25.5 million people during the fiscal year that ran from July 1, 2006, to June 30, 2007. (See Table 4.6.) The attendance figure, down from twenty-eight million in FY 2005, was likely lower because Hurricanes Katrina and Rita severely damaged two riverboat casinos on Lake Charles (Harrah's Pride and Harrah's Star ) and one on Lake Pontchartrain (Bally's ). The total adjusted gross revenue for the river-boats in FY 2007 was nearly $1.8 billion.
Harrah's, Louisiana's one land-based casino in New Orleans, reopened in February 2006 after having been closed by Hurricane Katrina nearly six months previously. The Louisiana Gaming Control Board notes that in FY 2005, 6.8 million people gambled at the casino; in FY 2006 only 2.7 million people gambled at the casino. Revenues were just $198 million in FY 2006, but were up to $399 million in FY 2007. The state's three racinos (racetracks at which slot machines are available), which were not damaged by the hurricanes, grossed nearly $366 million in slot machine revenue during FY 2007, up from $350 million the year before.
The Louisiana Gaming Control Board explains that the total gross casino revenue in Louisiana for FY 2007 was $2.4 billion, holding steady with FY 2005. Revenues in 2007 were double that from FY 1998, when casinos started operating in Louisiana. (See Figure 4.4.) The state took in approximately $443,710 in taxes from the casinos and racinos during FY 2007, down from $507.5 million a year earlier.
TABLE 4.6 Louisiana riverboat gaming activity, fiscal year 2006-07
LicenseeD/B/A and locationDate of commencementAdmissionsTotal AGRFee remittance
aRelocated to St. Mary Parish from its original berth site on Lake Pontchartrain in Orleans Parish.
bFormerly Harrah's Lake Charles, L.L.C. acquired by Pinnacle Entertainment, Inc.; currently in construction stage with anticipated opening in Fall, 2009.
cFormerly Harrah's Star Partnership acquired by Pinnacle Entertainment, Inc.; currently in development stage with anticipated opening in Summer, 2010.
SOURCE: “Louisiana State Police Riverboat Gaming Activity Summary, Fiscal Year 2006-2007,” in Report to the Louisiana State Legislature, 2007-2008, Louisiana Gaming Control Board, 2008, https://web01.dps.louisiana.gov/lgcb.nsf/8d7ba772b324df7186256eb4006fc77e/9e7b358f689ff3218625742f00644768/$FILE/2007-2008%20Annual%20Report.pdf (accessed July 21, 2008)
Catfish Queen Partnership in CommendamBelle of B.R.-Baton Rouge09/30/941,202,882103,250,79222,198,920
Belle of Orleans, L.L.C.aAmelia Belle-Amelia07/07/95109,8667,501,0221,612,720
Grand Palais Riverboat, Inc.Isle of Capri-Westlake07/12/962,036,489138,900,79029,863,670
PNK (SCB) PartnershipbSugar Cane Bay-Lake Charles12/08/93000
Eldorado Casino Shreveport Joint VentureEldorado Casino Resort-Shreveport12/20/003,287,248144,265,21631,017,021
Horseshoe Entertainment, L.L.P.Horseshoe-Bossier City07/09/942,669,843282,847,98760,812,317
Louisiana Casino Cruises, Inc.Hollywood-Baton Rouge12/28/941,433,492139,861,59330,070,242
Louisiana Riverboat Gaming PartnershipDiamond Jacks-Bossier City05/20/941,953,16898,889,25621,261,190
PNK (Bossier City), Inc.Boomtown-Bossier City10/04/961,732,56397,455,53720,952,940
PNK (Harvey), L.P.Boomtown Casino-Harvey08/06/942,370,420178,032,34438,276,954
PNK (Lake Charles), L.L.C.L'Auberge Du Lac-Lake Charles05/23/054,736,290308,847,22066,402,152
Red River Entertainment of Shreveport
Partnership in CommendamSam's Town-Shreveport05/20/042,014,043128,995,04227,733,934
St. Charles Gaming Company, Inc.Isle of Capri-Westlake07/29/95774,20432,397,9046,965,549
Treasure Chest Casino, L.L.C.Treasure Chest-Kenner09/05/941,164,737120,720,24125,954,852
The state has four major casino markets: Shreveport– Bossier City, New Orleans, Lake Charles, and Baton Rouge. The Shreveport market was the eleventh-largest casino market in the United States in 2007. (See Table 4.3.) A wide variety of games are allowed at Louisiana casinos, including blackjack, poker, craps, roulette, baccarat, keno, bingo, and slot machines. In “Louisiana State Police Video Gaming Division Revenue Report” (August 2008, https://web01.dps.louisiana.gov/lgcb.nsf/d8805955b3ee279586256e9b0049dc26/dbdfe1ea6d07e2f6862574ce0052a38e/$FILE/AUGUST%202008%20REVENUES.Video%20Poker.pdf), the Louisiana Gaming Control Board indicates that the state also had 14,377 slot machines in truck stops, bars, restaurants, and other noncasino locations as of August 2008. The machines generated $53.4 million in revenue that month.
