Casinos and the gambling Industry are unique in IMPLAN and don’t follow a single Industry. This article outlines a few considerations to bet on when modeling them.
One thing to keep in mind when thinking through casino impacts is that Output for casinos is revenue net returns to the gambler. That means that the casino Output already excludes all of the payments made to those that walked away winners. This is total revenue less losses to the house. Your Output value may need to be adjusted to reflect that definition.
Sometimes what seems like gambling, may be considered basic amusement. Remember to check the IMPLAN Industry or the NAICS codes to ensure that you are capturing the Industry you want to model. For example, IMPLAN Industry 504 - Other amusement and recreation industries includes billiards and pool halls while Industry 498 - Racing and track operation covers dog and horse racing tracks.
Running a basic casino through IMPLAN can be done through Industry 503- Gambling industries (except casino hotels). However, this assumes that the only activity in the facility is gambling. Many modern casinos operate a few businesses under one roof; restaurants, retail, and hotels. Splitting out the operations of each entity is the best way to model a casino with multiple businesses.
Following the definition of the BEA, IMPLAN separates the different business functions of both Industry 503 - Gambling industries (except casino hotels) and Industry 507 - Hotels and motels, including casino hotels. These are divided between:
- Real Estate
- Performing Arts
- Personal Services
The casino’s business may match multiple IMPLAN Industries and should be distributed appropriately. Note that some entities within the hotel may actually operate as separate businesses. For example, a casino may contain a chain restaurant that would not be included in the Output for the casino.
ATLANTIC CITY TO YAVAPAI:
Gambling is not legal everywhere in the US. Therefore, when you are trying to model it in your region, it may not exist. You can borrow the Output equation from a comparable region or the national model as outlined in the article Adding an Industry by Customizing a Region or Adding an Industry that Doesn’t Exist Yet.
Also, a state may be drastically changing their laws. For example, they could currently have a state lottery, which would fall under the same Industry as casino gambling. Adding a large-scale casino to the state would drastically change the spending that occurs within that Industry. Even though Industry 503 exists, it may not reflect the spending that will happen when the casino opens.
Even when a state has legalized gambling, illegal activities might still occur. At this point, they are not included in the BEA accounts (Fun Fact: Eurostat already addresses this in their data). You can read all about it in the article Including Illegal Activity in the U.S. National Economic Accounts by Rachel Soloveichik. Per the BEA’s Concepts and Methods of the U.S. National Income and Product Accounts, “these activities are excluded from the U.S. accounts because they are by their very nature conducted out of sight of public scrutiny and so data are not available to measure them.”
Casinos are owned by different entities. Corporately-owned casinos will fall under Industry 503 - Gambling industries (except casino hotels). However, many casinos are owned by Native American tribes and these establishments will actually show up in Industry 534 - Other local government enterprises.
Written September 25, 2019