Wednesday, May 21, 2003
Copyright © Las Vegas Review-Journal

Indian casinos winning bigger

Study shows 11 percent increase in '02 over '01, widening edge over Nevada

American Indian casinos nationwide won $14.1 billion in 2002, handily topping the industry's total gross win in Nevada by 50 percent, a new national study released Tuesday said.

The tribal casinos' win compared to Nevada casinos' $9.4 billion total win -- which was down 0.26 percent from the year before -- and was an increase of 11 percent over the $12.7 billion generated by tribal casinos in 2001, the study by Boston-based Analysis Group Inc. said.

Despite the growing numbers for Indian casinos, experts said it was unclear whether the development poses a threat to Nevada's gaming industry.

"Indian gaming has benefited from serving local markets. People are staying home. Indian gaming is reinventing itself, so (leisure travel) trends and better offerings are creating a shift" toward Indian casinos, said Alan Meister, the Los Angeles-based manager of the Analysis Group, a national economic, financial and strategic consulting firm.

"Long-term, Nevada operators have to be concerned and need to keep Indian gaming on their radar," Meister said.

Experts said a greater concern for Nevada is the rapid growth of tribal gaming in Western states, where Indian casinos took in $5.4 billion in 2002.

American Indian casinos in California alone ended 2002 winning $3.4 billion from losing gamblers, more than one-third the take of all casinos in Nevada.

Gaming expert and University of Nevada, Las Vegas professor Bill Thompson said Nevada casino operators should be seriously concerned only about California tribal casinos.

"Otherwise, (Indian gaming) is just stimulating new gambling, and that'll help" Las Vegas, he said.

"But California will hurt Reno, Laughlin, Stateline and maybe downtown Las Vegas," Thompson said.

Those areas are particularly vulnerable because, unlike the situation on the Strip, gambling represents almost the entire entertainment package they offer visitors, he said.

In 2002, 221 tribes operated 348 gaming facilities in 30 states, the study found, compared with 214 tribes operating 339 facilities the year before.

Their 206,000 slot machines were challenging Nevada's 212,000 in number, with their 4,571 table games trailing Nevada's estimated 7,000.

Nationwide, Indian casinos passed Nevada in terms of jobs, with a total of 228,000 employees compared with 202,700.

Overall, the economic impact study estimated that Indian gaming contributed $39 billion in sales to local economies, paid $15.5 billion in wages, provided 450,000 jobs and paid $4.8 billion in taxes.

The study cited several reasons for the increase in the growth of the Indian gaming industry, including:

• The growing popularity and social acceptability of gaming as a form of entertainment.

• The reinvention of Indian casinos.

• The shift toward patrons favoring local casinos over travel.

• The higher participation rates in gaming nationwide.

Thompson cautioned that the data in the new study needs to be "taken with a grain of salt."

Much of the data for the new study comes from American Indian casinos themselves, and some is based on estimates, so the specific projections are "sketchy at best, but are probably still accurate in portraying an industry segment on the move."

Meister concurred with the assessment by Thompson, adding that Indian gaming should keep growing as gambling jurisdictions proliferate and as tribal casinos keep reinventing themselves to offer broader entertainment experiences closer to home.