Casino gambling was once considered a vice and immoral and limited to very few jurisdictions. Today the gaming entertainment industry is accepted in most all communities and continues to expand rapidly. What do you think are the reasons that casino compan

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Fundamentals of the U.S. Casino Industry By the American Gaming Association (AGA)

There are five types of legal gaming in the United States. 1. Charitable Gaming Charitable gaming is run for the benefit of nonprofit organizations, although the nonprofit may not necessarily be the operator of the games. Some examples of charitable gaming are PTA Monte Carlo nights, church raffles and bingo. Charitable gaming is the least regulated area of legal gaming. 2. Commercial Casino Gaming Casino gaming is the largest part of the commercial gaming market, and it continues to grow in popularity due to the creation of new casino destinations and the expansion of existing casino locales. A casino is usually characterized by the offering of banked games. Banked games are those in which the house is banking the game and essentially acting as a participant, meaning that the casino has a stake in who wins. Commercial casino gaming takes a variety of forms, the most recognizable of which consists of what are called Las Vegas style casinos. Other commercial gaming venues include excursion (mobile) and dockside (permanently moored) riverboats, card rooms and racetrack casinos, commonly called racinos. 3. Lotteries Though lotteries have a long tradition in the United States that goes back to colonial days, there were no legal, government sponsored lotteries operating in the country from 1894 to 1964. Legal lotteries experienced a rebirth in the 1960s. The first legal lottery in the twentieth century was the New Hampshire Sweepstakes, which began on March 12, 1964. Other northeastern states quickly followed. In 1981, Arizona became the first state west of the Mississippi River to authorize a lottery. 4. Native American Gaming In 1988, the Indian Gaming Regulatory Act legalized tribal gaming operations. Many tribes have viewed gaming as an opportunity to further economic development. Modern Native American gaming operations are owned and, in some cases, operated by sovereign tribes. Often, tribes contract with established commercial casino companies to operate the tribal gaming operations. 5. Parimutuel Wagering Parimutuel wagering refers to the type of gaming where the total prize pool is based upon the amount of money wagered. The more money gambled, the bigger the prize. Horse racing is the best known and most widespread parimutuel betting event, but other forms of parimutuel wagering include dog racing and jaialai.

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Today’s Commercial Casino Industry The commercial casino industry is an important part of the U.S. entertainment industry and the U.S. economy. It is vital to the states and communities where it operates, creating jobs and business opportunities for local businesses and providing direct gaming tax revenues to stimulate struggling economies and help communities grow. There are few sectors in our national economy that require such considerable capital expenditures, are as labor intensive and are as supportive of thousands of outside vendors and suppliers as the commercial casino industry. Thanks to these myriad contributions, gaming companies are stable business partners, playing a key role in the broader economic landscape of their host communities. Internationally, many U.S. commercial casino companies have helped to build the industry into an important part of the global economy by pursuing investment opportunities in emerging foreign markets. While expanding in size, the industry also continues to evolve in scope, providing new entertainment offerings and adopting technological innovations to deliver the best possible customer experience. TAXES AND RIGOROUS REGULATION The commercial casino industry is one of the most transparent, regulated, monitored and taxed industries in the United States. Many of today’s commercial casino companies and gaming equipment manufacturers are publicly held companies that are traded on the New York Stock Exchange (NYSE) and the NASDAQ stock exchange. The strict regulation of the industry is due largely to the fact that state governments, who play the primary role in regulating the industry, depend on casino earnings for a substantial portion of their tax revenues. Gaming taxes vary by state, ranging from 6.75 percent of gross gaming revenue for the largest casinos in Nevada to 55 percent of gross gaming revenue for casinos in Pennsylvania.

The billions of dollars in state and local tax revenue paid by the gaming industry go to fund necessary programs and expenditures like education, public safety, historic preservation, infrastructure improvements, economic development and youth and senior services. States with legalized commercial casino gaming employ state regulating agencies to enforce a significant number of financial disclosure rules on casinos to ensure the states receive the taxes due to them each year. The agencies also direct and review audits of casino operators to ensure accurate measurement of the revenue numbers that result in state tax dollars. The total cost of state regulation reaches hundreds of millions of dollars each year, and the Nevada Gaming Control Board alone employs approximately 450 individuals.

