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Consultant: Arizona Tribal Casinos Made Over $1 Billion Last Year

"The estimate: total gross revenue close to $1 billion last year.

"The study by Ken Adams, former gaming executive, is the first-ever detailed snapshot of the concealed economy of chance that has become Arizona's biggest growth industry.

"…Adams' study says that a casino's revenue is directly tied to its proximity to an affluent city.

"…The state's most lucrative gambling resort is Casino Arizona, an unbeatable location bordering the east side of Scottsdale and astride two major freeways. It enjoys an annual gross revenue put at $127 million.

"On the other end of the spectrum is the Golden Hasan casino outside the played-out copper town of Ajo. The Tohono O'odham Nation makes $3.3 million each year from this casino, which would barely cover the costs of building a single elementary school.

"…According to Adams' numbers, which he called `conservative,' the combined revenue from all 22 legal Indian casinos in Arizona amounted to $974.8 million last year.

"…`Obviously, the tribes don't want to talk about the kind of money they make,' said Jim Bohannon, business manager for the Yavapai-Prescott Tribe. `They have always been very protective. They feel it is their business, not anybody else's.'

"…Adams arrived at these figures using three critical components in his formula: the number and income level of nearby residents; the number of slot machines in the casino; and the `win per unit,' or daily profitability, of each machine.

"…But one thing about Arizona casinos can't be known: the tribe's actual take-home profits. Charting profit margins of individual casinos is nearly impossible, Adams said.

"…But I. Nelson Rose, a professor at Whittier College of Law and an expert about the gaming business, said that profit margins in Indian casinos tend to be dragged down by a factor he called `overemployment.' Because of the heavy emphasis on job creation in the Indian gaming world, tribal members are frequently given tasks that wouldn't fit into an ordinary business model, Rose said.

"…The head of the Arizona Indian Gaming Association, David LaSarte, cautioned that Adams' revenue projections must not be mistaken for what tribes are actually earning.

"…Indian tribal councils, who are bound by law to run casinos as government operations, may keep their books secret from virtually everybody but themselves under the provisions of the landmark 1988 Indian Gaming Regulatory Act…"

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