In 1993 the state of Indiana legalized gambling on up to eleven riverboats in specific areas of the state—in the northwestern corner along Lake Michigan; at the southern border along the Ohio River; and around Patoka Lake in the southern part of the state. The Patoka Lake site initially received a riverboat license, but it was later vetoed by the U.S. Army Corps of Engineers.
The first riverboat began operation in December 1995 in Evansville. By December 1996 six riverboats were operating. In 2002 new legislation permitted dockside operation of the riverboats in counties that would accept it. Permanent mooring allows patrons to access the casinos anytime during operating hours rather than just during cruise boarding times. The measure was intended to make Indiana casinos more competitive with those in Illinois.
The new law also changed the wagering tax structure from a 22.5% flat tax on adjusted gross receipts to a
TABLE 4.7 Indiana gaming taxes, selected statistics, fiscal year 2007
Fiscal year 2007WinWagering taxAdmission taxTotal tax
SOURCE: “FY 2007 Tax Overview,” i n 2007 Annual Report to Governor Mitch Daniels, Indiana Gaming Commission, 2007, http://www.in.gov/legislative/igareports/agency/reports/IGC04.pdf (accessed July 18, 2008)
Belterra$ 171,928,620$ 45,158,983$ 5,899,989$ 51,058,972
Blue Chip$ 267,254,458$ 85,188,799$ 9,853,938$ 95,042,737
Caesars$ 341,020,147$104,849,844$ 9,959,031$114,808,875
Casino Aztar$ 123,451,731$ 29,479,589$ 4,492,467$ 33,972,056
French Lick$ 110,920,428$ 13,493,576$ 4,020,488$ 17,514,064
Grand Victoria$ 149,924,858$ 37,446,789$ 5,393,811$ 42,840,600
Horseshoe$ 444,320,933$140,596,714$ 12,354,255$152,950,969
Majestic Star I$ 138,112,435$ 33,944,598$ 4,749,774$ 38,694,372
Majestic Star II$ 115,111,365$ 27,178,788$ 4,749,774$ 31,928,562
Resorts$ 321,254,597$ 97,354,462$10,431,951$107,786,413
graduated tax rate of 15% to 35%. A portion of the increased tax revenue is distributed to counties that do not have casinos. The admissions tax, which remained at $3 per person, is split among the state, county, and city: each gets $1 per person.
The Indiana Gaming Commission notes in 2007 Annual Report to Governor Mitch Daniels (2007, http://www.in.gov/legislative/igareports/agency/reports/IGC04.pdf) that in 2007 there were eleven riverboats operating in Indiana. Five of the casinos were along Lake Michigan in the far northern part of the state and six along the Ohio River in the far southern part. Together, the eleven river-boats had 18,600 slot machines and 681 table games. Games allowed included blackjack, craps, roulette, baccarat, and poker. Eight of the riverboats were docked at locations with associated land-based hotels, restaurants, and entertainment venues. The other three were docked at pavilions offering only dining and shopping. The casinos employed 15,672 people.
