I. Statewide Economic Impact

The economic impact of an industry is generally measured in terms of employment and earnings. Total impact includes these at the source industry plus the spillover, or multiplier, effects. Suppliers produce goods and services for the initial industry, and employees in all industries demand more goods and services which brings forth still more economic activity. The Bureau of Economic Analysis (BEA) in the U.S. Department of Commerce generates multipliers using an input/output model to capture the total effects. Table 1 provides the appropriate calculations for the statewide effect of the casino industry using the directeffect employment and earnings multipliers. These multipliers are the latest for the State of New Jersey, and the BEA released them to the State's Department of Labor in the spring of 1995. Since the Bureau of Economic Analysis calculates no multiplier specifically for the casino industry, the multipliers for the "hotels and lodging places" industry (standard Industrial Classification code 70) are most appropriate.

Also, the New

Jersey Department of Labor records the casino industry employment and earnings data in this industry classification.

As Table 1 indicates, the total employment effect for the State of New Jersey is calculated as 91,600 jobs with 43,900 of them in the casino industry for 1994. In terms of earnings impact, 1994 casino industry salaries and wages were $973,867,000 according to the Casino Control Commission. As shown in Table 1, the statewide effect in terms of earnings paid to households

working in all industries is calculated as $1,953,090,200, or $1.953 billion. Thus, the total economic impact in the State is estimated to be roughly double that of the initial employment and earnings in the casino industry.

II. The Growth of Revenue and Employment

The strong revenue growth in the casino industry is

provided in two forms. The overall revenue for the casinos, hotels, and other entertainment operations appears in Table 2. For 1994 this was nearly $3.8 billion. The second revenue value often cited is only for casino operations.

value was over $3.4 billion for 1994.

In Table 3, this

Table 4 conveys the explosive growth of employment in the casino industry, which is consistent with that for revenue. In less than 10 years the annual average employment as reported by the State Department of Labor had reached over 40,000. of course large increments occurred as casinos opened, but the existing casino hotels also expanded. By 1984, casino employment reached over 30% of the annual average nonfarm payroll employment in Atlantic County.

Clearly, the casino industry has had a large and favorable economic impact through its own employment, but the question arises as to what effect there has been in the local area outside the casinos. Table 5 provides an estimate of this spillover effect of the casino industry. It is assumed that even if the casino industry had not begun in 1978, nonfarm payroll employment

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in Atlantic County would have continued to grow consistently with growth during the ten years prior to 1978 and consistently with growth in nearby areas, such as the Camden Labor Market Area (Burlington, Camden, and Gloucester Counties combined). Based on this growth assumption, a statistical prediction appears in Table 5 for payroll employment if the casino industry had not come into existence. If we add this estimate to the actual casino industry employment and subtract this total from the actual total employment, we are left with an estimate of the induced, or spillover employment effect of the casino industry. In 1994, this was 14,900 in terms of the average annual nonfarm payroll employment (both private and public) for Atlantic County. the total impact in the County was 58,800 jobs, or the sum of 14,900 jobs plus the average annual payroll employment of 43,900 in the casino industry.

Thus,

III. Taxes, Fees, and Obligations

The largest distinctive tax paid by the casino industry is the 8% tax on the gross casino revenue. The payment is made to the casino revenue fund, a trust fund for several programs benefitting senior citizens and the disabled throughout the State. As shown in Table 6, the 1994 tax payments were $272.3 million and disbursements $277.5 million. These disbursements go to programs throughout the state including PAAD (pharmaceutical assistance to the aged and disabled, Lifeline (utility payments), transportation aid, boarding home assistance, senior citizen

housing, and community health services.

Many New Jersey

residents also benefit from the real estate property tax

reimbursement program.

Funds not spent earn interest, which

permits the total cumulative disbursement of $2,966.0 million to exceed the total taxes paid of $2,859.5 million as of 1994 as shown in Table 6.

Regulatory fees

Two other distinctive payments made by the industry are shown in Table 7. For 1994, $42.5 million was the "Reinvestment Obligation" paid to the Casino Reinvestment Development Authority for funding projects throughout New Jersey. which fund the Casino Control Commission and the Division of Gaming Enforcement amounted to $55.4 million in 1994. When combined with the 1994 total taxes of $538.2 million, the total payments amounted to $636.1 million. The accumulation of all payments since the first casino opened was $7.27 billion as shown in Table 7.

The casino industry has had tremendous beneficial economic impact in terms of ratables for local property taxes. As shown in Table 8, casino industry property taxes paid were 71% of the total property taxes collected for school and city government budgets in 1994. The industry's tax payments also provided for 26% of the total property tax revenues received by Atlantic County.

IV. Distributions of Employees and Purchases

The economic impact of the casino industry is transmitted

through its employees and suppliers of goods and services.

Employees buy consumer goods and services where they live, and they pay property taxes. Suppliers to the casinos hire employees who buy still more goods and services. The locations of these

concentrations indicated in Tables 9 and 10. In January of 1995,

the casino employees were concentrated mostly in Atlantic County with 22.7% of them in Atlantic City as seen in Table 9.

However,

more than 4% resided in each of the counties of Camden, Cape May, Ocean, and Cumberland. Table 10 indicates that 62.51% of total purchases were from in-state suppliers, and 66.53% of the instate purchases came from businesses in Atlantic County. However, the purchases are reasonably widespread with over $197 million (14.6% of the in-state purchases) in the 13 northern counties. While 85.4% of the in-state purchases came from the eight southern counties, 18.9% came from counties other than Atlantic (85.4% less 66.5%).

Table 11 indicates the employment distribution among important groups in the population. For the first quarter of 1995, there were 18,189 full-time women employees in the casino industry, or 45.7% of the full-time workers. of the full-time employees, 44.3% (17,665) were members of minority groups.

Purchases are also widely distributed to firms owned by women and members of minority groups. Figures from the Casino Control Commission indicate that the casino industry made disbursements for goods and services of $96,481,134 to minority