Gaming revenues in the United States surged during the 2001 recession, despite lower economic activity in other businesses (AGA, 2008). During the most recent recession (20072010), however, casinos in all areas did not do as well.
What are the recession-proof investments?
A number of vital services in the home restoration and repair business are recession-proof. With annual spending on home improvements in the United States exceeding $400 billion, it is an industry with a lot of room for growth.
Here are a few good business ideas that are still in demand even during economic downturns.
Plumbing: When a plumbing issue arises at home or at work, it is simply not possible to wait until a more financially secure time to have it repaired.
Auto Repair Services: Because many individuals rely on their vehicles and trucks to commute from home to work and cannot afford to be without one, auto technicians will be in high demand throughout a downturn.
Are casinos beneficial to the economy?
Over the last two decades, casinos have grown to be a major industry in the United States. Casino gambling was only authorized in Nevada and Atlantic City, New Jersey, until the 1980s. Nearly 30 states have approved casino gambling since then.
Many states have allowed commercial casino gambling because they perceive it as a means of spurring economic development. Improved employment, increased tax revenue for state and local governments, and expansion in local retail sales are the most often acknowledged benefits. According to the National Gambling Impact Study Commission’s Final Report, increased budgetary strain on state budgets, fear of income loss to casinos in adjacent states, and a more favorable public attitude toward casino gambling have all contributed to its adoption. Furthermore, the Indian Gaming Regulatory Act of 1988 authorized Indian tribes to operate casinos on their reservations. There are currently tribal and corporate casinos in several states.
The amount of money wagered in corporate casinos in the United States is not insignificant. In the year 2000, more than $370 billion was wagered. In the United States, this equates to almost $1,300 per person. Nearly 93 percent of the sum wagered is returned to players as winners, leaving casinos with $26 billion in yearly adjusted revenue.
However, casino revenue varies widely per state. The state of Nevada has the largest market, with casinos raking in approximately $9.5 billion in adjusted gross revenue each year. Casinos in Atlantic City bring in more than $4 billion every year, while riverboat casinos in Missouri and Illinois brought in more than $1 billion and $1.8 billion in adjusted gross income, respectively, in 2001.
Although the casino industry and local governments utilize economic development to sell the idea of casino gambling to the public, the extent to which the introduction and growth of commercial casinos in a given location leads to enhanced economic development is unknown. What are some of the concerns about the claimed advantages?
During the Great Depression, did people gamble?
By 1917, reformers led by the evangelical (Protestant) Christian movement had passed state laws that had effectively abolished practically all racetracks. Slot machines, gambling houses, betting parlors, and policy games, on the other hand, thrived throughout Prohibition, just as illegal alcohol did. Prohibition of most types of alcohol was a significant reform in terms of social and health reform in America, but much of its power was undermined in the 1920s due to the passage of anti-prohibition legislation. In the 1920s, horse racing resurfaced when state governments permitted on-track betting as a popular source of state revenue, and legalized off-track betting regained appeal.
Some kinds of gambling, such as bingo, were legalized in some cities during the Great Depression to help churches and charities generate funds, but most gambling remained banned. Twenty-one states opened racetracks in the 1930s.
What should I buy before the financial crisis?
Having a strong quantity of food storage is one of the best strategies to protect your household from economic volatility. In Venezuela, prices doubled every 19 days on average. It doesn’t take long for a loaf of bread to become unattainable at that pace of inflation. According to a BBC News report,
“Venezuelans are starving. Eight out of ten people polled in the country’s annual living conditions survey (Encovi 2017) stated they were eating less because they didn’t have enough food at home. Six out of ten people claimed they went to bed hungry because they couldn’t afford to eat.”
Shelf Stable Everyday Foods
When you are unable to purchase at the grocery store as you regularly do, having a supply of short-term shelf stable goods that you use every day will help reduce the impact. This is referred to as short-term food storage because, while these items are shelf-stable, they will not last as long as long-term staples. To successfully protect against hunger, you must have both.
Canned foods, boxed mixtures, prepared entrees, cold cereal, ketchup, and other similar things are suitable for short-term food preservation. Depending on the food, packaging, and storage circumstances, these foods will last anywhere from 1 to 7 years. Here’s where you can learn more about putting together a short-term supply of everyday meals.