According to the Indiana Gaming Commission, the total riverboat admission in Indiana was 27.5 million people during FY 2007. The total win during FY 2007 was nearly $2.7 billion. (See Table 4.7.) In 2007 the combined northwestern Indiana/northeastern Illinois market was the third-largest casino market in the United States in terms of gross revenue, and the southeastern Indiana market was the twelfth largest. (See Table 4.3.) Admission and wagering taxes paid in FY 2007 totaled $851.5 million.
Illinois legalized riverboat gambling in 1990, the second state to do so. The Illinois Gaming Board was authorized to grant up to ten casino licenses, each of which would allow up to two vessels to be operated at a single specific dock site. Each dock site could have no more than twelve hundred gaming positions, and all
wagering was to be cashless. Originally, riverboats were required to cruise during gambling, but they were later allowed to operate dockside.
Nine Illinois riverboat casinos generated $2 billion in adjusted gross revenue in 2007, up from $1.9 billion in 2006. (See Figure 4.5.) According to the Illinois Gaming Board, in 2007 Annual Report (2008, http://www.igb.state.il.us/annualreport/2007igb.pdf), the vast majority ($1.7 billion, or 88.2%) of the 2007 revenue was from electronic gambling devices; the remainder was from table games. Admissions totaled 16.5 million in 2007, up from 16.2 million the year before.
Illinois levies an admissions tax and a wagering tax. In 2005 the admissions tax stood at $2 per person at Casino Rock Island and $3 per person for all other casinos. Wagering taxes start at 15% for casinos with adjusted gross revenue of less than or equal to $25 million and increase as revenue increases. Casino taxes are shared by the state and communities in which the casinos are located. The Illinois Gaming Board states that the casino industry paid $115.7 million in local taxes in FY 2007 (see Table 4.8) and $718.2 million in state taxes. The state received 86% of admissions and wagering taxes, and the cities and counties received 14%.
The legalization of riverboat gambling in Missouri started in 1992 with a referendum approved by 64% of the voters. That was followed by a court case, a constitutional amendment (that was defeated by voters), and wrangling over the definition of “games of skill.” Eventually, in 1994 the general assembly passed a bill that defined games of skill and authorized riverboats to be located in artificial basins. The first two licenses for riverboat casinos were issued later that year. However, because the casinos could not offer games of chance, such as slot machines, competition from riverboats in Illinois kept customers away, and the casinos were not profitable.
After a petition drive, voters passed an initiative that allowed “only upon the Mississippi River and the Missouri River, lotteries, gift enterprises, and games of chance to be conducted on excursion gambling boats and floating facilities.” The result was significant: revenues from casino riverboats during the first quarter of FY 1996 were more than twice what they had been during the first quarter of the previous year. Initially, the casinos were only allowed to hold two-hour gambling excursions. In 2000 the law was changed to allow continuous boarding. However, the original $500 loss limit per excursion that had been approved in 1992 still applies. Patrons are allowed to purchase only $500 worth of chips or tokens in any two-hour period, preventing them from losing more than that amount within the “excursion” period.
The Missouri Gaming Commission notes that in 2007 eleven riverboat casinos operated in six markets: St. Louis, Kansas City, Caruthersville, St. Joseph, LaGrange, and Boonville. All the riverboats remain dockside. Games allowed include blackjack, poker, and other card games, slot machines, craps, roulette, and several wheel games. Gaming revenue topped $1 billion for the first time during FY 2001 and reached $1.6 billion in FY 2007 (July 1, 2006, through June 30, 2007). (See Figure 4.6.)
