Tribal casinos continue growth in 2007

By Erica Werner
Washington, D.C. (AP) 6-08

Revenue at the nation’s Indian casinos grew about 5 percent in 2007, significantly slower than in years past but still outpacing the growth rate at Nevada casinos amid a sluggish economy.

Figures from the National Indian Gaming Commission released June 18 show that Indian casinos took in about $26 billion in gambling revenue in 2007, up from $24.9 billion in 2006.

Nevada casinos took in $12.85 billion in gambling revenue last year, up 1.8 percent from the year before.

“The continued growth is significant considering recent economic struggles throughout the country,” said commission Chairman Philip Hogen. “Indian gaming continues to be an important factor in local economies.”

The nearly 5 percent increase in 2007 marked the first time in more than a decade that tribal gambling did not enjoy double-digit growth from one year to the next.

The industry’s growth has been explosive since Congress created the legal framework for it in 1988 with passage of the Indian Gaming Regulatory Act. The law lets Indian tribes, with the consent of a state’s governor, run slot machines and other profitable games on their reservations not allowed elsewhere in the state.

The year it passed the industry’s revenue was just about $200 million; it stood at $11 billion by 2000.

The soft economy is one factor in the slower growth in 2007. Also, fewer big casinos came online than in years past, when huge casinos seemed to spring up overnight in California and elsewhere. Many of the tribes that have the ability to build casinos with Nevada-style games have already done so.

There are now 423 Indian gambling operations in the country, operated by 225 tribes in 28 states, according to the industry trade group, the National Indian Gaming Association. These include scores of smaller bingo halls in addition to big casinos with slot machines.

The report from the commission, the small federal agency charged with regulating the industry, drew on audits of 382 casinos and other gambling operations. Some of the smaller ones had not reported but officials did not expect much change in the overall total.

Growth was fastest in the area of the country that the National Indian Gaming Commission calls Region V – Kansas, Oklahoma and Texas. That region had 20 percent growth from $2.1 billion in 2006 to $2.6 billion in 2007. The increase was largely due to growth in Oklahoma, which approved Nevada-style games at Indian casinos several years ago that are continuing to expand.

Region II, consisting of California and northern Nevada, saw only 1.6 percent growth, but still recorded the highest revenue of NIGC’s six regions. Indian casino revenue in the region grew from $7.7 billion in 2006 to $7.8 billion in 2007.

The tribes aren’t required to report their profits, and most don’t disclose that information, so it’s not possible to know the tribes’ net income.

NIGC officials expect to see more strength in next year’s revenue report, because Florida recently approved Nevada-style tribal gambling, and California voters approved a major expansion of Indian gambling in their state earlier this year that’s not reflected in Wednesday’s report.

There are unknowns that could affect the future of Indian gambling over the longer term. Although experts believe there’s still room for growth in the industry, it’s not infinite. Also, at some point there could be action by Congress, which periodically mulls more stringent regulations on Indian casinos, though the Democrats now in control don’t seem interested in that.

Tourists may also be increasingly attracted to casinos in the booming Chinese territory of Macau, which took in $10.3 billion in gambling revenue in 2007.

 

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