Published Tuesday, Aug. 19, 2008 | 6:51 p.m.
Updated Tuesday, Oct. 28, 2008 | 10:15 a.m.
Indian casinos nationwide generated 5 percent more gambling revenue in 2007 than the previous year in spite of an economic slowdown that began to take effect in the fourth quarter of last year, according to a report released today.
Regulatory restrictions did more to hamper revenue growth than the economic downturn, which was just getting started last year, said economist Alan Meister, author of Casino City's annual Indian Gaming Industry Report.
The biggest example is California, which accounts for 29 percent of tribal gambling revenue nationwide and has been gaining on Nevada.
After a two-year fight, four tribes in California this year won ballot measures allowing them to install up to 17,000 slot machines. Before the slowdown worsened, some of these tribes, which offer some of the region's largest and most lavish properties, were adding bingo machines in the meantime just to meet demand, Meister said.
California's tribal casinos generated $7.8 billion in gambling revenue last year versus Nevada's $12.8 billion.
Until 2007, gambling revenue from tribal casinos had grown by double digits every year since the federal government legalized tribal casinos in 1988. Tribal casinos generated gambling revenue of $26.5 billion last year.
That growth rate was still better than the nontribal casino industry, which grew by 2 percent to $32.2 billion. The commercial casino business is more mature than tribal gaming, which is still growing as tribes expand their casinos, Meister said.
Last year, both tribal casinos and nontribal casinos lost market share to racetrack casinos, which were accounted for separately in the report.
Racinos are still relatively new concepts, they face little competition in many markets and have been an easier political sell than other types of casinos because they are attached to pre-existing racetracks, where business has fallen off in recent years, Meister said.
Revenue at racinos, which have opened in several new markets including Pennsylvania, New York and Florida, grew 21 percent over the past decade. That compares with 14 percent for tribal gaming and 6 percent for commercial casinos. Revenue rose 43 percent to $5.2 billion last year.
Racinos' market share rose 2.2 percentage points to 8.2 percent while commercial casinos lost 1.9 percentage points to 50.4 percent. Tribal gaming claimed a 41.4 percent market share, down 0.3 percentage points.