Indian casinos narrow gap between tribal, commercial casinos

U.S. Indian casinos recorded their fifth straight annual gaming revenue increase in 2014 and further closed the gap that separates the tribal market from the commercial casino industry.

The nation’s 489 tribal-owned casinos in 28 states recorded an all-time high of $28.9 billion in gaming revenue in 2014, an increase of 1.9 percent over 2013, according to the Casino City’s annual Indian Gaming Industry Report.

The report, which is produced by Southern California economist Alan Meister, found Indian gaming revenue is highly concentrated in a handful of states. The top 10 states produced 85 percent of the overall total.

Meister said the 2014 numbers showed that Indian gaming had outpaced the growth rate of commercial casinos by roughly 2 percent. Indian gaming, he said, represents 43.5 percent of the nationwide casino gaming market while the commercial sector accounts for 44.2 percent.

“This is the closest the gap has ever been,” said Meister, who spent a year collecting the data from the previous 12-month period.

California continued to be the nation’s leading Indian gaming market with 72 casinos producing $7.3 billion in revenue, roughly one-quarter of the entire Indian gaming sector.

California’s figures included four newly opened casinos and full year of revenue from the Graton Resort and Casino near Santa Rosa, which is operated by Station Casinos.

Meister said California’s 4.4 percent increase in 2014 reflected the state’s economic rebound

“California had lagged in terms of recovery, but 2014 showed a decent amount of growth,” Meister said.

The report also accounted the increase in nongaming revenue at Indian casinos across the nation. The figure rose by 5 percent to $3.75 billion, a fraction of the gaming revenue figure, but it’s a number that continues to rise. Nongaming revenue has outpaced gaming revenue in 11 of the last 14 years.

Meister said the Indian gaming markets aren’t going to replicate Las Vegas, where revenue from retail, dining, hotel rooms and entertainment now accounts for 65 percent of the Strip’s overall figure.

“The faster growth of nongaming revenue is indicative of the importance of nongaming amenities in the evolution of Indian gaming facilities,” Meister said in the report.

In an interview, he cited the Pechanga Casino in Temecula, Calif., as an example. Last year, the property, which is north of San Diego County, broke ground on a $285 million expansion that includes 568-room hotel tower, a spa, salon, fitness center, two restaurants and 67,000-square feet of indoor and outdoor space.

“It’s entirely nongaming and this is already a very successful resort,” Meister said.

Station Casinos and the Federated Indians of the Graton Rancheria are spending $175 million to add a 200-room hotel tower and other nongaming amenities to the Graton development.

The report, which is being released Thursday through Casino City, saw no change in the ranking of the top five Indian gaming markets. Oklahoma, which has a nation’s high 126 large and small casinos, grew revenue 4.8 percent to $3.9 billion.

In Florida, where the Seminole Indian tribe owns seven of the state’s eight casinos, saw revenue increase 1.7 percent to $2.4 billion.

Florida lawmakers are currently debating legislation that would allow the Seminole tribe to add craps and roulette tables at their casinos. In exchange, the tribe has pledged to pay the state $3 billion over seven years, with the potential that the deal, which was negotiated by Gov. Rick Scott, could bring some $10 billion to Florida over its 20-year lifespan.

The Seminoles also plan to expand their Hard Rock casino-resorts near Tampa and Fort Lauderdale.

Contact reporter Howard Stutz at hstutz@reviewjournal.com or 702-477-3871. Find @howardstutz on Twitter.

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