Gaming is ahead of the economy, but with plenty of uncertaintiesBy Nick Sortal, CDC Gaming ReportsApril 18, 2018 at 11:26 amCasino gambling in the U.S. outpaced the general economy in 2017, according to information from RubinBrown, an accounting and business-consulting firm. Total commercial gaming revenues in 2017 were $39.9 billion, a 4.1 percent over 2016, while Native American casinos collected $32.6 billion, up 4.6 percent from the year before. Those increases outpaced the U.S. inflation rate (2.1 percent) and real GDP growth (2.3 percent). The figures are part of the release of RubinBrown’s 2018 Gaming Statistics publication, which provides a comprehensive review of the U.S. gaming industry.CPA Brandon Loeschner, who along with Daniel Holmes is a practice leader of RubinBrown’s Gaming Services Group, said the two see moderate growth for the short-term, but is hesitant to make longer-term predictions for casino gambling. There are several wild cards in play that impact casino growth:Maturation: “I don’t know how many more years of industry-wide growth we’re going to see. At some point I believe we will reach maturation,” Loeschner said. “I anticipate Native American casinos will continue to grow at a rate that outpaces the nation’s overall economic growth for the next couple of years; however, that is based on location. The continued growth will be in and around the west coast and large metropolitan markets. We have to remember the east coast is getting more saturated with increased commercial growth and competition.”Alternative forms of gambling: “What’s happening with gaming expansion legislation that includes limited stakes games, fantasy sports, sports betting and iGaming with the market?” Loeschner asks. “The biggest game changer will be sports betting and the repeal of PASPA. I think it’s highly correlated, but does it give us 20 percent or 3 percent growth?” he asks. “I do not want to what we’ll see.” Holmes notes that that the iGaming segment continues to be the fastest growing segment, with online wagering in New Jersey increasing the segment’s overall revenues by 24.2 percent. “It is expected that this gaming segment will continue to grow as it remains an emerging industry within the United States,” he stated. In 2017, the limited stakes gaming segment generated $3.8 billion, an increase of 6.9 percent compared to 2016 revenues. He notes the increase in gaming revenues was primarily due to the continued proliferation of limited stakes gaming throughout Illinois. While these alternative forms of gaming will boost the overall industry, they will have a negative impact on the traditional brick and mortar casinos.Legislation: “Growth of the gaming industry will be heavily impacted as gaming expansion laws continue to be discussed as a way to balance state budgets,” he said. “Particularly in those states where Tribal and Commercial gaming compete.” Pennsylvania’s recent legislative efforts are most notable as they legalized both online gaming and limited stakes gaming.To provide context, RubinBrown reported on the growth of the industry from 2007, to show the industry’s performance since the Great Recession. “During this period, the industry has opened approximately 100 new casinos, created a $1.3 billion limited stakes gaming market in Illinois, and both outlawed and subsequently legalized an iGaming market that produces approximately $250 million in annual revenues,” the report states.In regional markets, RubinBrown sees the gaming industry continuing to strengthen after adjusting to the impact of new competition. In 2017, 8 percent of the 150 individual casinos tracked by RubinBrown had a double-digit growth rate in revenues; over 60 percent had a year-over-year increase in gaming revenues. That compares favorably to 2016, when only 3 percent of the 150 casinos had a double-digit growth rate and only 48 percent of the casinos had year-over-year revenue growth.RubinBrown’s Native American figures for 2017 were computed by starting with 2016 figures released by the National Indian Gaming Commission, and projecting growth rates experienced in each of the seven tribal gaming regions. RubinBrown then applied its own metrics. A more detailed report, by Nathan Associates Principal Economist Alan Meister, is traditionally released later in the year, but is for casino performance of a year earlier (in this case for 2016). Meister’s report has more detail and is deeper-sourced for tribal information, but the RubinBrown study provides more timely information for its clients.The RubinBrown report includes statistical data from over 1,000 gaming operations, spanning 40 states and covering all four of the U.S. gaming segments the company tracks: commercial casinos, iGaming, limited stakes gaming, and tribal casinos. The publication is available at no cost at RubinBrown.com.