AGA: Internet Gaming Won't Severely Erode B&M Gaming Revenue
According to Frank Fahrenkopf, CEO and President of the American Gaming Association(AGA), legalizing and expanding internet gaming will not severely erode revenue from land-based casinos. Some in the industry have speculated that legalizing internet games like poker could hurt casino attendance and, consequently, revenue. However, organizations like the AGA and Poker Players Alliance (PPA) have seemingly dispelled this notion.
Fahrenkopf was quoted in the Las Vegas Sunfollowing the release of the AGA’s annual State of the States report as arguing, “Because we’re talking about internet poker at this time, I could see how offering it online might hurt a small casino that’s dependent on poker. But what we’ve spent significant time on is the impact of the internet on existing operations and our research concludes that it wouldn’t result in a significant change.”
If anything, according to the Sun, Fahrenkopf indicated that “the approval of internet gambling would expand existing operations because younger players more comfortable with online transactions would start gambling online and eventually find their way to local casinos.”
Echoing Fahrenkopf’s sentiments was PPA Executive DirectorJohn Pappas, who told PocketFives in an exclusive statement, “We’ve long believed that competitive fears over internet poker were misplaced and we are pleased the AGA agrees. Internet poker is complementary, not competitive, to brick-and-mortar operations. Anyone who has followed the growth of industry for the past decade has seen that a rising internet tide lifts all poker boats.”
If you’ve never heard of the AGA, its website describes the Washington, D.C.-based organization’s purpose: “Since 1995, the American Gaming Association has been the leading voice of the commercial casino industry, serving as an advocate for its members and their employees.” Fahrenkopf has been a witness in key Congressional hearings about gaming.
The AGA counts among its membership the goliaths of the land-based gaming world, including Caesars Entertainment, Ameristar Casinos, MGM Resorts International, Boyd Gaming, and the Las Vegas Sands Corporation. It also represents various financial services, professional services, suppliers, vendors, associations, publications, and unions ancillary to the industry.
According to the latest AGA State of the States report, land-based casinos have ample incentive to pay attention to what goes on in the internet realm: “In 2011, commercial casino revenues reached $35.64 billion, which was an increase of 3.0 percent compared with 2010 figures. Commercial casinos returned $7.93 billion of those revenues to states and localities in the form of direct gaming taxes – a 4.5 percent increase over 2010 totals.” The bottom line: there’s plenty of money at stake.
Brick-and-mortar casinos employed nearly 340,000 people in 2011 and paid out nearly $13 billion in wages (an average of nearly $40,000 per year). Gaming revenues have grown over $1 billion in the last two years and 15 states the AGA reported on saw their land-based gaming revenues tick up in 2011 compared to 2010.
The State of the States report indicated that casinos are, by and large, accepted in their communities: “More than half of the community leaders surveyed say casinos have done a good job of providing quality jobs (53 percent) and contributing to local economic activity (52 percent). Seven out of 10 (70 percent) leaders think that casinos do a good job contributing tax revenue and nearly three out of five (58 percent) agree that casinos do a good job generating area tourism.”
Over one-quarter of the U.S. adult population visited a brick-and-mortar casino last year and slightly more women than men were among those who patronized gaming establishments. Over half of pollsters the AGA spoke to said their favorite casino games were slot machines and video poker. Only seven percent said live poker.
The State of the States report wrapped up with a spotlight on sports betting, which takes place exclusively in Nevada. In 2011, the state accepted $2.8 billion in sports bets, leading to $140 million in gaming revenue. Nearly half of all wagers placed were on football. In 2012, nearly $100 million alone was bet on the Super Bowl, which pitted the New England Patriots against the New York Giants.
