Native American Gaming Industry Expansion

Over the last two decades, the Native American gaming industry has experienced phenomenal growth. According to a Business Insider article, revenues peaked at $37 billion in 2007, up from $10 billion in 1992. When compared to the current decline of around $27 billion per year, it's more than a respectable growth curve in a little more than two decades.

Native American gambling has grown faster than any other commercial industry. What's more impressive is that the growth of Indian gaming has recently outpaced that of private "commercial" casinos.

Gambling is a big deal in the U.S., which probably helps tribal casinos make money. That, and the legality of operating a casino. It's difficult to say where the Native American gaming industry would be today if the 1988 act had not been passed. When the federal government made it legal for Native American tribes to gamble, it gave them a head start on building and colonizing the gaming industry as it is today.

There is a widespread misconception that the expansion of Native American gambling poses a threat to private or state-run casinos, but revenue totals remain at only 21% of total gaming revenue. To date, Native American casinos account for only 17% of total entertainment spending in the United States, while non-Native casinos account for 43%. That means that gambling generates more revenue than all other forms of entertainment combined (sports, concerts, movies, plays, etc.).

An Overview of Indian Gaming

1832 Native Americans' Rights/Reservations

The Supreme Court of the United States upholds the right of Native American tribes to govern themselves by setting up small governments, or "legal islands." This decision served as the foundation for the first Native American gambling operation. Without this law, Native Americans would not have been able to open casinos more than a century later.

First Indian Casino/Bingo Hall in 1979

The first high-stakes bingo hall opened near Hollywood, Florida. Local police arrived and shut it down. A legal battle ensued, and the court ruled in favor of the casino, allowing the Seminoles to manage America's first legitimately tribally owned casino.

1987 Indian casinos have been approved by the United States Supreme Court.

The court ruled that because tribes are sovereign entities exempt from state laws, they can manage and operate casinos outside of their state's jurisdiction.

The Indian Gaming Regulatory Act was passed by Congress in 1988.

This act goes even further than the Supreme Court's approval the previous year. It categorizes gaming regulation into three categories: Class 1 (low-cost social gaming), Class 2 (poker rooms; "non-banked" card games; only games against other players, not the house); and Class 3 (full-on casinos, slot machines, roulette wheels, etc.). Casinos in Class 3 are not only allowed to run their businesses, but they are also allowed to work in all areas. This includes the payment of prizes, licensing, and procedures. They are the ultimate authority. Casinos were able to change quickly and avoid typical red tape because they were not subject to any federal rules.

1996 Casinos are expanding rapidly.

Indigenous tribes have been seeking the development of casinos since 1988. In 1996, there were over a hundred trips operating over 280 different casino operations across the country. The previous year's revenue totaled more than $4.5 billion.

Casino Legislation of 2006

Congress established regulatory policy and oversight of new casino approvals to protect their casinos from outside tribes. Because of the expansion of casinos, people who were once fighting for casinos are now fighting against competing tribes that have the same opportunities.

Today's Native American Gaming

There are over 560 Native American nations in the United States, with only 224 of them operating casinos. More than half of the tribes with the legal authority to seek federal approval for a casino have not done so. The primary reason a Native American tribe will not open a casino is a lack of a large enough local population to support it. Most Native American Indian nations are located in rural areas with few people living there. As the communities in these areas develop, the gambling industry may continue to expand.

A paid independent recent report called "Indian Gaming Report," available for purchase at indiangamingreport.com, features historical and trending analyses, as well as an analysis of each state and how it relates to gambling revenue. The report costs a few hundred dollars and includes data on industry segments (gaming facility statistics and income), performance metrics, comparisons, and a future outlook.

Here are some statistics from the sample pages that are available online:

• The Native American gambling industry grew by 2% in 2014, outperforming the industry's 1.2% growth in 2013.

• In 2014, 243 Native American tribes managed over 350,000 slot machines and nearly 7,800 tables in 489 casinos in 28 of the 50 United States.

• In 2014, Native American casinos accounted for 43.5% of all gambling revenue in the United States.

• Native American gaming generates $95 billion in revenue through employment, wages, and state and local taxes. The non-Native government receives $8 billion in direct revenue.

• In 2014, the top two revenue-producing states accounted for 39% of the total.

