Michigan State University Extension
Tourism Educational Materials - 33801221
06/06/02
Minnesota Casino Gambling and Discretionary Income Shifts: Preliminary Results
List of files and visuals associated with this text.
Source: Minnesota
Format: Full Text
Author: Barbara A. Koth, Associate Professor
Tourism Center, Minnesota Extension Service
248E Classroom Office Building
University of Minnesota
St. Paul, MN 55108
(612) 625-4751
Year: February 1998
"Archived Document: This Extension Bulletin is no longer
available from the publishing State and may contain
outdated information."
BACKGROUND:
The Tourism Center purchased four questions on the 1992
Minnesota State Survey of adult "Minnesota residents"
conducted October through December by the Minnesota Center
for Survey Research, University of Minnesota. The
questions dealt with frequency of casino gambling, whether
gamblers stayed overnight, shifting discretionary spending
for various expenditure categories, and income changes. A
seventy-one percent response rate was achieved in a random
sample of households; 805 telephone interviews were
completed. The sampling error is + 3.5 percentage points,
and the sample is considered generalizable to the entire
state. The gambling questions are considered to be part of
a preliminary investigation; there are limitations due to
the personal sensitivity of the subject, rapid changes in
the gambling industry, and recall bias.
HOW MANY MINNESOTANS GAMBLE?
Fifty percent of Minnesotans sampled reported visiting a
gambling casino somewhere in last two years (405 persons);
forty-five percent had specifically visited a Minnesota
casino in the last year. This latter figure compares with
a 1992 CURA (Center for Urban and Regional Affairs, UM)
report that showed 21 percent of Minnesotans participated
in casino gambling on an Indian reservation. The portion
of residents who engage in casino gambling thus has
doubled in the last year.
ARE GAMBLERS DIFFERENT FROM NON-GAMBLERS?
Statistical runs were done comparing social descriptor and
demographic variables such as residence (metro/greater
MN), gender, age, education, income, marital and work
status for gamblers and non-gamblers. The only
statistically significant difference found was that
gamblers were less likely to have children (60 percent had
no children under 18 years of age living at home);
fifty-two percent of the gamblers reported no children in
the household. Further data analysis did not indicate any
other statistically significant differences between the
groups. In other words, gamblers and non-gamblers were no
different. Note that those who had not gambled at a casino
in the last two years were now dropped from any further
analysis; the following statistics refer only to the 405
individuals with a "history" of some casino gambling.
HOW OFTEN HAD RESIDENTS VISITED MN CASINOS IN THE LAST
YEAR?
Figure 1.(Vis. 1) displays frequency of visits to
Minnesota casinos in the last year. The number of visits
ranges from 0 - 120 (i.e. every third day). When valid
cases are considered, the average number of visits is
three. However, one is the number of visits most often
reported, and the number at which half the respondents
fall above and half fall below (median), suggesting the
frequency distribution is skewed to the left with many
casual recreational gamblers. This is in fact confirmed by
the following statistics:
* Ten percent did not visit MN casinos in the last
year, but did visit once in the previous two years.
* Sixty percent visited once or twice in the last
twelve months ("light" gamblers).
* One quarter visited 3-8 times ("moderate" gamblers).
* Six percent visited 10 or more times ("heavy"
gamblers).
Such a distribution could be interpreted to mean that at
present there is a significant amount of "sampling
behavior," where residents visit a casino "to see what
it's like" but do not continue to gamble regularly.
Alternatively, we do not know if increasing frequency of
visitation (last year CURA report vs. this study),
translates to regular gambling. Again, the lack of
established patterns and lack of maturity in the industry
make interpretation problematic.
DO MINNESOTANS STAY OVERNIGHT WHEN THEY GAMBLE AT MN
CASINOS?
At this point, the majority of Minnesotans are not
utilizing overnight accommodations when they visit an
in-state casino. Only fourteen percent of the respondents
indicated they stayed overnight on their last casino trip;
86 percent did not. Level of gambling, categorized as
light/moderate/heavy depending on how many casino trips
were taken last year, was not linked to whether or not the
respondent stayed overnight.
HOW HAVE MINNESOTA GAMBLERS CHANGED THEIR DISCRETIONARY
SPENDING?
Table 1. (Vis. T1) displays whether or not Minnesota
gamblers have made various discretionary spending choices,
and if they participated, whether spending in 1992 was
higher, the same or lower in that category as compared to
1991 expenditures. The activity with the lowest
participation (26 percent) was out-of-state casino
gambling, suggesting that most Minnesotans do not
regularly travel to Nevada, New Jersey, South Dakota or
Wisconsin among possible locales, for casino gambling, but
rather have initiated gambling behavior here in Minnesota.
