Report: Indian gaming revenue hits record $28.3 billion in 2013

30 March 2015
The nation’s Indian gaming industry grew revenue for the fourth consecutive year in 2013, although the less than 1 percent uptick was the lowest jump since the recession and far below the double-digit annual increases that became commonplace a decade ago.

California’s tribal gaming market — the nation’s largest Indian gaming state with 69 casinos producing $7 billion in revenue — accounted for a quarter of the nation’s total figure of $28.3 billion.

Casino City’s Indian Gaming Report, produced annually by California economist Alan Meister, was released Monday and covered the financial results from 479 tribal gaming facilities operating in 28 states. It takes Meister a year to collect the data from the previous 12-month period.

The $28.3 billion figure was a 0.5 percent increase over 2012 and a single-year record high.

Meister said the slower pace of growth was the result of several Indian gaming markets maturing and competition for casino customers increasing in various part of the country, particularly the Northwest and Midwest.

He said the compacts tribes have with many states limit the number of slot machines and table games Indian casinos can offer. California signed new compacts with several large tribes in 2007 and 2008 for increased slots and tables, but lower consumer spending kept the casinos from adding the games.

“Some of the demand from customers is coming back,” Meister said. “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.”

California’s Indian gaming market was given a kick-start at the end of 2013 when the $800 million Graton Resort & Casino opened in the Sonoma County city of Rohnert Park, roughly 48 miles north of San Francisco. The casino is owned by the Federated Indians of Graton Rancheria and was developed by Station Casinos, Inc., which is managing the resort under a seven-year contract.

Meister said the impact of Graton will be better measured when the 2014 numbers are released.

California tribes continue to expand their casinos. Most of the development is focused on increased non-gaming amenities, such as hotel towers, restaurants and other entertainment upgrades.

The only major new casino currently under construction in California is the $360 million Hollywood Casino Jamul, 20 miles east of San Diego. Penn National Gaming, Inc. is building and will operate the property for the Jamul Indian Village. The tribe signed gaming compact with California for the casino in 1999.

California saw growth in other areas. The non-gaming revenue produced by Indian casinos increased 0.5 percent to $795.8 million and the state now has 70,193 slot machines and 2,008 table games, the most in the nation for any category.

Meister said Indian tribes are focusing on adding non-gaming attractions across the nation.

“That’s a major theme throughout Indian gaming,” Meister said. “The casinos need to reach out to access new customer segments in order to compete. In every state, the vast majority of the expansion projects are in non-gaming.”

Meanwhile, Arizona passed Connecticut to become the nation’s No. 5 Indian gaming state with $1.8 billion in revenue. Arizona added one new casino — the Twin Arrows Navajo Casino Resort near Flagstaff — to give the state 23 facilities. Connecticut’s two Indian casinos saw revenue decline 6.1 percent in 2013 to $1.7 billion.

Florida, which has eight Indian casinos — seven operated by the Seminole Tribe of Florida — grew revenue 5.6 percent in 2013 to $2.3 billion to also stay ahead of Connecticut.

“Florida has had consistent growth. Connecticut has been declining for several years,” Meister said.

Oklahoma remains the nation’s No. 2 gaming state with 124 casinos, six more than the prior year, which produced almost $3.8 billion in gaming revenue, an increase of 1.7 percent over 2012. Oklahoma Indian casinos also produced $580.5 million in non-gaming revenue, a jump of 13.8 percent.

Combined, California and Oklahoma generate 38 percent of the nation’s Indian gaming revenue.

In the report, Meister said Indian gaming is growing fastest in Texas, Nebraska, North Carolina and Montana, with the state reporting double-digit increases in 2013. Meister said 17 of the 28 Indian gaming states experienced revenue increases.

The 2013 overall revenue increase was the smallest since the recession caused the only ever annual downturn in 2009. Until 2006, Indian gaming grew in a rapid double-digit pace across the U.S.

After the passage of 1988 Indian Gaming Regulatory Act, which opened up Indian lands to casinos, tribal casino revenue grew 72.3 percent in the first seven years. In the 25 years since the Act was passed, Indian gaming revenue has grown on an average of 24.4 percent a year.

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