US: State revenues from gambling rose 2%

States collected US$ 23.94 billion in revenues from gambling in fiscal 2010. Lotteries, casinos, racinos and pari-mutual wagering, Institute researchers Lucy Dadayan and Robert Ward found, generated the revenues.

Gambling has expanded tremendously over the past four decades. Some 43 states have lotteries, while others allow commercial casinos, slot machines and wagering on horse races. Only two states -- Hawaii and Utah -- have no lotteries or gambling.

Gambling revenues have grown about 4 % on average over the past decade or so -- from US$ 15 billion in 1998 to US$ 24 billion in 2008 -- as states have expanded all forms of gambling in lieu of raising more traditional taxes.

One state, Pennsylvania, accounted for nearly half the nationwide growth in gambling revenues in fiscal 2010, totaling US$ 2.12 billion. The state's lottery generated US$ 915.7 million, while US$ 319.6 million came from casinos, US$ 871 million came from racinos and US$ 17.5 million came from pari-mutual wagering

Pennsylvania remains second to New York (US$ 2.7 billion) in total gambling-related revenues, followed by Florida (US$ 1.39 billion) and New Jersey (US$ 1.26 billion).

Nevada casinos generated gambling revenues of US$ 829.3 million in fiscal year 2010. The Silver State does not have a lottery, racinos or pari-mutual wagering.

While casinos and racinos are the focus of attention in many states, lotteries remain the primary source of gambling revenue, generating US$ 16.3 billion nationwide in fiscal 2010.

Receipts from legally sanctioned gambling represent a relatively small portion of overall state revenues. But such collections have provided a "remarkably consistent" 2.1 % to 2.5 % of revenues between 1998 and 2009, the report found.

"While such an amount may seem almost inconsequential ... governors and legislators often face politically difficult choices in closing budget gaps that are much smaller," Dadayan wrote. "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."

State revenue from gambling varies when adjusted for population. In Nevada and Rhode Island, such revenues amounts to more than US$ 400 per person, compared with less than US$ 100 per resident in California.

Not surprisingly, gaming revenue accounts for the largest share of the budget -- 12.5 % -- in Nevada.

Nevada is also home to 60 % of U.S. casinos and in fiscal 2010 collected about 18 % of all state revenues from casinos nationwide. That "despite a tax on casino activity that is relatively low at 6.75 %," the report said.