The last few years have opened the eyes of many in the gaming industry – not only is gaming clearly not recession-proof, but as casinos proliferate into new jurisdictions, it becomes a challenge to grow the overall market instead of simply shifting market share.

                           
Total U.S. gaming revenue in 2011 was $37.1 billion in the 24 states covered in this analysis. Of that total, $29.7 billion was generated from traditional casinos, while $7.4 billion came from racetrack casinos, many of which offer table games in addition to gaming machines.

The 2011 total represents a decline of $2.1 billion, or 5.3 percent, since 2007, when total gaming revenue was $39.2 billion. But a closer look at the numbers indicates that racetrack gaming has come on strong, increasing by $2.1 billion over the period while revenues from all other casinos dropped by $4.3 billion. Most of the newer jurisdictions have chosen to add gaming to their existing racetracks rather than develop entirely new facilities, although Ohio will open both types of properties this year and Massachusetts legislation calls for competitive bids regardless of whether racetracks are involved.

By comparison, the equivalent revenue generated from traditional games offered by state lotteries (sales less prizes; excluding VLTs) was approximately $21.8 billion in fiscal year 2011 (calendar year data is not readily available), an increase of about $1 billion since fiscal 2007, or 5 percent. Just one new lottery was established during that time.

With a number of states adding casino-style gaming in recent years, it’s no surprise that the number of machines and tables has increased, despite the decline in total revenue. By the end of 2011, gaming machines numbered in excess of 435,000, up from some 407,000 at the beginning of 2007. Over the same period, table games increased from over 12,000 to nearly 14,000.

Now for the usual notes and disclaimers.

Only commercial gaming is included in this analysis, with the exception of the two tribal casinos in Connecticut – not only are slot revenues there reported regularly, but as two of the largest casinos in the world, they have had a major impact on the entire Northeast corridor.

Excluded from the data are card rooms at racetracks (Florida and Minnesota) and gaming machines in bars and clubs (video lottery terminals in Oregon, South Dakota and limited video lottery in West Virginia; video poker in Louisiana; and slot machines at clubs in New Mexico).

The revenue numbers may represent either net win or adjusted gross receipts, depending on the reporting standards of each agency.

Many regulatory agencies issue formal and audited annual reports on a fiscal year basis instead of using calendar years. All data in this analysis is presented for calendar years, meaning that for many jurisdictions, it represents a compilation of statistics from monthly or even weekly reports at the time they were issued. Any subsequent adjustments are not reflected, but these are usually minor and for the purposes of this trend analysis, immaterial. The goal here is to examine economic and competitive trends, and consistent time periods is a critical factor.

Other articles in this series:
Part 2: Mature casino gaming markets feel the heat
Part 3: Newer gaming markets make their presence felt
Part 4: Top revenue-producing casino markets -- Nevada leads, Pennsylvania grows
Part 5: A look towards gaming's future in U.S. casino markets