Double Down

Politicians seeking new revenue without raising taxes are fond of the old adage that the gambling industry is recession-proof. Wanna bet?


By the Numbers
Illinois casino revenues are on a cold streak. Here’s how annual adjusted gross receipts (in thousands of dollars) for January through July 2007 compared with January through July 2008.
Source: Illinois Gaming Board

Trouble in River City. Illinois riverboat casino revenues from January to July of this year are down almost 18 percent from the same period last year.

Adjusted gross receipts, or total bets less payouts, have dropped from $1.17 billion in the first seven months of 2007 to $957 million in 2008. The number of visitors decreased 7.4 percent over this period, from 9.54 million to 8.83 million. The average amount each visitor spends is down, too—11.3 percent, from $122.22 to $108.73. The revenue slump has meant $76 million less in state taxes collected for the Education Assistance Fund.

Gambling centers in other states have also seen revenues decline: Nevada is down 5.44 percent from January through June over the past year; New Jersey’s adjusted gross revenues dropped 6.2 percent over January through July.

Other forms of gambling in Illinois have been hit less hard. Off-track betting is down around 10 percent since the beginning of the year, according to Bob Bilocerkowycz, the president of Inter-Track Partners, which manages Illinois OTB parlors. On the other hand, Illinois Lottery sales for the year ending in July 2008 increased 2.05 percent over the previous year, though this is less than the 5.6 percent the consumer price index inflated between July 2007 and July 2008. (The 2008 lottery figures haven’t yet been approved by the lottery auditor.)

Why aren’t people gambling as much? Speaking for the casinos, Tom Swoik, the executive director for the Illinois Casino Gaming Association, says, “We still believe that the biggest cause is the ban on smoking.” (The ban took effect January 1st.) Bilocerkowycz cites the drop in disposable income from the economic downturn, winter storms that kept people from venturing out, the price of gasoline, and the smoking ban. Gene O’Shea, a spokesman for the Illinois Gaming Board, says, “It’s kind of like reading tea leaves. Everyone’s going to have a different answer.”

One number always keeps its head above water, though—the casino’s advantage. Even in this down period, gamblers are winning back only about 83 percent of what they bet on table games and 92.5 percent on electronic gaming devices, such as slot machines and video poker. The house always wins. You can bet on that.

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Cutting Losses

The average casino gambler in Illinois is leaving less at the table this year than last year. The only other time in Illinois riverboat casino history this has happened is the period between 1993 and 1997. Source: Illinois Gaming Board

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