Most states require casinos to adopt and adhere to a set of state designated procedures, typically called the “Minimum Internal Control Standards (MICS).” These MICS focus on several aspects of the industry, including the conduct of games, the movement and handling of cash and equivalents, and the accounting and record trail of all transactions.

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Casino companies also are regulated at the federal level. In addition to complying with laws such as the Americans with Disabilities Act and other labor laws that affect all U.S. businesses, casino companies are required to comply with several regulations typically directed at financial institutions, such as banks and moneylending operations, due to the large amount of currency transferred on the casino floor. The Bank Secrecy Act was amended in 1985 to include casinos and other cash intensive businesses in a list of financial institutions subject to special requirements designed to prevent money laundering. The Act requires casinos to report every deposit; withdrawal; exchange of currency, gambling tokens or chips, or other payment; or transfer that is made by, through, or to the casino in amounts greater than $10,000. There are additional federal laws that affect commercial casinos in different ways. For example, riverboat casinos are subject to laws governing the federal Maritime Transportation Security Act. The industry also works closely with the Internal Revenue Service on a number of tax related issues. INCREASED INTERNATIONAL PRESENCE The international gaming industry is rapidly growing, both in size and into new jurisdictions. A number of U.S. commercial casino companies either have operations in foreign markets or are actively pursuing expansion abroad. In the past few years, Asian gaming markets in particular have experienced exponential growth, and many U.S. companies are seeking to open new properties there. Of the Asian markets, Macau is the largest and most successful, and often is referred to as the “Las Vegas of the East.” In fact, beginning in 2006, gross gaming revenue in Macau has surpassed that of the Las Vegas Strip. Other Asian markets like Taiwan and Korea are considering casino gaming, and casino properties in Singapore will soon further expand the Asian gaming industry. GROWTH OF NONGAMING AMENITIES Over the past several years, many of the commercial casinos in Las Vegas and beyond have metamorphosed into multicomponent entertainment venues offering a wide variety of nongaming amenities ranging from spas, golf courses and theaterstyle shows to retail shopping, fine dining and more. Building and publicizing a diverse range of amenities and food and beverage (F&B) options has been one of the key ways in which properties on the Las Vegas Strip and throughout the country differentiate themselves from their competitors and attract new customers.

In fact, on the Strip, nongaming amenities have become an important part of the industry’s bottom line. According to the Nevada Gaming Control Board, nongaming revenue on the Las Vegas Strip in fiscal year 2008 accounted for more than 60 percent of total revenue compared to just over 40 percent 15 years earlier. This number does not take into account independent restaurants and shops located in casinos, which account for a significant share of the overall F&B and amenity spending on the Strip.

While the Las Vegas Strip is not representative of all U.S. gaming jurisdictions, it does continue to lead industry trends. The importance of integrating a diverse portfolio of amenities and entertainment options into casino offerings is growing in other markets from Biloxi, Miss. to

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TECHNOLOGICAL INNOVATIONS The commercial casino industry continues to introduce new technologies that improve the overall customer experience and the efficiency of casino operations. A number of technologies are changing the modern gaming floor including: a general overall movement toward completely cashless slot floors thanks to the increasing utilization of ticket in/ticket out (TITO) technology; the introduction of serverbased games that allow operators to make changes to any slot machine on the floor from a single secure computer server within the casino; multiplayer games that allow customers to compete against each other on a single machine; and radio frequency identification (RFID), which several casinos are using in their casino chips to improve security and player tracking, and to increase the rating integrity of both players and dealers. GAMING EQUIPMENT MANUFACTURING SECTOR Gaming equipment manufacturing is an important and sometimes overlooked sector of the gaming industry. It includes suppliers of electronic gaming devices, systems, table games, key components and support products and services for the gaming industry. Gaming equipment manufacturing is a global industry with companies based in the United States and abroad and operating around the world.

