Casinos paid $8.6 billion in taxes to state and local governments last year, an increase of 8.5 percent.
Employment at the casinos was down less than 1 percent, with about 332,000 people holding jobs.
The AGA's figures do not include Indian casinos, which took in $26.1 billion in 2011, the last year for which figures are available, according to the National Indian Gaming Commission. It said last year's figures will not be available until early summer.
Other states that had significant casino revenue increases included Florida, Illinois and South Dakota. Pennsylvania saw a 4.6 percent increase, and surpassed New Jersey to become the second-largest casino market in the nation after Nevada.
"Pennsylvania has been one of the great success stories of our industry in the last few years," Fahrenkopf said. "There's a price for that, and unfortunately Atlantic City has gotten hit with the price for that. If you live in Pennsylvania you no longer have to drive an hour and 15 minutes to Atlantic City to play the slots."
There were more than 853,000 slot machines in use at U.S. casinos last year, and casinos in Iowa and South Dakota derived more than 90 percent of their gambling revenue from slots last year.
Among casino table games, blackjack is the most popular, followed by roulette, poker and craps.
The report also included detailed surveys of gamblers that showed their habits and preferences.
More than 76 million Americans visited a casino last year, and about one third percent of all Americans gambled at one. Fine dining is the most popular nongambling attraction for casino patrons, while more than a quarter of all casino patrons never or rarely gamble when they visit a casino.
Playing the lottery remains the most popular form of gambling in America, with just over half of respondents saying they bought a ticket last year. Internet gambling represented only 3 percent of U.S. gambling activity.