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Midwest Gaming Industry Holds Steady During Recession
June 29, 2010
-Gaming survey by RubinBrown predicts continued growth for regional gaming industry
ST. LOUIS – The Midwest gaming industry saw moderate success during 2009, despite a 6.5 percent national decline in revenue, reports RubinBrown, one of the Midwest’s largest accounting and business consulting firms. Commercial Gaming Stats 2010, available at http://www.rubinbrown.com, pools 2009 data from 445 commercial land-based and riverboat casinos in 13 states with legalized gambling. Data was compiled from state gaming regulatory authorities and the American Gaming Association.
Missouri was only one of three states to increase adjusted gross receipts (AGR), with revenue rising 2.85 percent from the previous year resulting in a slight boost in tax revenue from gaming operations. Pennsylvania had a 21.6 increase in AGRs while Colorado experienced a 2.65 percent increase. The most significant declines were felt in traditional gaming states like Nevada and New Jersey, which suffered double digit reductions, 10.4 percent and 13.25 percent respectively, in revenue.
The report credits the moderate success in the Midwest to a decline in U.S. tourism, the addition of new casinos and expansion of existing facilities for a more regionally-focused gaming industry in the past few years. The four Midwest states, Illinois, Indiana, Iowa and Missouri, comprised 22 percent of the 2009 AGRs nationwide.
“Although we were in a recession, gaming in the Midwest has not been deeply affected for the most part because consumers are spending less on travel,” said Chelle Adams, CPA, partner-in-charge, Gaming Services Group, RubinBrown. “People are staying closer to home and spending less on bigger travel destinations, allowing for the Midwest to continue creating capital projects.”
Adams attributes three common traits to the success of new and established gaming properties: strong patron loyalty through service and rewards programs, leadership in technological innovation that improves the patron experience, and a commitment to continuous improvement of internal processes.
Despite the growth in Missouri, not all Midwest states had similar success in 2009. Indiana, although suffering a slight drop in revenue, fared better than its neighboring states to the south, due in part to continuing capital investments and several new additions to existing operations. Iowa saw only a 0.2 percent drop in revenues, but felt a more significant drop in patron attendance.
Illinois experienced the most marked drop in revenues among Midwestern states, with a state-wide decrease of 9 percent and a severe 14 percent decline in the Chicago market. However, these revenues, according to Adams, may stabilize in 2010 due to the enactment of the Video Gaming Act in July of 2009, which legalized video gaming terminals at licensed establishments.
“Missouri gaming revenue should increase in years to come as well, with the continued growth and success of its 12 casinos, including the addition of one in south St. Louis,” said Adams. “Overall, the Midwest is expected to fare better than some of the other traditional powerhouse gaming regions.”
RubinBrown has more than 340 team members working from offices in St. Louis and Kansas City. Founded in 1952, the firm’s team members hold leadership roles in both national and local accounting organizations and have worked to establish best practices in accounting within specific industry segments. RubinBrown is an independent member of Baker Tilly International, a network of 145 independent firms in 110 countries. For more information, visit www.rubinbrown.com.