Food takes up a lot of room, and finding a place to store it all while yet allowing for proper organization and rotation can be difficult. Check out some of our friends’ suggestions here.
Investing in food storage is a fantastic idea. Consider the case of hyperinflation in Venezuela, where goods prices have doubled every 19 days on average. That means that a case of six #10 cans of rolled oats purchased today for $24 would cost $12,582,912 in a year…amazing, huh? Above all, you’d have that case of rolled oats on hand to feed your family when food is scarce or costs are exorbitant.
Basic Non-Food Staples
Stock up on toilet paper, feminine hygiene products, shampoo, soaps, contact solution, and other items that you use on a daily basis. What kinds of non-food goods do you buy on a regular basis? This article on personal sanitation may provide you with some ideas for products to include on your shopping list.
Medication and First Aid Supplies
Do you have a chronic medical condition that requires you to take prescription medication? You might want to discuss your options with your doctor to see if you can come up with a plan to keep a little extra cash on hand. Most insurance policies will renew after 25 days. Use the 5-day buffer to your advantage and refill as soon as you’re eligible to build up a backup supply. Your doctor may also be ready to provide you with samples to aid in the development of your supply.
What over-the-counter drugs do you take on a regular basis? Make a back-up supply of over-the-counter pain pills, allergy drugs, cold and flu cures, or whatever other medications you think your family might need. It’s also a good idea to keep a supply of vitamin supplements on hand.
Prepare to treat minor injuries without the assistance of medical personnel. Maintain a well-stocked first-aid kit with all of the necessary equipment.
Make a point of prioritizing your health. Venezuelans are suffering significantly as a result of a lack of medical treatment. Exercise on a regular basis and eat a healthy diet. Get enough rest, fresh air, and sunlight. Keep up with your medical and dental appointments, as well as the other activities that promote health and resilience.
What should you buy in advance of a recession?
Take a look at the suggestions we’ve made below.
- Protein. These dietary items are high in protein and can be stored for a long time.
What are two items that are recession-proof?
At least one of two main concepts governs recession-resistant enterprises. Both are used by some of the most stable and profitable industries.
- The given product or service is a less expensive alternative to another product or service.
- The product or service given is a necessity that cannot be avoided.
Let’s take a closer look at the two elements that make certain sectors recession-resistant.
Low-Cost Alternatives
In a circumstance when consumers must spend less moneyeither because it is difficult to obtain work, their income is stagnant, or other prices are risingconsumers will seek out low-cost alternatives to save money. This is why organizations and sectors that have a low-cost competitive edge fare better during a downturn.
Discount Stores
Only 25 equities in the S&P 500 achieved positive returns during the Great Recession of 2008, with Dollar General at the top. While there are other factors at play, Dollar General did well during this period in large part because these stores offer low-cost alternatives to core commodities like food, detergent, and basic apparel.
Low-Cost Products
Few products are as well-known as Campbell’s Soup when it comes to the ability to weather a recession on an individual level. Campbell’s Soup did well during the 2008 recession, as it has done in the previous 28 recessions in its 139-year history. Campbell’s Soup, like Dollar General, benefits from both recession-proof principles: food is a staple, and a can of soup is about as cheap as it gets.
Repair Shops and Consignment Stores
Buying new is generally not an option during a recession. Repairing an existing item or replacing it with a used one is a low-cost option to this. As a result, thrift stores, pawn shops, and repair shops are recession-resistant enterprises that typically do better during downturns. When money is tight, auto repair firms thrive because mending a big-ticket item like a car is far more realistic than buying a new one. Large resale marketplaces like Ebay offer a diverse range of things at low rates, which might satisfy a specific need or provide some relief and pleasure when circumstances are rough.
Needs
It’s simple to see why necessities create recession-proof industries. There are some things and services that are hard, or nearly impossible, to live without, even when times are tough. Businesses that meet a demand remain steady or perform better during recessions.
