California Gaming Recovering From Recession

The Indian gaming industry in California has bounced back strongly from the last half decade of recession and is poised to beat old records sometime in the next few years, according to a report by Alan Meister.

California’s Indian gaming industry appears to be recovering strongly after several years of stagnant growth during and after the Great Recession.

At that time, in 2007, the Golden State’s Indian gaming market was nearing $8 billion annually, compared to $12.8 billion in Nevada.

Two years ago, according to Casino City’s Indian Gaming Industry Report, the California gaming market was approaching its old numbers, with 69 casinos bringing in just short of $7 billion.

Alan Meister, who has authored the report for more than a dozen years, noted that California is potentially the engine for the entire Indian gaming industry. He provided information on nearly 30 gaming projects that are underway in the state, from new hotel towers, to expanded casinos to additional entertainment venues.

At that same time many tribes have pending applications with the Bureau of Indian Affairs to put land into trust. By their nature, such processes can take many years to bear fruit, he said.

An example of one such application that bore extraordinary fruit is the Graton Rancheria, which, after more than ten years gained the approval to build the $800 Graton Resort and Casino that opened in 2013 near San Francisco and is now considered the largest Indian casino in the state. It opened too late to be included in Meister’s report. Next year’s edition should detail just how much of a dent it has made in the state’s market, but also especially in the profits of its nearby neighbors.

Station Casinos, which operates the Graton casino, reported first quarter profits of $101 million in revenue and $57 million in cash flow. According to Credit Suisse analyst Joel Simkins, quoted by Inside Gaming, “Given an easily accessible location and deep feeder markets, Graton has put up big numbers out of the box,” making the casino one of the most profitable regional casinos ever. And that is without a hotel, although one is in the offing in the foreseeable future.

The only new casino currently going up in California is the $360 million Hollywood Casino Jamul, in San Diego County. Penn National Gaming will open this probably next year. When it opens it will bring the total number of slot machines in the state to nearly 72,000 with 2,060 gaming tables.

Meister predicts “some more positive growth in the next few years.”