Indian Gaming Hits All-Time High of $31.5BN in 2016

At the start of October, Dr. Alan Meister, CEO of Meister Economic Consulting, released the latest edition of Casino City’s Indian Gaming Industry Report covering the year 2016. According to its findings, tribal casino revenue has grown from $5.4 billion in 1995 to $31.5 billion in 2016, representing an almost six-fold increase in the market’s size.

While gaming revenue reported a 3.9% year-on-year improvement to $27.3 billion, non-gambling revenue, on the other hand, soared by 8.2% to reach a new industry high of $4.2 billion. Like their commercial counterparts, tribal casinos are gradually increasing their non-gaming amenities in order to cater to a younger audience and changing tastes, and commenting upon the latest findings, Jennifer Roberts, Associate Director of the International Center for Gaming, explained:

“In Las Vegas, our gambling revenues were declining compared to non-gambling revenues because we were diversifying so much with entertainment and non-gaming amenities. And I think you’re seeing that as well in the tribal communities.”

Indian Casino Market in 2016

According to the Casino City Report, there were 500 tribal casinos across 28 states offering 359,000 gaming machines and 7,700 table games in 2016. The combined $31.5 billion in revenue they generated subsequently completed seven straight years of growth for Indian gaming, although there continues to be a wide disparity in the performance of individual states, with 20 states reporting growth, but eight seeing their year-on-year gaming revenue decline.

Meanwhile, their combined economic impact was worth more than $105 billion in 2016. This includes providing employment for 676,000 people and paying out $36.2 billion in wages, in addition to a further $13.4 billion being paid by way of federal, state, and local taxes.

California Number 1

California is American Indian gaming’s biggest market, and in 2016 its 74 tribal casinos generated $8.4 billion in revenue, of which $956.9 million was accounted for by non-gaming products. Both the gaming and non-gaming segments, however, were subsequently higher by 6.3% from a year earlier, with their combined earnings giving California a massive 26.7% share of the overall Indian market.

There appears to have been no let up in the expansion of their non-gaming operations, either. In 2016, for instance, the Graton Resort & Casino in Northern California completed construction of a six-story hotel with 200 bedrooms, with the $175 million expansion project also including a new convention center, bars, lounges, fitness center, restaurant, and outdoor pool.

At the end of 2017, the Pechanga Resort & Casino in Southern California similarly opened the doors to its $285 million redevelopment, featuring an additional 568 rooms, bars, restaurants, a new event center, as well as a new larger spa and pool complex. Highlighting the casino resort’s increasing emphasis on non-gaming facilities, Edith Atwood, Pechanga Development Corporation President, stated:

“We are setting a higher standard of excellence and taking the resort gaming experience in Southern California and beyond to another level.”

Top 5 Tribal Markets

Indian gaming’s second biggest market is Oklahoma, whose 131 tribal facilities produced combined revenues of $4.4 billion in 2016, up by 5% year-over-year, of which non-gambling revenue saw its share of revenues spike by 14.5% to $753 million. As a result, Oklahoma’s market has returned growth for an incredible 15 consecutive years.

When combined, California and Oklahoma’s tribal casino markets account for 40.5% of all tribal revenue produced in the United States. That figure then rises to a staggering 63% for the country’s top five markets, which includes Florida ($2.6bn), Washington ($2.5bn) and Arizona ($1.9bn).

Non-Gaming Expanding

While tribal non-gaming revenue is continuing to grow, it still has a long way to go before it reaches the levels achieved by the country’s commercial casino market. In 2017, for example, Nevada derived just 42.4% of its casino revenue from gaming products versus 57.6% for non-gaming. Commenting upon the two industries’ disparity, Alan Meister explained that tribal gaming originally featured much smaller gambling products, such as bingo and card rooms, but has started to evolve significantly over the past few years. Assisting the process has been improved financing now being offered to casinos to assist them develop their non-gaming amenities in order to draw in a younger audience much less interested in just gambling.