Gaming Appears to Be Recession-Proof

Following the collapse of many large financial institutions, a downturn in the stock market, a massive government bailout of some of the largest banks, tight credit and soaring interest rates, no one expected 2009 to be a year of plentiful profits for Indian gaming. And it wasn’t—in fact, it was the first year in the industry’s history that revenues declined. What’s surprising is that they dropped so little.

There was a one percent decline in Indian gaming industry revenues from $26.7 billion in 2008 to $26.4 billion in 2009, according to the latest Casino City Indian Gaming Industry Report by Alan Meister, an economist with Nathan Associates Inc. It was the first dip since the Indian Gaming Regulatory Act passed in 1988. In addition to the $26.4 billion in gaming revenue, American Indian tribes generated an additional $3.2 billion in non-gaming revenue at gaming facilities, including money spent on food and beverages, lodging, entertainment and shopping. That was a four-percent decrease from $3.3 billion in 2008.

In addition to the devastating global economic downturn, Meister attributed the declines to “public policies designed to restrict the supply of Indian gaming,” including legislation, regulation, judicial decisions and state-tribal gaming pacts. Despite the declines, however, Indian gaming made a substantial impact on the U.S. economy. “Indian gaming facilities, including their non-gaming operations, directly generated approximately $28.1 billion in output and supported about 300,000 jobs and $12.3 billion in wages in calendar year 2009,” Meister said. He estimated that in 2009 Indian gaming directly and indirectly led to:

• $85.1 billion in output;
• 682,000 jobs;
• $28.0 billion in wages;
• $10.5 billion in federal, state and local tax revenue, and;
• $1.7 billion in direct payments to federal, state and local governments.

Indian gaming also continued to play a significant role in the overall gaming industry, generating 44 percent of all U.S. casino gaming revenue—that is, gaming revenue generated at Indian gaming facilities, commercial casinos and racinos. Meister said Indian gaming “may overtake the commercial casino segment in the near future.”

As of 2009, 237 tribes operated 446 gambling facilities in 28 states, meaning that less than half of the nation’s then-564 federally acknowledged tribes operated gaming facilities. (The Shinnecock Indian Nation has since received federal recognition, bringing the total number of federally acknowledged tribes to 565.)

Overall, 58 percent of Indian gaming facilities showed a decline in revenue while 39 percent had increases. The bottom third of gaming facilities generated just two percent of total nationwide 2009 revenues, while more than 61 percent of the total Indian gaming revenues was earned in five states:

• California, with 66 gaming facilities operated by 60 tribes, had revenues of $6.9 billion, 26.3 percent of total Indian gaming revenues. That number represents a decrease of five percent from 2008.
• Oklahoma helped pull up the nationwide growth rate last year and in each of the previous six years. Oklahoma had 111 gaming facilities operated by 31 tribes in 2009, with revenues of $3.1 billion, an increase of nearly seven percent from the previous year. Meister attributes Oklahoma’s steady rise in revenues to the tribes’ ability to grow their local market and attract customers from nearby states who have limited gaming options, as well as to the tribes’ strategic placement of gaming facilities near population centers and states borders, adding Class III gaming, increasing the supply of gaming and adding high-quality non-gaming amenities.
• Connecticut has only two federally recognized tribes—the Mashantucket Pequot Tribal Nation and the Mohegan Tribe—that own and operate the Foxwoods Resort Casino and Mohegan Sun, respectively, but those facilities are the two largest casinos in the nation, with combined revenues of $2.2 billion, 8.4 percent of the nationwide total, down seven percent.
• Florida’s two gaming tribes—the Seminole Tribe of Florida and the Miccosukee Tribe of Indians of Florida—operate eight gaming facilities. Total gaming revenues generated in 2009 grew about 10 percent, to approximately $2 billion.
• Washington had 23 tribes operating 32 gaming facilities; revenue in those facilities increased 11 percent, from approximately $1.7 billion in 2008 to $1.9 billion in 2009.

ICT-NIGC chartMeister noted that the 2009 decline in gaming revenue overall followed four consecutive years of slowing growth for the industry. Despite that, he sees a positive future for Indian gaming in the near term. “The economy will improve, bringing back consumer confidence, disposable income, spending on casino gambling, and financing for some future casino developments,” he said. As of December 2010, there were 27 applications pending at the Interior Department for gaming lands.

He cautions that the long-term outlook, however, is uncertain and likely depends on the direction of public policy. There are, he said, “any number of things that could negatively impact Indian gaming,” including legal challenges, legislation and more regulations aimed at restricting Indian gaming, the maturation of gaming markets and increasing competition.
Meister did not give odds on the likelihood of those things happening.


Comments are closed.

Credit Card Identification Number

This number is recorded as an additional security precaution.


American Express

4 digit, non-embossed number printed above your account number on the front of your card.


3-digit, non-embossed number printed on the signature panel on the of the card immediately following the card account number.


3-digit, non-embossed number printed on the signature panel on the back of the card.

Enter Your Log In Credentials

Send this to a friend

I thought you might find this interesting:
Gaming Appears to Be Recession-Proof

URL: https://indiancountrymedianetwork.com/news/gaming-appears-to-be-recession-proof/