The American Gaming Association (AGA) and National Indian Gaming Commission (NIGA) recently released reports on tribal gaming revenue in 2020.
Not surprisingly, both spelled out significant drops in revenue, mainly due to Covid-19. The viral outbreak caused every tribal gaming operation in the U.S. to shut down at one point, for the first time since the federal Indian Gaming Regulatory Act became law in 1988.
By December 31, 457 Native American casinos had reopened, but 13 percent remained closed. The pandemic ended nine consecutive years of increasing revenue for tribal gaming following the Great Recession.
In the AGA’s 2021 State of the States report, economic development consultant James Klas said it could have been worse for tribal enterprises. At the end of last year, he predicted gaming revenues would reach $25 billion, revising the figure upward from his previous projection of $20 billion. Even so, it was a dramatic decline of nearly 28 percent from 2019 for commercial casinos.
“Whatever you think of our public health approach to this pandemic, there’s definitely been a less severe economic impact than we initially feared,” Klas said.
The federal CARES Act, approved in March 2020, provided some relief to tribes and their casinos in the worst days of the pandemic. The law set aside $8 billion for tribes; without it, tribal casinos would have lost $17 billion to $20 billion instead of $9 billion to $12 billion, according to Klas.
From National Indian Gaming Commission, specific figures for fiscal-year 2020 showed deep financial losses for tribes, with GGR totaling $27.8 billion, down $6.7 billion or 19.5 percent compared to 2019. In the year before the pandemic, tribes reported a record-breaking $34.6 billion in revenue, said NIGC Chairman E. Sequoyah Simermeyer and Vice Chair Jeannie Hovland, who spoke at the recent Oklahoma Indian Gaming Association Conference.
Simermeyer said the 2020 decrease “was expected; the unknown was just how much of an impact Covid-19 had on Indian gaming. Nevertheless, tribes were on the forefront of creating standards, developing new safety protocols and sharing community resources. I foresee this decrease as only a temporary setback for Indian gaming.”
The GGR figure was compiled from 524 independently audited financial statements of 248 federally recognized tribes across 29 states.
“Unfortunately, due to the pandemic, all eight NIGC administrative regions reported a decrease in their gross gaming revenues,” noted Hovland. “While this was not necessarily surprising news due to the impact the pandemic has had on our communities, we’re grateful the reported decline in revenues was not more severe.”
California and Northern Nevada tribes reported the smallest revenue decreases—13.2 percent, from $9.68 billion to $8.39 billion. The Midwest including South Dakota, North Dakota, Wyoming and Montana had the biggest declines: from $376.4 million in 2019 to $238.6 million in 2020, a drop of more than 36 percent.
According to the AGA report, “This once-in-a-century cataclysm accelerated the evolution of tribal gaming, particularly with regard to sports betting.”
Simermeyer noted the pandemic also provided tribes a chance to make significant investments in public health, workforce development and economic enterprise, and in their gaming properties.
On a positive note, the continuing strength of tribal gaming is reflected by recent acquisitions of Las Vegas resorts by tribal operations. In March, the Mohegan Tribe of Connecticut opened its Mohegan Sun Casino at Virgin Hotels Las Vegas, formerly a Hard Rock property. In May, California’s San Manuel Band bought the Palms Resort for $650 million.
“These investments often resulted from action taken by the Indian gaming industry, tribal regulatory bodies, and tribal governments during this past year,” Simermeyer said. “This invaluable investment can provide hope for the industry’s strong return and an important stability for a well-regulated industry and is important to tribal communities that use Indian gaming to strengthen tribal governments and economies.”
The Mohegans also are building gaming resorts in Athens, Greece and Incheon, South Korea, and recently vied to be one of the first three integrated-resort operators in Japan.
