American Indian tribes' casinos see turnaround
HARTFORD, Conn. (AP) — Gambling revenue at casinos run by American Indian tribes edged up slightly in 2010, reversing a first-ever drop in revenue the previous year and showing renewed strength as the economy improves, according to an annual report released Tuesday.
The study, "Casino City's Indian Gaming Industry Report," said revenue at Indian casinos was $26.7 billion in 2010, up from $26.4 billion in 2009. In contrast, revenue at commercial casinos declined 0.1 percent and the businesses are expected to soon be overtaken by Indian casinos.
Tribes' casinos made up less than 20 percent of casino gambling in 1993, but now account for nearly 44 percent, just slightly less than commercial casinos' share of 45 percent, the study said. Racinos, which combine race tracks with casinos, account for 11 percent of market share.
Indian casinos appeal to gamblers because they're newer and operate in markets with less competition, said Alan Meister, an economist at Nathan Associates Inc. and author of the report.
"They're in areas where there wasn't gaming before," he said in an interview. "It's closer to the people. It can be a day trip. It does not need to be a weekend in Vegas or Atlantic City."
Despite its turnaround in 2010, growth that year was "significantly below" pre-recession increases of 10 percent in 2006 and about 15 percent from 2002 through 2005.
The recession took a toll, with lower consumer confidence and higher unemployment cutting into casino business and restricted lending and costlier financing reducing casino development and major expansions and renovations, the study said.
As many as 239 Indian tribes operate 448 gambling businesses with gambling revenue concentrated in certain states. In 2010, California was the largest state in Indian casino gambling revenue, accounting for $6.8 billion, or more than 25 percent of revenue nationwide.
The top five states added Connecticut, Florida and Washington to California and Oklahoma, accounting for about 61 percent of revenue.
Growth in revenue was uneven across the states, varying from a 61 percent increase in Alabama to a 7 percent drop in North Carolina. Revenue rose in 19 of the 28 states where Indian-run casinos operate.
After Alabama, the fastest growing states were Texas, Alaska, Louisiana, Washington, Michigan, Mississippi and New York.
"Indian gaming could be growing faster if it were not prohibited to do so," Meister said.
For example, state legislatures often restrict gambling, such as bans on slot machines.
"There's no doubt the tribes would be better off with full slot machines," Meister said. "It's what people have come to expect."
The report also said that racinos showed strong revenue growth in 2010, posting a 5 percent increase, to $6.7 billion from $6.4 billion. Racinos operate in 12 states, accounting for just 11 percent of the casino gambling market, but up significantly from a fraction of a percent in 1993.
The report said racinos are popular because they are relatively new, face limited local competition and are popular sources of revenue for government.
The report said the near term for Indian casino gambling is promising, even as the longer outlook is uncertain due to legal challenges, legislation and regulations that restrict gambling and limit its expansion.
"Even with only a slow recovery, 2010 was certainly something positive to build on," it said.