Taking short non-business getaway trips occurs more
frequently than taking a primary vacation; almost
one-quarter of residents did not take a main vacation
trip.
With regard to discretionary spending:
* The activity where the highest percentage reported
spending more was Minnesota casino gambling, obviously due
in part to expanding options.
* At the other extreme, only one in five respondents
answered that they spent more on leisure and
entertainment, perhaps indicating this is where consumers
"hold the line" in recessionary times.
* Both types of travel spending (vacations and getaways)
were distributed roughly equal one-third up, one-third the
same, and one-third down.
* Almost half of the state's residents indicated they had
made comparatively stable dollar expenditures for eating
out at non-casino restaurants in the last two years.
* Forty percent reported spending less on out-of-state
casino trips, suggesting a tendency by some to "stay home"
when casino gambling options existed closer to their
residence.
One hypothesis, of course, is that discretionary spending
is dependent on whether annual household income has
increased, decreased, or held constant. When expenditure
patterns are cross-tabulated by income changes, two
spending activities leisure and entertainment, and eating
out---are shown to have a direct and statistically
significant correlation (.05 level) to income shifts. That
is, as income went up, spending in these categories
increased; when income decreased, spending in these
categories declined. The other categories did not exhibit
the same pattern.
DOES LEVEL OF GAMBLING EFFECT DISCRETIONARY SPENDING?
It is likely that how often people gamble at casinos
influences whether their discretionary spending is up,
down or constant. Sixty-nine percent of Minnesota casino
gamblers were grouped into "lighter" gamblers; those
remaining who had gambled three or more times were called
"moderate/heavier" gamblers. Analyses were conducted to
test for differences between these two groups with regards
to spending for out-of-state casino gambling, vacation and
getaway travel, eating out, and leisure/entertainment. In
each case, no statistically significant difference was
found (see graphs); the minor differences noted could have
been due to chance alone. Note, however, that there again
appears to be a trend that heavier gamblers spend less on
out-of-state casino gambling trips; interpretation is
complicated by a small sample size (n=106).
DOES PARTICIPATION IN CASINO GAMBLING EFFECT OTHER
DISCRETIONARY SPENDING PATTERNS?
Another assumption tested was that increased Minnesota
casino gambling has negatively impacted spending in other
discretionary categories. In effect, it was hypothesized
that as residents spent more on in-state casino gambling,
they spent less on visiting casinos in other states,
travel, eating out, and other leisure and entertainment.
This relationship did not hold true in any case; there was
no linkage between casino spending and other expenditure
shifts.
Interpretation Notes
Considering resource availability and time pressures, the
intent of the study was to get a "snapshot" look at
gambling and discretionary spending patterns. Study
limitations include the fact that respondents may have
biased results by giving socially appropriate answers to a
sensitive subject. Secondly, with the rapid change in the
gambling environment (e.g. new casinos, new marketing
methods such as increased availability of packages), this
information could quickly become outdated. Lastly, there
may be a recall bias in that respondents were asked to
describe behavior that occurred up to two years ago and
may have been difficult to remember. These study
limitations could be overcome by long-term, monitoring
research that might use surveys, focus group interviewing,
and self-reporting diaries to help understand complex
consumer decision-making behavior and assessment of
tradeoffs.
SUMMARY OF FINDINGS
* Percent of Minnesotans who casino gamble has increased
to 45%. Most are casual "recreational" gamblers who
visited a casino once or twice.
ISSUE: Will they continue low participation rates/"drop
out", or become more frequent gamblers with associated
discretionary spending implications?
* The vast majority of state residents do not presently
stay overnight when they visit a casino.
ISSUE: Unknown impact of expanded availability of on-site
lodging accommodations.
* Annual household income shift (up, down, same) is a
significant explanatory factor linked to level of spending
at non-casino restaurants.
ISSUE: Are shifts taking place between eating out at non-
casino vs. Casino restaurants? What factors influence
restaurant choice and frequency of eating out?
* There is some evidence that a small proportion of more
frequent gamblers in Minnesota spent less on out-of-state
casino gambling trips.
ISSUE: Determine how much revenue stays in the state due
to deferred out-of-state casino gambling trips?
(Vis. G1) Education of Non-Gamblers vs Gamblers
(Vis. G2) Income of Non-Gamblers vs Gamblers
(Vis. G3) Trips to Non-Minnesota Casinos 1992 vs 1991
(Vis. G4) Spent on Primary Vacation 1992 vs 1991
(Vis. G5) Spent on Non-Business Getaway Trips 1992 vs 1991
(Vis. G6) Eating At Non-Casino Restaurants 1992 vs 1991
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