The Financial Benefits of Legalizing Gambling in Texas
by Paul Cannon 
January 28, 2006

Simply put, legalizing gambling in a state stimulates the economy. Legalize it and tax it. Casinos create millions in taxable revenues. Casinos further stimulate the economy by the creation of direct and indirect jobs. In addition to this, casinos stimulate an economy through the generation of tourism revenues.

The amount of taxable revenues created by casinos and gambling facilities is astounding. In 1997, Mississippi’s 29 casinos had gross wagering of $33.8 billion of which $198 million went to the state in gross gaming revenues.[1] In 1995, state revenues from gambling in Illinois reached $900 million.[2] In 1996, estimated gross gambling revenues for the California gambling industry totaled $2.3 billion.[3] Closer to home, the Casino Association of Louisiana reports that casinos in Louisiana pay over $18.2 million in state and local taxes monthly. [4] In the 2002-2003 fiscal year, the Louisiana riverboat casinos paid the state over $335 million in gaming taxes, with another $78 million going to local governments.  Perhaps, with those revenues we could finally give teachers a well-deserved raise without a bake sale?

Casinos also stimulate the economy by creating jobs. For example, there were 193,000 full-time positions in Clark County Nevada's hotel and gaming industry in 1999.[5]  In states where gambling is legal but is not as predominant as Nevada, the numbers of jobs are smaller, yet still significant. The Casino Association of Louisiana reported that the riverboats employed approximately 15,000 people and pay over $368 million in annual salaries to employees. Furthermore, 20% of those persons ended their dependence on government assistance programs by taking a job in the casino industry thereby saving tax dollars.

What does this mean?  More people employed means more money in the hands of consumers to spend. It means more sales taxes paid to the state. It means fewer people on state and federal government assistance programs like, welfare, Medicaid and/or unemployment.

            In addition to the direct jobs created, legalizing gambling creates countless jobs indirectly. Local construction companies are hired to build the casinos. This means equipment is leased, and building materials such as cement, wood, dry wall and electrical wiring are purchased and used locally. Over $1.7 billion has been invested in facility construction in Louisiana by casinos. Thus, the companies that supply these goods and services to casinos will grow and expand.

            Casinos also create countless indirect jobs in the service industry. Can you imagine how much food those extravagant buffets go through daily?  Someone has to supply it…locally. What about all the decorations? What about the computers? Who provides support and software? What about the hotel linens? Someone has to clean them don’t they? Louisiana riverboats purchased over $454 million in good and services in 2002, with over 70% of that coming from in-state vendors including computers, printing and floral arrangements. With all those goods and services being purchased every year, local businesses have to expand and add new employees to keep up with the demand.

            Legalizing gambling also generates new revenues to the state via tourism. The Casino Association of Louisiana estimated that over 17 million out-of-state visitors visited their casinos in 2002. Those people not only spent money at the casinos, but also at gas stations, hotels, restaurants and local shops.

            Also significant to Texas is the fact that legalizing gambling would plug the outflow of Texas dollars to Louisiana casinos. In Louisiana, approximately 53% of their gaming revenue comes from out-of-state. They boast that most of it comes from Texas. Of the 17 million visitors to Louisiana casinos, they come primarily from the Houston and Dallas areas. Nearly a million people a month come from these areas to the Shreveport/Bossier City riverboats. The Louisiana Casino Association conservatively estimates that out-of-town visitors spent more than $873 million in 2002 while visiting casinos in Louisiana. Why are we spending the money over there instead of in Texas?  Because they allow us to.

            In summary, the financial benefits of legalizing gambling are millions in monthly tax revenues and stimulation the economy by creating tens of thousands of jobs. By not doing it, we are not stopping Texans from gambling, we are simply depriving our state of the tax and economic benefits associated with it. Legalizing gambling simply makes good dollars and sense.