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AGA Releases Study

8 May 2006

WASHINGTON, DC – (PRESS RELEASE) -- The typical U.S. Internet gambler is under 40, college-educated, male and more affluent than his fellow citizens, according to results of a new survey of online gamblers included in the American Gaming Association's (AGA) 2006 State of the States: The AGA Survey of Casino Entertainment. The report also includes comprehensive economic impact data on the U.S. commercial casino industry, which indicate the industry in 2005 generated more than $30 billion in gross gaming revenues for the first time ever.

According to the poll of Internet gamblers, conducted by Peter D. Hart Research Associates, Inc., fully 70 percent of respondents started gambling online within the past two years, indicating the growing popularity of this activity. And while Internet gamblers in the U.S. say they enjoy online gambling for its convenience, more than half (55 percent) believe online gaming companies find ways to cheat, and 46 percent believe their fellow players cheat. The survey also revealed a great deal of confusion about the legality of online gambling, with a mere 19 percent of respondents realizing - - or willing to admit -- that the activity currently is illegal in the U.S.

"Even though our member companies currently aren't involved in the online gaming market, and the overall percentage of Americans who gamble online is relatively small, there's no doubt this issue has captured the attention of the media, members of Congress and the American public," said Frank J. Fahrenkopf, Jr., president and CEO of the AGA. "We strive to make each year's State of the States report the most comprehensive information resource not only on the current state of our industry, but the most significant emerging trends in gaming, so it was important that we take a look at this growing phenomenon."

In addition to the online polling results, the AGA's 2006 State of the States survey includes detailed data on the economic impact of the U.S. commercial casino industry at the national and state level. The data show that the industry continued to exhibit strong growth in 2005, despite the tremendous challenges brought by Hurricanes Katrina and Rita last fall.

Last year, the 455 commercial casinos in 11 states generated $30.29 billion in gross gaming revenue, representing an increase of nearly 5 percent over 2004 revenue totals. Individual gaming markets also witnessed landmark success, with Las Vegas revenues surpassing $6 billion and Atlantic City revenues climbing above $5 billion for the first time.

Survey data also indicate the industry continued to be an important source of employment in the areas where it operates, providing more than 354,000 employees with wages totaling more than $12.6 billion, including benefits and tips. The industry also continued to be a major source of tax revenues, contributing $4.92 billion to state and local governments in 2005, an increase of just fewer than 5 percent from 2004 totals.

State of the States also includes a detailed look at the growing economic impact of racetrack casinos, or racinos. In 2005, the 29 operational racetrack casinos in nine states generated $3.12 billion in gross gaming revenue, a more than 9 percent increase over 2004 figures. Racinos employed 17,000 people in 2005 and distributed $1.28 billion in direct gaming taxes to state and local governments.

"This year's survey confirms that the U.S. commercial casino industry has continued to grow despite the significant obstacles of the past year, and has become an integral component of America's entertainment culture," Fahrenkopf said. "With reconstruction along the Mississippi Gulf Coast continuing at a rapid pace and new gaming markets expected to come online later this year, we look forward to even greater success this year."

This year's survey once again features a special section devoted to poker. The data indicate that the poker boom that started in 2004 is still going strong, with nearly one in five American adults (18 percent) again reporting they played poker last year. The opportunity to spend time with friends and family, followed by the skill and strategy involved in the game, are the top reasons people play poker, according to results of a national poll conducted by Luntz, Maslansky Strategic Research. Poker revenues also continued to surge in 2005. In Nevada and New Jersey, the only commercial casino states that track poker revenue, U.S. casino visitors spent more than $207 million on organized poker last year, an amazing 37 percent increase over 2004 totals.

Survey results also indicate overall acceptability of casino gambling remains high, with nearly 80 percent of respondents saying it is acceptable for themselves or others. According to the poll, Americans also continue to overwhelmingly view gambling as a question of personal choice (83 percent), and nearly three-quarters (72 percent) see casinos as a valuable part of a community's entertainment and tourism options.

The 2006 State of the States includes additional information tools and resources such as a pocket guide to key national and state economic statistics and a glossary of often-confusing gaming terms.

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