TABLE 4.8 Local distribution of Illinois gaming taxes, 2003-07
20032004200520062007% change '07 to '06
SOURCE: “Distribution of Gaming Taxes: Distributions to Local Governments,” in 2007 Annual Report, Illinois Gaming Board, 2008, http://www.igb.state.il.us/annualreport/2007igb.pdf (accessed July 18, 2008)
East St. Louis9,926,61710,483,14510,545,44610,820,36311,738,2048.48%
Pari-mutuel horse racing (betting in which those who bet on the top competitors share the total amount bet and the house gets a percentage) was legalized in Michigan in 1933. During the 1970s the state lottery was legalized and a concerted effort began to allow casino gambling in Detroit. The casino efforts were unsuccessful until 1994, when the Windsor Casino opened just across the river in Windsor, Ontario. By that time, more than a dozen tribal casinos were operating around the state of Michigan, and Detroit was in an economic downturn. Attitudes toward casino gambling changed, and in November 1996 Michigan voters narrowly approved ballot Proposal E, which authorized the operation of up to three casinos in any city that had a population of 800,000 people or more and was located within 100 miles (161 km) of any other state or country in which gaming was permitted. Casino gaming also had to be approved by a majority of voters in the city. Proposal E was subsequently modified and signed into law in 1997. Out of eleven casino proposals submitted, three were accepted: Atwater/Circus Circus Casino (later called MotorCity Casino), owned by Detroit Entertainment; Greektown Casino, owned by the Sault Ste. Marie Tribe of Chippewa Indians; and the MGM Grand, owned by MGM Grand Detroit Casino. The casinos were granted permission to open at temporary locations, with permanent facilities planned for a proposed waterfront casino district.
The first casino, MGM Grand, opened in July 1999 in a former Internal Revenue Service building. Later that year the MotorCity Casino started operations in a former bread factory. The Greektown Casino opened in November 2000 in the heart of the city. It was the first tribally owned casino to open off a reservation. Detroit became the largest city in the country to allow casino gambling.
The plan for a downtown casino district was eventually abandoned because of rising real estate prices and local opposition, and the number of hotel rooms initially
proposed was cut back after marketing studies showed that many casino customers were regional and did not need overnight lodging. The permanent casinos were also delayed by several lawsuits. However, work began on the permanent MGM Grand Detroit Casino and MotorCity Casino in the summer of 2006. The MGM Grand Detroit opened in October 2007. The MotorCity Casino opened in stages throughout 2007, with a grand opening in June. Greektown Casino filed for bankruptcy protection in May 2008. However, it opened an expanded casino in August 2008 and was expected to open its hotel in 2009.
In Annual Report to the Governor: Calendar Year 2007 (April 15, 2008, http://www.michigan.gov/documents/mgcb/annrerp07_231975_7.pdf), the Michigan Gaming and Control Board states that the Detroit casinos together grossed more than $1.3 billion in 2007. (See Figure 4.7.) Each casino paid 8.1% of adjusted gross receipts as a state wagering tax to be deposited in Michigan's School Aid Fund. MotorCity and Greektown paid an additional 4%; 3.5% went into the state's general fund and 0.5% went to the Michigan Agriculture Equine Industry Development Fund. MGM was no longer required to pay the additional 4% because it had opened in its permanent location. The combined 8.1% State Wagering Taxes deposited in the School Aid Fund totaled $108.1 million in 2007. An additional $41.5 million was deposited in the General Fund and $5.9 million was deposited in the Agricultural Equine Industry Development Fund.
Unlike casinos in some other states, Detroit's casinos are not permitted under the Michigan Liquor Control Code to provide free alcoholic drinks. Games offered at Detroit casinos include baccarat, blackjack, casino war, craps, keno, poker, roulette, slot machines, and video poker.
Gambling was outlawed in the state of Iowa from the time of its statehood in 1846 until 1972, when a provision in the state constitution that prohibited lotteries was repealed. In 1973 the general assembly authorized bingo
and raffles by specific parties. A decade later pari-mutuel wagering at dog and horse tracks was legalized, followed by a state lottery in 1985. In 1989 gambling aboard excursion boats was authorized for counties in which voters approved gambling referenda. Between 1989 and 1995 referenda authorizing riverboat gambling were approved in more than a dozen counties. The Iowa Racing and Gaming Commission granted licenses for river-boat gambling in ten counties: Clarke, Clayton, Clinton, Des Moines, Dubuque, Lee, Polk, Pottawattamie, Scott, and Woodbury. By law, the residents of these counties vote every eight years on a referendum to allow riverboat gambling to continue. In 1994 pari-mutuel racetracks gained approval to operate slot machines.
