According to a new study, in the calendar year 2016, Indian gaming revenue in the U.S. increased by 3.9 percent over 2015 to set a new record of $31.5 billion, the seventh consecutive annual since the Great Recession and slightly lower than the industry’s 5.2 percent growth in 2015, due to the general slowing in the national economy. At the same time, non-gaming revenue—hotel rooms, restaurants, retail and entertainment–grew at the higher percentage rate of 8.2 percent to a record $4.2 billion, the report showed.
The annual written by California economist Meister Economic Consulting Chief Executive Officer Alan Meister compiles the annual Indian Gaming Industry Report for Casino City from revenue and statistical data from Indian gaming states. The latest report covered information from 500 tribal casinos in 28 states, six more casinos than in 2015. Altogether, the tribes offered about 359,000 gaming machines and 7,700 table games.
Meister said non-gaming amenities revenue remains small in comparison to most commercial markets. For example, non-gaming amenities provide 65 percent of Las Vegas casino’s revenue. “Tribal gaming started on a much smaller scale, maybe just bingo and card rooms. As we have watched Indian gaming expand, this is just a continuing evolution and a way for the industry to grow and become more diversified,” he said.
California continued to lead the Indian gaming market in 2016. Its 74 casinos—two more than in 2015—collected a record $8.4 billion in gaming revenue, a 6.3 percent increase. The state accounted for 27 percent of total U.S. gaming revenue. It reported $956.9 million in non-gaming revenue, up 6.3 percent from 2015, the highest total in the nation. Meister said he expects California non-gaming revenue will surpass $1 billion for 2017.
“Some Indian casino markets are at a disadvantage for locations, but there are some tribes that can emulate what has been done in the commercial casino industry,” Meister said. For example, he noted, in northern California, the Graton Resort north of San Francisco opened a 200-room hotel in 2016 and the Federated Indians of Graton Rancheria announced hotel expansion plans. Hard Rock International, Caesars Entertainment and Boyd Gaming are in partnership with three tribes on Sacramento-area casino projects valued at more than $1 billion.
In Southern California this year, the Pechanga resort in Temecula spent opened a $300 million hotel expansion, doubling capacity to almost 1,100 rooms and suites with a luxury spa, events center, tropical pool complex and restaurant. The San Manuel Casino near Los Angeles announced a $500 million project including hotel, entertainment venue, pool complex and restaurants.
Oklahoma’s casino industry placed second in the nation with $4.3 billion in gaming revenue, an increase of 5 percent. Combined with California, the two states accounted for 41 percent of the overall U.S. casino revenue total.
Florida ranked third at $2.56 billion, an increase of less than 1 percent. The state ranked 18th in revenue growth, however, with an increase of just 0.4 percent—a notable drop from the previous year’s 7.3 percent. Still, Meister said opportunities for growth include the replacement, expansion and remodeling of existing facilities, such as at Tampa’s Seminole Hard Rock Hotel & Casino, where a $700 million expansion is adding a 15-story tower, 200,000 square feet of gaming space and a 200-seat Italian restaurant. Expected to open in 2019, the expansion will offer a total of 5,000 slot machines, nearly 200 gaming tables, 800 hotel rooms, 88 suites and 6,000 parking spaces, and employ more than 4,500 people.
One continuing issue of concern to the Seminoles are card rooms, which “have continued to encroach on the banked table games offered by the Seminole Tribe, thus having a negative impact.” In addition, Amendment 3, on the November ballot, would give Florida voters exclusive rights to expand gambling. The Seminoles and Disney Worldwide are major contributors to efforts to pass the proposal because expanded casino gaming “would likely have a negative impact on the tribe, depending on the scale, scope and location of the new gaming,” Meister said.
Washington State retained its position as the fourth largest Indian gaming market in 2016 with $2.5 billion in revenue, up 56 percent over 2015. Arizona remains fifth at $1.9 billion, but that’s a drop of slightly under 1 percent, one of four Indian gaming states to report a decline in 2016. Meister noted tribal casinos in New York and Connecticut reported revenue increases—the first in five years for New York’s 12 Indian casinos, and in nine years for Connecticut’s two casinos. “Those are markets that have seen increased competition from commercial casinos in the Northeast and Indian casinos in other states,” Meister said.
The future holds a lot of uncertainty for tribal casinos, Meister said, “given the mix of economic, industry, legal, regulatory and political challenges facing Indian gaming, especially under the Trump administration.”
