Revenue raised by Indian gaming the U.S. set another record in 2013, although the growth of the industry has significantly slowed and that year it only increased by 1 percent.
The figures come from Casino City’s annual Indian Gaming Report prepared by economist Alan Meister, who, because of the reluctance of Indian tribes to share financial information, takes a year to gather the information, which, because it is an aggregate, does not reveal data about individual tribes.
The 1 percent uptick is a ghost of the robust early growth days of Indian gaming, which reached their peak about the time of the hammer blow of the Great Recession, which began in 2007.
Nevertheless, it is the fourth straight year of growth for the industry, which has 479 casinos in 28 states. The slowing can be attributed to the maturing of the markets and increased competition in some regions, said Meister. In addition state tribal gaming compacts in some states set limits on the number of slot machines allowed.
He expects a spurt in growth will follow gaming compacts signed in California in recent years that allow for more slots. “I expect we’ll see some of those tribes start implementing those compacts. Of course, California can spur growth for the whole Indian gaming industry,” he said.
California, with about a quarter of the Indian gaming industry, produced $7 billion in revenue, with the total U.S. revenues of $28.3 billion. Currently only one casino is under construction there, the relatively modest $360 million Hollywood Casino Jamul in Southern California.
The report, because it looks at 2013, does not yet include the $800 million Graton Resort and Casino, the most expensive in the state, which opened in November 2013 near California’s Bay Area. The casino, with 3,000 slots and 144 gaming tables, had a massive opening, and reportedly took about 50 percent of the revenue away from a nearby smaller Indian casino, River Rock.
Meister is reluctant to speculate on when California will once again reach the $7.8 billion level it achieved in 2007. “It took some big hits to lose that ground,” he wrote in the report. “As things pick up, it will just be a matter of time. I think the next couple of years we’ll start to see more positive growth.”
After California comes Oklahoma, which has 124 casinos, six more than in 2012. It produced nearly $3.8 billion in gaming revenue, an increase of 1.7 percent over the previous year.
While the revenues for Indian gaming increased slightly in 2013, the amount of money that states collected from Indian gaming dropped from $127.8 million to $124.7 million in the same period. This has been attributed to the fact that many tribes are switching some of their resources from Class III to Class II games, which tribes are not required to share revenues from.
That is certainly true in Oklahoma, where gaming revenue increased by $60 million in 2013, while revenue sharing decreased by $3.1 million. In the Sooner state the percentage of Class II games increased from 34 percent to 42 percent.
Meister told the Republic: “This trend toward more Class II machines in recent years is interesting and its starting point (2009) coincides with the withdrawal of restrictive Class II gaming machine regulations that were originally proposed by the NIGC (National Indian Gaming Commission) in May 2006 and ultimately withdrawn in September 2008.”
