March 3, 2016—In the latest edition of the Indian Gaming Industry Report, Nathan Associates’ Principal Economist Dr. Alan Meister finds that on a nationwide basis the growth of Indian gaming paralleled that of U.S. and state economies in calendar year 2014, the most recent year for which data are available. Gross domestic product and per capita disposable personal income at the national level and in the vast majority of states grew at faster rates in 2014 versus 2013. Indian gaming’s 2% growth in 2014 was more than three times that in 2013.
While the growth of Indian gaming was still below its pre-recession growth rate, Indian gaming experienced its fifth consecutive year of growth in 2014. In addition, gaming revenue reached an all-time high of $28.9 billion. Non-gaming revenue grew 5% in 2014, more than double the growth rate of gaming revenue. This faster growth of non-gaming revenue was an ongoing trend as many Indian gaming facilities continued to develop non-gaming amenities to complement their gaming offerings and expand their operations.
In the aggregate, there were 243 Native American tribes operating 489 gaming facilities in 28 states. While Indian gaming grew on a nationwide basis in 2014, there was significant variation in the performance of Indian gaming across states. The growth of gaming revenue ranged from +13% in Wyoming to -9% in Idaho. Of the 28 states with Indian gaming, 20 experienced gaming revenue growth. After Wyoming, Indian gaming grew fastest in Alabama and South Dakota, with all three states experiencing double-digit growth. On the other hand, Indian gaming in eight states experienced a decline in gaming revenue. The largest declines after Idaho were in Connecticut and New York in the face of increasing competition in the northeast region.
Gaming revenue was highly concentrated among a small number of states. Indian gaming in the top 10 states generated 85% of the $28.9 billion in total nationwide gaming revenue, with Indian gaming in California alone accounting for approximately 25%. Gaming revenue was also highly concentrated among a small number of Indian gaming facilities. The top 6% of facilities accounted for approximately 40% of nationwide gaming revenue and the top 28% accounted for approximately 84%.
In comparison, other segments of the gaming industry experienced mixed results in 2014 amidst Indian gaming’s growth. The racetrack casino (“racino”) segment outpaced Indian gaming, with growth of nearly 4%. Meanwhile, the commercial casino and card room segments each declined. The traditional commercial casino segment declined approximately 2% and the card room sector declined about 6%. The drop in gaming revenue for the commercial casino segment coupled with the growth of Indian gaming brought the two segments to almost equal shares of the casino gaming sector (44.5% for the commercial casino segment and 43.5% for Indian gaming).
Indian gaming made significant economic impacts in 2014. First and foremost, Indian gaming continued to help promote tribal economic development, self-sufficiency, and strong governments. Gaming profit is used by tribes to fund government operations, develop infrastructure, support social and economic programs and services, and finance other business ventures. Indian gaming also continued to have a significant economic impact on surrounding communities and the general economy. In 2014, the impact on the U.S. economy totaled approximately $95 billion in output; 738,000 jobs; $33 billion in wages; $1.7 billion in direct revenue sharing payments by tribes to federal, state, and local governments; and $8 billion in federal, state, and local taxes on secondary economic activity stimulated by Indian gaming.
The Indian Gaming Industry Report is the most comprehensive, up-to-date study of Indian gaming available. It provides information on the number of facilities, tribes, gaming machines, and table games; gaming and non-gaming revenue; tribal revenue sharing with state and local governments; pending and approved land-in-trust applications for gaming; and the economic and fiscal contribution of Indian gaming to the U.S. economy. The study also provides detailed background and cutting edge analysis, including state-by-state market summaries; a historical review; trend analyses; comparisons of Indian gaming across states; comparisons of Indian gaming to other gaming segments, including commercial casinos, racinos, and card rooms; and a future outlook with an assessment of growth opportunities and challenges.
For over 16 years, Dr. Meister has conducted extensive research and analysis of the gaming industry, including Indian gaming. His research and analyses have been relied on in matters before the Bureau of Indian Affairs, United States Supreme Court, and the World Trade Organization. He was also previously commissioned by the National Indian Gaming Commission to independently analyze the economic effects of proposed changes in Indian gaming regulations. Dr. Meister’s work is frequently cited in the press, and his studies are a trusted resource for government and regulatory agencies, investors, and the gaming industry itself, as well as associated industries. In 2014, Dr. Meister’s annual Indian Gaming Industry Report was also cited by the U.S. Supreme Court in its decision in the Michigan v. Bay Mills Indian Community et al. case.
For more information on the report and on Nathan Associates’ Gaming and Indian Gaming practices, please contact: