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Casino report sees wide economic benefits from gambling in Missouri

Missouri’s 13 casinos contributed more than $3.4 billion to the state’s economy last year and reduced its unemployment rate by more than 1 percent, according to a report by the American Gaming Association.
Missouri’s 13 casinos contributed more than $3.4 billion to the state’s economy last year and reduced its unemployment rate by more than 1 percent, according to a report by the American Gaming Association. The Kansas City Star

Missouri’s 13 casinos contributed more than $3.4 billion to the state’s economy last year and reduced its unemployment rate by more than 1 percent, according to a report issued Wednesday by the American Gaming Association.

A similar report earlier this month put the contribution of Kansas’ three big casinos to their state’s economy at $673 million, generating enough jobs to shave half a percentage point off the unemployment rate.

The figures are breakdowns from a national analysis of 2013 data that for the first time aimed to measure casinos’ full economic contributions. So beyond casinos’ direct employment, revenues and gaming taxes paid, the analysis estimated spinoffs such as business for casino suppliers and economic activity generated by casino employees spending their salaries.

Christopher Moyer, the gaming association’s director of media relations, said the industry group commissioned Oxford Economics to do the analysis because “we wanted to ensure that policies are made based on the facts about the total economic impact of gaming.” The association’s previous annual reports, he said, “did not encompass all the positive aspects” of the industry.

Because the report was billed as the first of its kind, it didn’t include comparisons with past years. Generally, the casino industry has been slipping nationwide, with Missouri’s revenue eroding more slowly than in some big markets. Kansas, relatively new to the game, has been an industry bright spot, with its Kansas City, Kan., and Wichita area casinos doing well.

Some of the numbers from the report:

▪ Missouri casinos pulled in more than $2 billion in revenue in 2013, mostly from gambling, and Oxford Economics estimated that nearly $1.4 billion in spinoff economic activity was generated. Kansas casino revenue was nearly $416 million, with more than $257 million in spinoff activity.

▪ Missouri casinos directly employed 12,203 people with a payroll of nearly $443 million. The report estimated spinoff activity created 8,731 jobs paying more than $417 million total. Without all those jobs, the report said, Missouri’s jobless rate would rise 1.2 percent.

▪ Kansas casinos directly employed 2,224 people with a payroll of more than $92 million, the report said, and 1,797 spinoff jobs paying nearly $56 million total. Without those jobs, the report said, Kansas’ jobless rate would rise 0.5 percent.

▪ Missouri casinos paid $452 million in gaming taxes but paid or generated even more than that — an estimated $547 million — in other federal, state and local taxes. Kansas casinos paid $99 million in gaming taxes and paid or generated nearly $94 million in other taxes.

Such extrapolations have their critics but are common in estimating the overall effects of other economic sectors, sporting events, tourism and conventions.

Troy Stremming, a veteran Missouri casino executive, said he was pleased to see a report assessing the industry’s full impact, “even though it’s difficult to measure multiplier and ripple effects.”

“You can argue some of those effects, but the direct impact is very significant in Missouri and has been for almost two decades,” said Stremming, the executive vice president of government relations and public affairs for Pinnacle Entertainment, which operates the Ameristar casino and hotel in Kansas City and two others in the St. Louis area.

He added that the recent drop in Missouri’s casino revenues wasn’t bad after the industry held up well through the recession. And as for growing competition from Kansas and other states?

“In some ways, we were our own worst enemy,” Stremming said, because Missouri showed neighboring states “that gaming can be a mainstream entertainment industry with significant employment and revenues and taxes” and without the social problems sometimes associated with gambling.

Oxford Economics, affiliated with Oxford University’s business school, was started in 1981 to provide economic modeling and forecasting for United Kingdom companies. It has expanded its client list over the years to 200 countries and 100 industrial sectors.

To reach Greg Hack, call 816-234-4439 or send email to ghack@kcstar.com.

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