Add this to the budget woes of the states. Their take from taxes on gambling have taken a nose dive.

Overall, tax revenue contributed by commercial casinos was down 2.2% to $5.7 billion in 2008. Revenues from gambling have been a big source of revenue for the states. From 1998 to 2008 revenues from all forms of gambling have increased 65% to $23.9 billion.

Some states are also seeing their revenues impacted by neighboring states getting in on the action. In effect, more states are competing for a piece of a shrinking pie.

It will be interesting to see how quickly this revenue source bounces back. If Americans are truly going to become bigger savers, then it might be a sickly recovery for gambling. On the other hand, will people forego new TV’s in order to indulge their gambling Jones?

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