Sponsored Research

							    Polls, Pasties, and Policy:
The Adult Entertainment Industry in Texas
                     Dr. Bruce Kellison
      Associate Director, Bureau of Business Research
                        IC2 Institute
                University of Texas at Austin
                     October 28, 2012
           AUBER Annual Meeting, Honolulu, HI
                 www.ic2.utexas.edu/BBR
    Adult Entertainment Industry Project
Assessed the socio-economic impact of Texas’ sexually oriented
  business industry on the Texas economy;

Analyzed the impact of the Adult Entertainment Fee imposed by
  the Texas Legislature in 2007 to fund rape crisis centers;

Provided recommendations for further regulating the sexually
   oriented business industry in Texas
                     The “Perfect” Project
Policy Relevance: Funding for sexual assault services in Texas

Collaboration: BBR and Institute on Domestic Violence and Sexual Assault (UT
   Austin’s School of Social Work)

Sponsored Research: Crime Victim Services Division of the Texas Office of the
   Attorney General

Scholarly Impact: Published results in peer-reviewed journal

Topic: Really, Really Interesting!
          Background and Significance
The 2007 Legislature passed a $5 per patron “fee” on sexually
  oriented businesses that provide live nude entertainment or
  performances.
Fee revenue intended to fund sexual assault services (prevention
  programs, SANE program, rape crisis centers)
Legislation also called for an assessment of the industry about
  whether it could sustain such a fee.
Our report focused on adult cabarets with Texas Alcoholic
  Beverage Commission mixed-beverage licenses, and “all
  nude” cabarets that do not sell alcohol but permit its
  consumption.
                    Research Goals
• Review prior policy and academic studies on socio-economic
  impacts of sexually oriented businesses (SOBs)
• Review secondary-effects literature
• Assess crime rates (and types) inside clubs
• Develop estimates of employment (including dancers)
• Identify fee-affected businesses by NAICS codes
• Prepare GIS maps of business locations
• Survey SOB owners
• Estimate fee impacts
                  Fieldwork
Interviews to frame local issues surrounding
SOBs:
• Club owners and representatives
• City council members in major urban areas
• Police, vice, and sheriffs
• Texas Alcoholic Beverage Commission staff
• District Attorneys
                   Key Findings

• Total direct and indirect output reached $847 million
  for adult cabarets and book and video stores in 2007.
• Total direct and indirect taxes generated by these
  segments were $107 million (state and local).
• Total direct and indirect employment in all segments:
  9,200, including 3,100 self-employed dancers.
             Key Findings for Cabarets
• Direct earnings by dancers: $181 million (2007)
• Total direct output: $216 million (2007), of which 70% was MB
  sales.
• Total direct employment: 5000, plus 3100 dancers
• RIMS II multipliers for “food service and drinking places”
  (NAICS 722) and “sports, hobby, book and music stores”
  (NAICS 451).
             Impact of Fee on Cabarets
• Many smaller clubs and a few large ones: of the 133 clubs
  with MB licenses, 90 had MB revenues of less than $100,000
  per month in 2007, with the median club selling $61,000 per
  month in MBs.
• The $5 fee would average about 12.8% of total club revenues,
  if all clubs paid the fee, with differential effects on revenues
  depending on club size.
• Fee would generate far less revenue than was estimated by
  the Texas Comptroller, assuming full compliance ($30
  million/year, vs. $52 million).
                        Crime Data
How is exotic dancing related to sexual assault?
• Alcohol
• Women’s industry *for* men

But no direct link.

Secondary effects literature cites crime around clubs, declining
property values, but what about crime inside clubs?
                   Crime Data, con’t
Used Texas Alcoholic Beverage Commission crime data to
compare administrative and criminal violations data in bars vs.
adult clubs.

Found important differences between the clubs and bars in 10 of
23 t-test comparisons:
• Alcohol-related infractions most common type of infraction
   for both samples, but the number of sex- and drug-related
   offenses, and severity of penalties and fines, was consistently
   higher in clubs than bars.
• In contrast, the bars have much higher numbers of criminal
   violations, primarily MIPs.
                        Conclusions
Industry court challenges

Texas Comptroller has not yet released taxes collected and has
never enforced fee collection.

BBR still seen as neutral and authoritative research center (and
thankfully NOT the state’s expert on strip clubs).

Collaboration with Social Work has led directly to more
sponsored research.