According to a report produced by the Association of Gaming Equipment Manufacturers (AGEM), in 2007, the equipment manufacturing sector’s made significant contributions to the U.S. economy, providing 28,200 jobs that paid an estimated $1.9 billion in salaries, as well as approximately $11.9 billion in direct revenues. The global gaming supplier sector also generates a significant amount of public revenues, including almost $1 billion in corporate taxes. Many gaming equipment manufacturers are members of both AGEM and the American Gaming Association (AGA) and participate with casino operators in industry wide responsible gaming, diversity and philanthropy programs. GAMING INDUSTRY EMPLOYMENT OPPORTUNITIES The gaming entertainment industry offers some of the most dynamic and rewarding professional opportunities available today. It is a fast paced and exciting industry, offering a multifaceted corporate environment with extremely diverse career possibilities ranging from architecture and accounting to hotel management, computer science and information technology.

Employers in the gaming industry have a proven record of promoting from within and investing in their employees. Gaming industry employees receive highly competitive salaries and excellent benefits packages that can include health care benefits, retirement plans, paid vacation, child care options, training programs and tuition reimbursement. The industry consistently experiences extremely high employee satisfaction ratings and boasts impressive retention rates.

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COMMITMENT TO CHARITABLE GIVING Members of the gaming industry are among the most philanthropically active and largest donors among corporations. They contribute millions of charity dollars each year, and employees donate thousands of volunteer hours annually. Whether through support of charities associated with medical services delivery or research, care of the elderly, local infrastructure, or environmental sustainability, casino companies post an outstanding record of corporate responsibility. In the wake of Hurricane Katrina, gaming companies led in efforts to support the victims and were some of the most active in reinvesting in the Gulf Coast. During this time, the casino industry became a model for other employers for providing security of income, access to health care and a substantial infusion of capital to rebuild. ENVIRONMENTAL SUSTAINABILITY The commercial casino industry is committed to environmental sustainability and is a leader in this area among hospitality and entertainment businesses. Las Vegas is a prime example of the industry’s dedication to the environment, as it is soon to be home to the world’s largest concentration of environmentally friendly hotel rooms. A total of 15 major new building projects there are seeking the U.S. Green Building Council’s Leadership in Environment and Energy Design (LEED) Certification. These properties feature environmentally responsible construction and design, including lowwater pressure showerheads, fluorescent light bulbs, super insulating windows and walls, and the use of recycled building materials. Commercial casinos, resorts and manufacturers across the country have adopted additional sustainability programs to reduce their environmental impacts. Some of these green policies include replacing incandescent lights with cold cathode lights on marquees; developing an environmentally friendly laundry facility that uses 75 percent less water, 47 percent less natural gas and 27 percent less electricity; composting trees and plants that are no longer viable and replacing individual guest room air conditioning units with more efficient units. TRAVEL AND TOURISM The commercial casino industry plays a vital role in the overall U.S. travel and tourism industry. Roughly one quarter of the U.S. adult population visits a casino at least once a year, and casinos attract a substantial number of visitors from overseas. In fact, a 2009 survey found that 65 percent of Americans think the casino industry is important to the overall U.S. travel industry. Today’s casinos provide topnotch entertainment experiences that go well beyond gaming. The diverse amenities that make up the modern casino resort attract all types of tourists who also visit neighboring attractions, thus further stimulating the local economy.

Many gaming facilities also include state of the art convention centers and meeting facilities, making them important components of the business travel market. In fact, many gaming communities are some of the most popular convention cities in the country thanks to the level of value and service they provide. Twothirds of the national survey respondents consider casinos a vital part of the

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RESPONSIBLE GAMING While several individual gaming companies already had been at the forefront of responsible gaming activities for many years, the creation of the American Gaming Association (AGA) in 1995 provided the industry a unique opportunity to work together toward a consistent strategy for implementing responsible gaming practices.

