Subsidies

The 2007 Gross Annual Wager of The United States

The 26th installment of our annual review of the Gross Annual Wager of the United States has the distinction, dubious but revealing of underlying structural changes in how Americans gamble; it also set a record in total calendar preparation time.  There are two reasons for the tardiness.  One is expected: collecting accurate statistics for pari-mutuel betting has become progressively more difficult and is now practically impossible.  The other is an unintended consequence of the Federal Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA).  The Bush Administration law, reviled by many and the bęte noire of Barney Frank, the powerful chairman of the House Financial Services Committee, who has been trying to nullify it, robbed the domestic gambling economy’s Internet sector of all transparency.  When publicly traded companies exited the U.S. market they took reliable reporting on the market’s dimensions with them.  While it’s clear that millions of Americans (2% of U.S. adults in 2007, or 4.4 million people, according to the American Gaming Association; see Exhibit 6) continue to spend billions of dollars gambling on the Internet exactly how many billions of dollars has become impossible to determine, or even estimate with an acceptable degree of confidence.  We know, because we tried.  We’ll keep trying, but after sifting through the contradictory data that are available we decided, reluctantly, to repeat our 2006 estimate of domestic spending on Internet of $5.8 billion for 2007.  It’s probably low.

Subsidies

When Charles Erwin Wilson, “Engine Charlie”, General Motors’s former CEO, made his famous and oft mis-quoted remark (in the course of his 1953 Senate confirmation hearing for Secretary of Defense) the company and the country were in their respective spheres the strongest entities in the world.  Economically and militarily the United States was the pre-eminent power, mightier than any state in history.  Measured by revenues as a percentage of United States GDP, General Motors was its largest corporation.  It was the world’s largest employer: only Soviet state industries employed more people.  Two years into Engine Charlie’s Defense Secretary-ship GM became the first U.S. corporation to pay more than $1 billion in taxes.

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