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Myth: Gambling establishments enjoy extraordinary profitability

Pub Date: 1/1/2003
Fact: These businesses have small profit margins

A 2002 study by Bureau of Business and Economic Research at the University of Montana concluded that Montana businesses licensed for gaming only realize an 8.5 percent profit margin before income taxes. That's down from 13.8 percent in 1997 or down 38 percent in five years.

The bureau's director, Dr. Paul Polzin, has suggested that, given the inherent risk in owning and operating highly regulated businesses, entrepreneurs might well be better advised to invest in other businesses with better rates of return.


Gaming business expenses amount to over 91 percent or revenues, yielding low margins for such high-risk businesses.

Source: Special Reports II, published and distributed to 180,000 households state-wide, winter 2002 by Continental Communications, 125 W. Granite St., Suite 102, Butte, MT 59701'; Montana Business Quarterly, Autumn 2002, Gambling Economic Impact Study "Montana's Gambling Industry: An Update," Bureau of Business and Economic Research, University of Montana, www.bber.umt.edu.