In a first for Indian casinos, revenue has fallen

By Stephen Singer
Hartford, Connecticut (AP) March 2011

For the first time, revenue has fallen at American Indian gambling casinos nationwide as the recession forced consumers to curtail spending on entertainment, according to a report issued last week.

Casinos generated about $26.4 billion in 2009, down 1 percent from 2008, according to the Indian Gaming Industry Report.

Revenue from food and beverages, lodging, entertainment and shopping declined 4 percent to $3.2 billion in 2009 in the more than 200 Indian tribes that operated nearly 450 casinos in 28 states.

The decline in Indian casino gambling was part of a larger trend, said Alan Meister, the economist who wrote the report. Gambling revenue has declined steadily from 15 percent in 2005, he said. Before the start of the recession, the sagging gambling revenue was due to public policies intended to restrict Indian gambling, such as legislation and regulations, court decisions and tribal-state agreements.

Commercial casino gambling revenue declined even more, falling 8 percent, to $27.6 billion in 2009 from $30 billion the previous year. Meister said in an interview that Indian casinos generally performed better than their commercial counterparts because Indian casino markets are newer and have room for more development, he said.

In addition, when the economy is affected by events such as the Sept. 11 attacks or rising gas prices, consumers respond by staying closer to home for entertainment, he said.

Revenue from Indian casino gambling was greatest in California in 2009, amounting to $6.9 billion. The state accounted for more than 26 percent of Indian gambling revenue nationwide. However, revenue declined in Indian casinos in California 2009 by about 5 percent.

Revenue grew the most in 2009 at Indian casinos in Alabama, Alaska, Nebraska and Wyoming, the report said. Growth was due to expanded facilities or new ones replacing others. The slowest revenue growth was in Arizona, Connecticut, Iowa and Mississippi.

The Mohegan Tribal Gaming Authority in Uncasville, Conn., reported that revenue for the Mohegan Sun Casino’s fiscal 2009 declined 7.4 percent, to $1.46 billion from the previous year. Leo Chupaska, chief financial officer of the gaming authority, said the casino was hurt not only by the recession, but also from competition from the Empire City Casino at Yonkers Raceway north of New York City.

Attendance was never down, Chupaska said. Customers instead spent less money and looked for bargains, he said.

“People thought casinos were recession proof,” he said. “Starting in 2008, we learned it’s not recession proof.”

Meister said gathering the information was difficult some tribal casinos do not report financial information fully as publicly-traded companies are required to do. In some cases, he said he got “pieces of data” rather than the bottom line. In the worst case, he had to estimate in the absence of data, he said in an interview.