Pari-Mutuel Gambling and Its Economy Impact

Additionally, NORC found increased per capita income in the construction, hotel and lodging, and recreation and amusement industries. However, “no change is seen in overall per capita income as the increases noted above are offset by reductions in welfare and transfer payments as well as a drop-off in income from restaurants and bars…” 37 In other words, there were more jobs in the communities NORC studied after casino gambling was established than before. Although income in those communities stayed the same, more came from paychecks and less from government checks than before.

The Commission also heard testimony quantifying job quality in the casino industry, and these data show that in terms of income, health insurance, and pension, casino jobs in the destination resorts of Las Vegas and Atlantic City are better than comparable service sector jobs. Matthew Walker, director of research and education for the Hotel Employees and Restaurant Employees International Union, which represents approximately 75,000 gambling industry employees nationwide, testified that from 1977 through 1996, real income for Atlantic City casino workers increased at a much higher rate than real income for service-sector employees in New Jersey and the United States as a whole. Moreover, since 1989, real income for Atlantic City casino workers has continued to rise, while real income for New Jersey and U. S. service workers has declined. In 1996, 83 percent of Atlantic City’s unionized casino workers were covered by family health insurance, almost twice the percentage of New Jersey and U. S. service workers with family coverage. In 1993, the most recent year for which comparative data were available, 95 percent of the union’s Atlantic City members were earning pension benefits, as compared to 45 percent of the private-sector workforce nationally. 38

Within the casino industry, destination resorts tend to create more and better quality jobs than other kinds of casinos. In the Commission’s casino survey conducted by NORC, the casinos that responded were divided into three groups: the top 25 casinos in terms of revenue; other commercial casinos; and, tribal casinos. Almost all of the casinos in the first group are destination resorts, and all but four are unionized. By contrast, a much smaller proportion of the other two groups are destination resorts. Moreover, fewer of the smaller commercial casinos and none of the tribal casinos are unionized. Annual salaries were, on average, $26,000 in the largest casinos, $20,500 in the smaller commercial casinos, and $18,000 in the tribal casinos. Employer contributions to employee health and retirement plans were also higher in the large casinos. 39

Another segment of the gambling industry with a significant impact on the economy is the pari-mutuel industry, which is legal in 43 states. With over 150 racetracks in the United States, horse racing generates annual gross revenues of approximately $3.25 billion, based on a handle, or gross revenues, of $15.357 billion annually. 40 While comparatively small in terms of revenue, the industry has an extensive network of connections throughout the economy. These are located primarily in the agro-industrial sector where, in addition to the racing industry itself, a number of related occupations¾such as veterinarians, owners of stables, and others¾owe their livelihoods entirely or partly to the industry. Total employment has been estimated at 119,000, of which track and off-track betting (see below) operations constitute 36,300 jobs, maintenance of competing horses 52,000, and breeding 30,800. 41 A 1994 study for the California Horsemen’s Benevolent and Protective Association reported that the horse-racing industry directly created 14,700 jobs in that state. The industry generated over $800 million in direct expenditures, such as payroll, taxes, and purchases, including $129 million paid to governments from taxes on wagering, $306 million spent on operations at the wagering facilities, $253 million on racing stable operations, and $123 million for horse breeding operations. 42 Overall, James Hickey of the American Horse Council has submitted evidence to the Commission that the annual impact of the pari-mutuel industry on the U. S. economy is $34 billion supporting 473,000 jobs. 43 1998) (Director of Research and Education, Hotel Employees and Restaurant Employees International Union).

37 Ibid., p. 70. 38 Matthew Walker, testimony before the National Gambling Impact Study Commission, Atlantic City, New Jersey (January 22, 39 NORC, p. 2. 40 E. M. Christiansen, Gaming and Wagering Business (July and August, 1998).