Indian Gaming Revenues Showing Signs of Recovery

Aliese M. McArthur, Thaddieus W. Conner, William A. Taggart

Abstract


This research note continues our investigation into the connection between Indian gaming revenues and the economic climate by providing an update on the current condition of Indian gaming in several states including New Mexico, California, Arizona, Connecticut and Oklahoma, all of which were subjects of previous notes. Our research notes have shown that the Indian gaming industry, while previously considered recession-resistant, is, in fact, susceptible to fluctuations in the economy (Conner and Taggart 2009a, 2009b, 2010; McArthur, Conner, and Taggart 2011). Following the collapse of the American housing finance market in 2007, Indian gaming revenues in Connecticut, New Mexico and Arizona showed significant revenues losses.

Further investigation revealed that some Indian tribes were utilizing defensive business strategies to offset, at least to some extent, the effects of the recession on gaming revenues (Conner and Taggart 2009; 2010). The two main strategies observed were decreasing the number of casino employees and increasing the number of slot machines on the floor, which are both more lucrative than table games and less costly, as they do not require labor for operation. Specifically in California, where information on tribal revenues was unavailable, a non-trivial increase in slot machines was observed, indicating that difficult times were being experienced by Indian gaming nations from coast to coast (Conner and Taggart 2010b). Oklahoma was the only state analyzed in past notes where revenues did not show significant changes in correlation with the recession (Conner and Taggart 2010a). We concluded that this is likely due to the relatively recent introduction of Class III gaming in the state, which is still realizing its revenue potential.


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References


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