Stay informed with the
NEW Casino City Times newsletter!
Gaming revenues of $5.3 billion produced by California's 56 Indian casinos in 2004 equaled the gaming win reported by resorts on the Strip during the same calendar year, according to a national study of tribal-operated gaming being released today.
California, home to 28 percent of all the revenue produced by Indian casinos in America, experienced a 13.3 percent jump in gaming revenues from $4.7 billion in 2003. The increase was largely because of five of the state's biggest gambling halls renegotiating their compacts -- agreements for gaming between a tribe and the state -- that allowed the casinos to add more slot machines.
According to the study, "Indian Gaming Industry Report," California has several possibilities to increase its Indian casino market. It's unclear, however, how many will come to fruition.
"California has the potential to grow, and there are a number of proposed gaming facilities in urban areas," said Los Angeles-based economist Alan Meister, who authored the 87-page report that is being produced by Casino City Press, a gaming information publisher of statistical data and consumer information. "Some of these proposed casinos, especially those in the urban areas, may have a difficult time becoming a reality."
According to the report, the 56 casinos in California have 58,100 slot machines and 1,820 table games. Nongaming revenue also increased 19.4 percent in 2004, with California casinos earning $609.6 million from restaurants, retail, hotel rooms and other offerings.
California casinos, especially in the northern part of the state, have taken a toll on Northern Nevada's gaming economy.
Over the past 10 months, casinos in South Lake Tahoe have seen their gaming win decrease almost 4 percent from the previous year; the gaming win at Reno casinos is down less than 1 percent over that same period. State gaming analysts contend that Northern California casinos have dramatically cut into the Northern Nevada market.
Brian Gordon, a principal with Las Vegas-based Applied Analysis, said Southern Nevada casinos aren't facing the same challenges properties in the north are facing.
"No other destination competes with Las Vegas," Gordon said. "The California facilities have introduced gaming to consumers who might not have historically participated in that activity. Northern California is a much more concentrated market that offers a comparable product than a customer can find in Reno."
Las Vegas-based Station Casinos operates an Indian casino outside Sacramento and has three others that are being developed. The company is also attempting to develop an Indian casino in Michigan.
Scott Nielson, Station Casinos' chief development officer, said there may be a point at which Indian casinos increase their nongaming offerings to further compete for customers.
"As competition grows, Indian gaming will go through an evolution," Nielson said. "The casinos are going to have to ratchet up to a new level."
In the study, Meister reports that tribal gaming revenues nationally have continued to climb year-over-year, although the rate of growth has slowed somewhat in each of the past three years.
In 2004, Meister said, Indian casinos reported gaming revenues of $19 billion, an 11.9 percent increase from $17 billion in gaming revenues in 2003. In 2002, Indian casinos won $14.9 billion.
According to the study, there were 228 tribes operating 405 Indian casinos in 30 states.
Connecticut, which has just two large Indian casinos -- the Mohegan Sun and Foxwoods -- was the second among states in total gaming revenue with $2.2 billion.
"I think we've seen a maturation of the some of the markets," Meister said. "There had been tremendous growth over the past few years, but it has slowed a bit to just a few areas, like Oklahoma (which added nine casinos in 2004). The growth nationally was significant, but it's a declining growth rate."
In February, the National Indian Gaming Association said casinos generated gaming revenues of $18.5 billion in 2004. Meister said he obtained financial information from both tribal sources and public records.
"While the growth has slowed in the large markets, the smaller markets are ripe for growth," Meister said. "They don't have a lot of facilities."
Meister said Indian casinos are being challenged by racinos -- a term given to race tracks with casino areas -- where gaming revenue grew 22.4 percent in 2004, from $2.3 billion in 2003 to $2.8 billion.
Copyright GamingWire. All rights reserved.