Tribal Gaming Revenue Soars - Sunday 25th of June 2006

by Howard Stutz

Las Vegas Gaming Wire

CALIFORNIA American Indian casinos enjoyed a 15.6 percent increase in gaming revenue nationally during 2005, fueled by the ever-booming gambling market in California, according to a report authored by a Los Angeles-based economist that will be released today.

Indian gaming facilities generated almost $22.7 billion in gaming revenue in 2005, compared with $19.6 billion in 2004, said the Indian Gaming Industry Report, which was compiled by Alan Meister, an economist with the Analysis Group in Los Angeles, and published by Casino City Press.

Of the total, 31.5 percent of the nation's revenue wasgenerated by California's 57 Indian casinos, which had revenue of $7.2 billion, a 23.7 percent jump from $5.8 billion in 2004.

Twelve states with Indian casino experienced double-digit growth in revenues in 2005.

"There has been a pretty consistent pattern of growth going on over the past few years," Meister said. "It's like a perfect straight line going up. In some ways, it's pretty amazing. But it shows the resilience of the Indian gaming industry."

The report counted 420 Indian-run casinos in 30 states in 2005, operating 261,157 slot machines and 7,183 table games.

Nationwide, nongaming revenue from Indian casinos was $2.3 billion in 2005, a 17.7 percent jump from $1.9 billion in 2004. Indian gaming facilities accounted for approximately 310,000 jobs with wages of $10.5 billion.

California continues to be the nation's Indian gaming capital. The state's casinos operate 59,670 slot machines, an increase of 4 percent from 2004, and 2,099 table games, up 15.3 percent from the previous year. One small casino in northern California opened in 2005.

The $7.2 billion in revenue generated topped the Strip's $6 billion in gaming win in 2005.

Meister doesn't believe, however, the state will rival Las Vegas.

"Practically speaking, it is not likely that California Indian gaming can ever mimic Las Vegas," Meister said in the report. "Indian gaming in California is restricted from offering certain types of table games. Furthermore, due to the restriction on where Indian casinos can be located, they are not likely to achieve the cluster effect enjoyed by Las Vegas."

Meister said California Indian casinos have a built-in customer base due to the state's population of almost 34 million.

"The trick is enticing them to stay in California, at least a little more often, rather than crossing the border into Nevada," Meister said.

California is poised for continued gaming growth. Eleven additional tribes have signed compacts with the state and are in the various processes of federal, state and local approval.

Meister didn't distinguish between the nine casinos in San Diego County and the rest of the state. Most analysts believe San Diego is the state's casino capital.

"The Southern California region continues to do quite well because of the population base in Los Angeles and Orange Counties," Meister said.

Connecticut, which has just two Indian casinos Foxwoods and the Mohegan Sun had $2.3 billion in 2005, which was just a 4 percent jump over 2004. Meister said casino growth in the northeast, namely Indian casinos in New York, commercial casinos in Atlantic City, and racinos in New York, Rhode Island, and now Maine, affected the two Indian properties.

California and Connecticut generated 41.8 percent of the nation's Indian gaming revenue.

According to the report, the overall increase in Indian gaming revenue was the largest jump since 2002.

While no new states added Indian casinos in 2005, Oklahoma jumped from sixth in gaming revenue to fourth with $1.4 billion.

The state changed its gaming laws in 2005, allowing casinos to offer Las Vegas-style table games. In addition, several Oklahoma tribes opened expanded casinos while two tribes acquired racetracks that now offer slot machines.

"The full effect of Oklahoma hasn't kicked in and we may see some of that this year," Meister said.

Only four states with Indian casinos Alaska, Maine, South Carolina and Louisiana reported declines in gaming revenue.

In Louisiana, where the state's riverboat gaming industry was hurt by Gulf Coast hurricanes in August and September, Indian casinos faced similar issues.

In addition, competition from the existing riverboat casinos, Harrah's New Orleans, racinos, and within the three-casino Louisiana Indian gaming community, drove revenue down 10 percent to $331.8 million in 2005.

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