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Canadian gaming industry matures into one of the largest entertainment industries in the country, the CGA’s Economic Impact Study finds
18 October 2011
Impact spreads: Canadian companies now technology leaders, export gaming products internationally
TORONTO, ON, October 19, 2011 – Legalized gaming has nearly tripled in size since 1995, from $6.4 billion in gaming win to about $15.1 billion (2010) according to the most recent economic impact study released by the Canadian Gaming Association. With total industry revenues of $16 billion, the industry now exceeds the combined revenues generated by magazine and book sales, social establishments, spectator sports, movie theatres and the performing arts.
The study, 2010 Economic Impact of the Canadian Gaming Industry, is an update of the economic impact assessment completed in 2008 (based on 2006 data), and reveals that gaming in Canada has become a pillar of the broader hospitality industry and a significant generator of jobs and income. Data from the study shows that the industry directly supports more than 128,000 full-time jobs and more than 283,000 jobs when indirect and induced impacts are included. It also generates $12.5 billion in labour income and $8.7 billion annually to fund government, community programs and charitable initiatives, making government and charity the largest benefactors of gaming activity profits in Canada.
"The Canadian gaming industry has a significant stake in the hospitality industry in this country," said Bill Rutsey, President and CEO of the Canadian Gaming Association. "In the past 15 years we've seen tremendous investment across Canada to turn gaming facilities into entertainment destinations, which has generated not just economic benefits for the provinces, but employment opportunities as well."
Major contributor to the Canadian economy
One of the most important elements of the gaming industry's growth since 1995 is that the majority of goods and services needed to sustain operations are now produced and/or offered in Canada. This ranges from printing and publishing to communications, business and professional services, electrical and electronic products, food and beverage, transportation, finance, insurance and real estate services as well as the construction of facilities and purchase of capital equipment.
Also substantial is the chain reaction created through the purchase of goods and services needed to sustain casino operations. When a lottery corporation needs to buy scratch lottery tickets, for example, the purchase of those tickets generates revenue for the supplier, but also for the companies that supply paper, ink and printing in order to produce the cards. The same effect is seen over the whole range of industries needed to keep gaming running.
Across the broader Canadian economy, the gaming industry's contributions total more than $31 billion in Gross Output and $14 billion in purchased goods and services. In addition, economic opportunities have been created for businesses of all sizes as a significant number of Canadian companies now export products or services internationally, largely in the field of technology.
"As a supplier to the global gaming industry, New Brunswick-based SPIELO International serves approximately 1,500 customers on five continents, and has only two local customers. That means that the majority of our revenues come from outside the province, and a significant portion comes from outside the country, adding new export dollars to the Canadian economy," said Robin Drummond, SPIELO International Vice-President and General Manager, Public Gaming.
"We're also proud to be among the largest advanced IT-sector employers in the province, providing well- paying careers to more than 450 employees at our Moncton manufacturing headquarters. In our 20-plus years of operation, we have continued to indirectly spur growth by supporting local suppliers and partners, which has created a gaming technology business cluster in our region. From SPIELO International's perspective, the gaming industry has been a major contributor to the economic health of our community."
Since the 2006 assessment the industry as a whole has experienced a modest increase, with revenues growing from $14.8 billion (2006) to $15.1 billion (2010). Recent growth has not been as rapid due to a combination of industry maturity, the state of the economy, increased competition and the restructuring of a number of provincial gaming programs, but there is still great potential for the future.
"Future growth will be tied into both the creation of new products for specific demographics and the strength of the overall economy," Rutsey said. "While this assessment points to overall stabilization, given the willingness of operators to respond to market demands and changing consumer tastes I'm confident that Canadians will continue to enjoy the full range of entertainment options that the industry can provide."
Economic benefits felt in all provinces
The gaming industry creates thousands of jobs in nearly every province and provides a valuable source of non-tax revenue for governments across Canada.
The overall picture is one of stability and profitability. Several provinces (British Columbia, Alberta, Saskatchewan, Manitoba and Prince Edward Island) experienced double-digit revenue increases. New Brunswick and Newfoundland also saw their gaming revenue increase while Ontario, Quebec and Nova Scotia saw decreases. Three provinces offering video lottery terminals (VLTs), Quebec, Nova Scotia and Prince Edward Island, have all decreased the number of locations and VLT machines in operation. Investment in the redevelopment and expansion of existing and/or new facilities were also prevalent in several provinces.
Full province-specific data is available in the study.
"As we saw in the previous assessment, provinces were waiting for signs of an economic recovery before making any moves," Rutsey added. "We're now seeing many provinces gearing up for growth with investments in new product offerings and refurbished entertainment facilities. If the coming year sees the introduction of additional provincial online gaming options then the growth rate will continue to increase."
About the Canadian Gaming Association Economic Impact Study
Between January and May 2011, HLT Advisory conducted a research assessment as a follow up to the 2006 Assessment. The research focused on measuring the annual (2010) economic impacts generated by both the operating of gaming activity (i.e. the purchase of goods and services, and labour needed to offer the gaming activity) and government and charity spending of gaming profits (all levels of government including First Nations and charities are the main benefactors of gaming profits in Canada). The main sources for revenue and operating data included published annual reports. Statistic Canada's Input-Output Model was used to run Input-Output model simulations.
About the Canadian Gaming Association
The fundamental goal of the Canadian Gaming Association is to create balance in the public dialogue about gaming in Canada.
Our members are among the largest most established gaming operators, suppliers and gaming equipment manufacturers in Canada.
Our mandate is to create a better understanding of the gaming industry through education and advocacy. Visit our website at www.canadiangaming.ca and find more about the CGA.
For further information or a full copy of the study, please contact:
Jeff Lang-Weir, (416) 849-5331
Paul Burns, Canadian Gaming Association, (416) 579-3922