Gambling is widely considered to be recession resistant. When times are tough, people may in fact be more likely to take a chance. Sales of lottery tickets, for instance, were up in most states. So why have state tax revenues from gambling dropped?
The NY Times reports that tax revenues from gambling have fallen substantially:
States that have been invested in gambling the longest have been hit hardest. Illinois reported a $166 million drop in tax revenue in fiscal year 2009, from 2008; Nevada had a $122 million drop, and New Jersey $62 million.
What are these states doing to counter their budget shortfalls? They’re doubling down to try to entice more gamblers back to the game. New Jersey repealed a smoking ban in casinos, and Illinois may give the OK for riverboat casinos to start doling out free booze.
But as the Times says, perhaps the states have tapped out as much money as they can get from gamblers:
The drop has led some gambling experts to wonder whether the industry is reaching market saturation, whereby a limited number of gamblers with a fixed amount of money to bet is being split across a growing number of gambling options.
Gambling revenues may have fallen in many states, but that does not necessarily mean that people are gambling less. They just may be gambling somewhere else—on the Internet, say, or in a neighboring state where gambling has recently been introduced. States rely heavily on gambling tax dollars, as Matthew Sweeney, author of The Lottery Wars says, so look for new games, flashier slots, higher payoff lotto tickets, and overall increased competition to attract the masses.