Just How Big are Casino Profits?

Last week I was in Las Vegas on vacation. I placed some baseball bets at the local sportsbooks. Unfortunately, I lost most of them as I was too distracted to do any thorough handicapping. But, betting and losing is part of the risk of being a sports gambler. Shake it off and move on.

In order to place my bets, I had to walk past hundreds of slot machines and dozens of card game tables to find the tiny corner of the casino where the sportsbook was being housed. This process got me to thinking just how little sports betting action means to the casino. The sportsbook took up probably 0.2% of the building’s space. And the space it was in wouldn’t have been very good for slots or tables. The sports betting option almost seems like a courtesy at Las Vegas casinos.

When you study the raw numbers of casino profits, you can really see the huge amount of money being generated by the card, numbers and slot games. One of the more clear cut studies in recent years was done in 2012 by the American Gaming Association (AGA). It has the following statistics:

1. There are 464 commercial casinos in the U.S.
2. They served 76.1 million patrons in 2012.
3. They grossed $37.34 billion.

That is more than the movie and music recording industry combined ($10.9B and $7B respectively). It is even more than the four major U.S. sport’s combined revenue ($22.5B).

This information in conjunction with articles in the past where we described the relatively small revenue generated in sports gambling serves to dispute the theory that legalizing sports betting in each state will generate large sums of profit. But at the same time it supports the notion that sports betting should be legal in every state as it poses much less of a threat to society than casinos that have already been running for decades. The threat I speak of is the one of “problem” or “degenerate” gamblers often mentioned by opponents of the current push to legalize sports betting in each state.