US Tribal Casino Revenue Up 4% to $32.4BN in 2017

US Tribal Casino Revenue Up 4% to $32.4BN in 2017

This week, the National Indian Gaming Commission (NIGC) released its gambling revenue results for fiscal 2017, with the impressive figure showing that tribal casinos across the USA are continuing to thrive. Overall, the 494 casinos owned by 242 federally recognized tribes in the US generated $32.4 billion in revenue during the year long period, representing a 3.9% improvement compared to the $31.2 billion collected in FY 2016.

“All of Indian Country has worked very hard to maintain a flourishing and constantly growing gaming industry,” commented Chairman of the NIGC, Jonodev Chaudhuri. “The successes of Indian gaming in the 30 years since IGRA prove that the foundational principles of federal Indian law should remain at the forefront of any future public policy discussions.”

Brief History of IGRA

In 1988, the Indian Gaming Regulatory Act (IGRA) authorized and regulated gambling enterprises run by American Indian tribes on their own sovereign land. The act established 3 categories of gaming:

Class I: traditional and social games for small prizes
Class II: games of chance based on bingo
Class III: All those games not included in the other two classes, such as slots and table games.

Unlike Class I and II gaming, Class III requires the tribe to enter into a compact with the state.

7 Years of Growth

Indian casino revenues have surged by 24.1% since generating $26.1 billion in 2007. Furthermore, the period from 2010 and 2017 marks seven consecutive years of y-o-y growth for US tribal casinos, despite the period coinciding with the start of the Great Recession (Dec 2007 to Jun 2009) during which time the housing bubble burst and the country’s unemployment rate shot up to 10%.

The economic decline was also a time when individual states increasingly turned towards casino gambling as a means of making up shortfall in their budgets, and as Michigan Gaming Control Board Director Richard Kalm noted back in 2008, even “when times are bad, they (casinos) still seem to do good or okay.” This was then followed by an upsurge in commercial casino legislation being passed in many states throughout the country, and over the past decade, casino gambling has been legalized or expanded in Maryland, Massachusetts, New York, Ohio, Pennsylvania, and West Virginia.

Native American casinos weathering the storm and continuing their winning ways while all the while being subjected to increasing competition from nearby states and the states where they are located makes their overall achievements that much more impressive.

Regional Results for FY2017

In FY 2017, accounting for the lion’s share of Indian casino revenues were the 74 tribal casinos located in California and Northern Nevada (Sacramento region), which collectively generated around $9 billion, representing a 7.3% increase from the previous year. The Washington DC category (Alabama, Connecticut, Florida, Louisiana, Mississippi, North Carolina and New York) subsequently took $7.3 billion from its 37 venues, while St. Paul collected $4.6 billion, and Portland a further $3.4 billion.

Interest in Sports Betting

In the wake of PASPA being struck down by the the Supreme Court in May, Native American casinos have expressed their intention to extend their products to include sports betting. The NIGC has since made it clear that Indian tribes expect representation at the sports betting table in order to present their positions, perspectives and collective expertise on the issue, as well as “maintain regulatory and operational control over all the gaming” that takes place on their lands.

Thus far, tribal interests have been well represented in the process, and calling for a continuation of the situation, NIGC Chairman Chaudhuri, stated in a recent conference:

“Whether we are talking about sports betting or whatever is next on the horizon, we want to make the point that the success of Indian gaming, that flows from the respect of tribal sovereignty, should be kept in mind regardless of what the emerging market is that we are discussing.”

As regards sports wagering, which is classified as a Class III game, Indian tribes and the state will have to reach agreements based upon whatever compacts are currently in existence or are ultimately negotiated between themselves and the state in which they are located.