The AGA immediately built on the existing successful efforts of individual casino companies by developing education and public awareness programs that could be used across the industry. In 1996, the AGA released the Responsible Gaming Resource Guide, the first comprehensive guide to implementing customer and employee education programs. Since then, the AGA and its members have made significant progress in casting a national spotlight on responsible gaming and disordered gambling issues through the creation of the National Center for Responsible Gaming, as well as highly successful programs such as the AGA Code of Conduct for Responsible Gaming, the Responsible Gaming National Education Campaign and Responsible Gaming Education Week. NATIONAL CENTER FOR RESPONSIBLE GAMING In 1996, the AGA and its member companies created the National Center for Responsible Gaming (NCRG) as the first and only national organization devoted exclusively to the funding of peer reviewed research on disordered gambling and to educating the public about responsible gaming. AGA CODE OF CONDUCT FOR RESPONSIBLE GAMING The AGA and its members codified their commitment to employing responsible gaming practices across the industry when the AGA board of directors enacted the AGA Code of Conduct for Responsible Gaming in 2003. The AGA Code of Conduct is an industry pledge to employees, patrons and the public to integrate responsible gaming practices into every aspect of daily operations, including employee assistance and training, alcohol service policies, and advertising and marketing practices. The AGA and its members’ continued support for responsible gaming research initiatives and public awareness programs targeting issues such as underage drinking and gambling also is reinforced in the code. In 1998, the AGA launched the Responsible Gaming National Education Campaign, a long term comprehensive program to promote responsible gaming practices and increase knowledge and awareness of disordered and problem gambling. The program now serves as the foundation for the association’s growing list of responsible gaming outreach activities and initiatives, including the popular “Keep it Fun” campaign that was launched in 2005. Throughout the year, the AGA publishes a number of information resources on responsible gaming for casino companies and patrons, including guides about the odds of winning at popular casino games and responsible gaming behavior. The majority of the materials currently are available in English and Spanish. The “Keep It Fun” campaign also includes a guide to responsible gaming that is available as a brochure in many casinos nationwide and a series of public service announcements (PSAs).

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RESPONSIBLE GAMING EDUCATION WEEK (RGEW) The signature program of the Responsible Gaming National Education Campaign is Responsible Gaming Education Week (RGEW), which the AGA and its members created in 1998. Held during the first week of August each year, RGEW is an industrywide education outreach effort targeted to employees, patrons and the public. During RGEW, industry representatives across the country promote a national theme through organized public education and awareness programs in their communities. Past RGEWs have adopted themes such as the “The Code Word is Responsibility,” which highlighted the AGA Code of Conduct; “We’re Banding Together to Keep it Fun,” featuring bright orange awareness wristbands; “Be Responsible. Get Educated.” which empowered employees to take advantage of a wide array of responsible gaming education resources; and “Let’s Talk About Responsible Gaming,” which encouraged employees to discuss responsible gaming practices with family members, friends and casino patrons. PREVENTING UNDERAGE GAMBLING Preventing underage gambling always has been a high priority for commercial casino companies. The AGA and its member companies have put into place a number of policies to prevent gambling by minors, including thorough staff training on properly certifying the age of patrons suspected of being underage, advertising that discourages youth gambling and more. The prevention of underage gambling also is addressed in the AGA Code of Conduct for Responsible Gaming. In addition, the National Canter for Responsible Gaming (NCRG) — the AGA’s affiliated charity — developed “Talking with Children About Gambling,” a resource for parents and others who mentor youth on how to talk with young people about the risks of gambling. (See National Center for Responsible Gaming (NCRG) in section five for more information.) While preventing underage gambling is a business imperative on its own, commercial casino companies have further reason to implement proactive measures that discourage and prevent the behavior because they are subject to substantial fines if they fail to enforce these regulations. INDIVIDUAL COMPANY PROGRAMS In addition to participating in the AGA’s industry wide responsible gaming initiatives, the AGA’s member companies implement their own responsible gaming activities and programs in their facilities and communities throughout the year.