In FY 2007 ten riverboat casinos and three racetrack casinos operated in Iowa. Games included bingo, blackjack, craps, keno, minibaccarat, poker, roulette, slots, and video poker. In 2007 Annual Report (March 1, 2008, http://www.iowa.gov/irgc/Annual%20Report%202007.pdf), the Iowa Racing and Gaming Commission indicates that in 2007 admissions to riverboats totaled 16.4 million and to racinos totaled 6.9 million. The riverboats are required by law to meet space requirements for non-gamblers and to provide shopping and tourism options. Slots are allowed at racetracks only if a specific number of live races are held during each racing season.
During FY 2007 Iowa casino revenues totaled $860.1 million, and racino revenues totaled $459.9 million. (See Figure 4.8.) In other words, nearly two-thirds (65%) of gambling revenue in Iowa was collected on riverboat casinos. The Iowa Racing and Gaming Commission notes in Iowa Racing and Gaming Commission: Gaming Revenue by FY (2007, http://www.state.ia.us/irgc/FYTD07.pdf) that $278.2 million in gaming taxes were collected by cities, counties, and the state in 2007. Iowa's gaming tax rate ranges from 5% to 24%, depending on revenue and the type of venue. In 2007 racinos paid $2.3 million in city taxes, $2.3 million in county taxes, and $98.4 million in state taxes, as well as contributions to the gamblers' treatment and endowment funds and regulatory and daily licensing fees. Riverboat casinos paid $4.3 million in city taxes, $4.3 million in county taxes, and $166.6 million in state taxes, as well as contributions to the gamblers' treatment and endowment funds and regulatory and daily licensing fees.
During the 1800s gambling halls and saloons with card games were prevalent throughout the mining towns of Colorado. However, gambling was outlawed in the state around the turn of the twentieth century.
In November 1990 Colorado voters approved a constitutional amendment permitting limited-stakes gaming in the towns of Black Hawk and Central City, near Denver, and Cripple Creek, near Colorado Springs. The first Colorado casinos opened in October 1991 and had gross revenues of nearly $8.4 million during their first month of operation.
According to the Colorado Gaming Commission, in 2007 Annual Report (2008, http://www.revenue.state.co.us/Gaming/Documents/2007annual.pdf), only blackjack, poker, and slot machines are permitted in Colorado's casinos. The maximum single bet is $5. Any increase in betting limits, additional types of games, or new gambling locations require a statewide vote authorizing a change in the constitutional amendment. Since 1992 there have been seven votes on whether to expand casino gaming to additional locations; each time expansion has been defeated by at least a two-to-one margin.
The Colorado Gaming Commission states that forty-one casinos operated in the state in December 2007. They had gross revenues of $816 million during FY 2007. (See Figure 4.9.) Annual revenue grew steadily from 1997
through 2007, leveling off for a brief period between 2002 and 2004. In Gaming in Colorado: Fact Book and 2007 Abstract (2008, http://www.revenue.state.co.us/Gaming/Documents/Fact07.pdf), the Colorado Gaming Commission notes that the Black Hawk casinos have historically been the most successful in the state, accounting for 70% to 75% of casino gaming revenue each year, followed by the Cripple Creek market (20% to 25% of the total) and Central City (5% to 10%). In 2007 Black Hawk casinos took in 71% of casino revenues, and Cripple Creek took in 19%.
From 2002 through 2007 Colorado's casinos had an adjusted gross revenue of $4.5 billion and paid $618.2 million in gaming taxes. The tax money was used to fund historical restoration projects and to offset the costs of casino gaming to state and local governments (including regulatory costs associated with the casino industry).