Food, water, and shelter are typically the first things that come to mind. Medical treatment and pharmaceuticals, hygiene goods such as soap and toothpaste, and basic services such as power and garbage pickup are all examples of necessities. Some businesses, as previously indicated, combine needs with low-cost alternatives, resulting in low-cost items that meet needs.
Medical Services
Medical services were three of the top ten best-performing equities during the 2008 crisis. This includes, for example, hospitals, pharmaceutical companies, and medical equipment makers. The necessity for medical services during a recession is obvious, as recessions increase stress and make maintaining a healthy lifestyle more difficult.
Logistics
Trucking is certainly not the first thing that springs to mind when you think of a need, but it is an important service that takes place behind the scenes. Whether it’s trucks, railcars, ships, or planes, every product that makes its way into stores or between production facilities passes via logistics. Despite the fact that demand for commodities is declining as the economy slows, logistics services remain stable.
Packaged Food and Bottled Water
Food and water are important even in the most desperate of circumstances. Consumers stock up on nonperishable food and clean water during recessions because they are worried about the future. Affordable commodities having a lengthy shelf life, such as Campbell’s Soup, and bottled water, encounter spikes in demand, especially during unpredictably occurring events. In reaction to COVID-19, bottled water sales jumped 52 percent during the initial lockdown period, while ice and water vending sales increased 10 and 30 percent, respectively, over the same period last year.
There are a few other issues to consider during the COVID-19 pandemic-induced recession. Soap and sanitizer sales have surged more than would be expected in prior recessions due to the demand for cleaning and sanitation. In reaction to health difficulties, medical services are anticipated to increase much more than usual. As a result of the closure of many public places such as restaurants and bars, sales in grocery shops and liquor stores have skyrocketed. Despite this, all of these enterprises are based on the concepts that make a sector recession-proof.
Do casinos benefit or harm local communities?
Modern casino gambling is done on a computer. The typical casino gambler sits in front of a computer screen, inserts a credit card, and enters a digital environment designed to keep them playing until they have spent all of their available funds.
Small in size “The “wins” are given out at the most psychologically effective intervals possible, but the math is unforgiving: the longer you play, the more you lose. The industry as a whole preys on those who can least afford to lose, and it makes the majority of its money from individuals who have developed a gambling addiction. According to the IAV report, a Canadian study found that the 75% of casino customers who only play infrequently contribute only 4% of casino earnings. The problem gambler is the one who keeps the casino afloat.
The payouts on slot machines differ from one state to the next. Some states have imposed a minimum requirement, such as 83 percent in Arkansas. Others, such as Georgia and California, leave it up to the casino to make that decision. Casinos are required to report their payouts in some states. In some cases, that information is kept private. However, based on the information available, it’s a safe bet that a player should anticipate to lose 10% to 15% of his or her stake during every session. The lower the cost of the game, the lower the payout: $5 per round slots pay better than penny slots.
When New Jersey authorized casinos to open in Atlantic City in 1977, proponents predicted that gaming would boost the city’s ailing economy. As promised, the casinos did create jobs. Merchants that expected foot traffic to return to Atlantic Avenue, the city’s major thoroughfare, were sadly disappointed. The money that is brought to the casinos stays there. The city’s once-premier retail strip is now lined with liquor stores and cash-for-gold shops.
Casinos have a significant impact on local property values “According to the National Association of Realtors, the answer is “unambiguously” negative. Casinos do not help local economies to recover. They feed on them as parasites. Problem gambling is twice as common in communities within 10 miles of a casino. Home foreclosure, other forms of economic difficulty, and domestic violence are all more common in such neighborhoods, which is unsurprising.
The Institute for American Values is sometimes referred to as a socially conservative organization, however this is a misnomer. Its president, David Blankenhorn, has publicly advocated same-sex marriage, and Bill Galston, a former policy consultant to Bill Clinton, chairs its board of directors. Casinos exacerbate income disparity, according to the IAV, as well as their negative impact on family stability.
Do casinos depreciate real estate?
Casinos can, and frequently do, have a negative impact on the housing prices of the communities in which they are located. Because they attract gamblers and partygoers to their resorts, some cities are experiencing challenges such as bankruptcies, crime, traffic, and congestion, all of which can have a negative impact on home values.