Indian Tribal Casinos Post Record Revenues of $28.3BN in 2014

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Thursday, March 24th, 2016 | Written by Lucy Brown

In the year 2000, the newly formed California Nations Indian Gaming Association (CNIGA) managed to get two important pieces of legislation passed and signed into law by Governor Gray Davis; Proposition 5 and Proposition 1A. These two laws made it possible for the 63 Indian tribes in California to open large luxury casinos on their federally recognized lands.

It took 10 years to get the legislation passed, as many lawmakers had concerns over the social problems that legal casinos could cause within the state. However, it’s now clear that the California Nations Indian Gaming Association and its casinos have proven to be an overwhelming success, and are having a positive impact on California rather than a negative one.

CNIGA Sponsored Annual Revenue Report

Each year, an analytical study called The Indian Gaming Industry Report is released outlining the state of Indian gaming in the USA. The most recent report produced by Principal Economist, Dr. Alan Meister, subsequently revealed that Indian casinos generated revenues of $28.9 billion in 2014, marking a 1.5% improvement over the previous year, and representing their highest amount to date.

As a result, Indian casinos accounted for 43.5% of the country’s gambling market in 2014, with commercial casinos (44.2%), and racinos (12.3%) generating the remaining revenues. In 2014, a total of 243 Indian tribes operated 489 casinos across the 28 US states, with all but eight states reporting year-over-year growth.

“Indian gaming’s growth in 2014 outpaced that in 2013, paralleling the improvement of U.S. and state economies. However, there was substantial variation in performance across states, from a high of 13% to a low of -9%,” commented Dr. Meister.

21st Annual Western Indian Gaming Conference

In February, Harrah’s Resort Southern California played host to the 21st Annual Western Indian Gaming Conference, with newly elected CNIGA chairman, Steve Stallings, sharing his key findings on some of the statistics highlighted by the report. As he explained at the conference:

“The 2014 study serves as both an update and expansion to the previous 2013 study by adding research in the areas of non-gaming operations located at tribal casinos, such as hotels, spas, golf courses and concert halls, revenue sharing with non-gaming tribes and charitable contributions.”

California 25% of Indian Gaming

From the $28.9 billion in Indian gaming revenues generated in 2014, California tribes accounted for more than 25% of the overall total, with their business rising by 4.9% compared to the previous year. Here are some other key takeaways related to California’s Indian casino industry:

– In 2012, Indian casinos added $8 billion to California’s economy.

– Across the state, Indian casinos employ 56,000 people, including people who are not Native Americans. The total salaries of employees at tribal casinos is believed to be around $2.9 billion.

– Tribes have managed to keep costs to a minimum. The total expenses of all casinos was estimated to be only $62.8 million per tribe in 2012 with costs going to advertising, operations, payouts and food and drink costs.

– Not all of the revenue and jobs from tribal casinos are related to gaming. An estimated $2.3 billion of output in 2012 came from activities other than gaming, such as the hotels and restaurants in the bar. Roughly 14,800 Californians are employed in non-gaming related positions at tribal casinos.

– The tribal casinos have brought revenues to other industries located in California. It’s estimated that real estate companies made $100 million in revenue due to tribal casinos in 2012, and that wholesalers brought in $50 million due to tribal casino purchasing that year. Even though tribal casinos have their own restaurants and bars, the statistics show that restaurants and bars surrounding casinos made roughly $35 million due to casino-goer patronage.

– Tribal casinos are giving back to their surrounding communities. In 2012, the casinos donated $36.6 million to charity, and that revenue is believed to have stimulated roughly $109.2 million in economic productivity while providing more than 1000 jobs across California.

Online Gambling A Concern

Although the California Nations Indian Gaming Association briefing was largely positive, Stallings did express worries about legislation being considered to legalize online poker, daily fantasy sports and sports betting. While he remained optimistic that regulation of these activities could be done with tribal support and cooperation, he stated that it would take considerable work to make them successful. For some time, California has been trying to unite the disparate gambling interests in the state behind online gambling legislation, but so far large differences between the parties remain concerning who should be allowed to operate online gambling sites, with card rooms and Indian tribes opposing inclusion of horse racing operators.