The gaming tax rate, which is set by the gaming commission annually, is based on each casino's adjusted gross proceeds (the amount of money wagered minus the amount paid out in prizes). In 2007 the tax ranged from 0.25% for casinos with less than $2 million in adjusted gross proceeds to 20% for establishments with adjusted gross proceeds of more than $15 million.
In addition, the casinos pay annual device fees: $75 per slot machine and game table to the state and $750 to $1,265 to local jurisdictions. In Gaming Update (October 2008, http://www.revenue.state.co.us/Gaming/Documents/GU1008.pdf), the Colorado Gaming Commission reports that in August 2008 there were 17,029 slot machines and 229 table games operating in the state.
Commercial casino gambling in South Dakota is restricted to the town of Deadwood in Lawrence County. A rustic mountain town about 60 miles (97 km) from Mount Rushmore, Deadwood was designated a National Historic Landmark and is listed on both the National and South Dakota Registers of Historic Places. It had 139 casinos in June 2007, more than 80 of them historic. The games allowed are blackjack, poker, and slot machines.
The rocky history of gambling in Deadwood is described by Katherine Jensen and Audie Blevins in The Last Gamble: Betting on the Future in Four Rocky Mountain Mining Towns (1998). The gold rush of 1876 brought large numbers of people into the town, and it soon became packed with saloons and gambling halls. The town became associated with notorious characters such as Wild Bill Hickok (1837–1876), Poker Alice (1851–1930), and Calamity Jane (1852–1903).
Even though gambling was outlawed in the Dakota Territory in 1881, it continued quite openly in Deadwood with the apparent complicity of the local sheriff. According
to Jensen and Blevins, gambling opponents complained in 1907 that the town's gambling halls “operated as openly as grocery stores, running twenty-four hours a day.” On a busy Saturday night in 1947, South Dakota's attorney general sent sixteen raiders into the bars of Deadwood to show the town that the state meant business. The blatant days of gambling were over in Deadwood, although locals say the establishments continued to operate quietly for the next four decades.
In 1984 a group of Deadwood businessmen and community leaders began working to bring legalized gambling back to Deadwood, primarily to raise money to preserve the town's historic buildings. The group developed the slogan “Deadwood You Bet” and had it printed on hundreds of buttons. Despite widespread local support, the idea failed at the ballot box in 1984 and was voted down by the legislature in 1988. The measure made it onto the ballot in November 1988 following a massive petition effort. In 1989 South Dakota voters approved limited-stakes casino gambling for Deadwood. Originally, the casinos could only offer a $5 maximum bet. This limit was raised to $100 in 2000.
In Annual Report, Fiscal Year 2007 (2007, http://www.state.sd.us/drr2/reg/gaming/annual_report/fy07_annual_report.pdf), the South Dakota Commission on Gaming indicates that Deadwood's casinos had a total combined gross revenue of $94.4 million in FY 2007, an 11% increase from the previous fiscal year. (See Figure 4.10.) From FY 1990 through June 2007 gross revenue totaled $966 million. The casinos pay an 8% gaming tax on their adjusted gross revenue and an annual fee of $2,000 per card game or slot machine. In FY 2007, $7.4 million in taxes on gross revenues were collected, raising the total taxes on gross revenues collected between FY 1990 and FY 2007 to $74.7 million. Besides these taxes, device taxes, city taxes, and application, license, and device testing fees were also collected.
1. Small country-house, lightly fortified.
2. Pleasure-pavilion, sum-mer-house, villa, etc., in the grounds of a large country-house.
3. Place of recreation, public or semi-private, with facilities for various activities (e.g. concerts or dances).
4. Building or part of a building where gambling takes place.
5. Dwelling appearing to be one storey high, but not necessarily so.
W. Papworth (1852);
Sturgis et al. (1901–2);
ca·si·no / kəˈsēnō/ • n. (pl. -nos) a public room or building where gambling games are played.