• Casino revenues increased in 20 states while decreasing in eight.

• Prior to 2014, Indian gaming revenues had increased for the previous four years.

• In the fiscal year 2014, gaming revenue reached an all-time high of $28.9 billion.

There's also a lengthy article titled The growth of the Native American gaming industry: what has the past provided, and what does the future hold, written by Schaap J. We know that change is always close as we continue to watch and measure the impact of the American Gaming Industry on America. This topic will undoubtedly be studied and followed as it evolves over time. One thing is certain: Native American casinos are not going away.

Overview of Native American Indian Casinos

With nearly 500 casinos operating across the country, there is plenty of room for expansion in the industry. The casino industry is still making a name for itself in the states that allow them. Many of the bigger and better-known Native American casinos are as big as resort hotels in Las Vegas or other casinos around the world. To serve as a sample set, here is a list of a few Native American casinos:

Bingo & Casino Potawatomi (Milwaukee, Wisconsin)

On March 7, 1997, the doors of this large downtown building opened. Potawatomi Bingo & Casino has 18 floors of hotel rooms (the 13th floor was skipped because it was deemed "unlucky"), 20 poker tables, 60 casino game tables, and over 3,000 slot machines. The Potawatomi gaming floor is one of Wisconsin's largest. The hotel also has a 2,500-person theater called "The Northern Lights Theater." Since its inception, the casino has undergone three major expansions. These improvements are evidence of the casino's success. The casino says that its growth over the past few years has led to more jobs, donations to the community, more government oversight, and a better future for the Potawatomi tribe.

Indian Bingo & Casino San Manuel (Highland, California)

In 1891, the federal government made the San Manuel Band of Serrano Mission Indians official. They opened their casino about an hour outside of downtown Los Angeles in 1986 (two years before it was federally legal). Today, the casino has 4,200 slot machines, a state-of-the-art bingo hall with 1,200 seats, table games, poker, and plenty of entertainment. The casino is still doing well and earning money. The San Manuel tribal government, like other tribes, uses casino proceeds to improve the quality of life by maintaining civil services. They've put money into local government departments like education, fire, safety, and the environment.

The Island Resort and Casino (Harris, Michigan)

The Island Resort & Casino, located just outside of Escanaba, Michigan, is another prime example of a profitable tribally run casino. The Island Casino has been in operation since the early 1980s, when it was known as the Hannahville Bingo Hall. The Island Casino has changed hands, names, and undergone massive multi-million dollar expansions in 1999, 2006, and 2011.

The Mohegan Sun (Uncasville, Connecticut)

The Mohegan Sun Casino, which recently celebrated its 20th anniversary, is a large 34-story, 1,200-room casino hotel and entertainment complex. A 55-foot water feature, shops, games, concerts, and everything else you'd expect from a successful Native American casino can be found here. For over 20 years, the Mohegan Sun has operated a profitable casino.

Foxwoods Casino Resort (Mashantucket, Connecticut)

Foxwoods is one of the most well-known Native American casinos in the United States. Foxwoods, which is owned by the Mashantucket Pequot Indian Tribe, has one of the world's largest casino gaming floors. Foxwoods, like most Native American Indian casinos, began in the mid-1980s as a small bingo hall. During the fiscal year that ended in June 2008, the casino's 6,000 slot machines generated more than $9.1 billion. Foxwoods has one of the most extensive labor unions of any casino.

Casino Viejas (Alpine, California)

Since its inception, the Viejas Casino has grown, won awards, and worked to benefit the local community. The casino has been constantly expanding and expanding; just last year, they opened their second Luxury Hotel Tower.

Hotel Jackpot Junction Casino (Morton, Minnesota)

Like other casinos, the casino offers food, entertainment, Blackjack, Bingo, and slots. Jackpot Junction follows the same format as the other hundreds of Native American Casinos.

When you examine the many Native American casinos that have been in operation since the mid-1980s, you will notice a fairly predictable pattern. Most casinos expanded or increased their maximum occupancy and donated a significant portion of their revenue to their local governments. Typically, in smaller tribes with successful casinos, casino revenue accounts for more than 90% of the tribe's income.

Government Agencies that Aid in the Supervision of Native Casinos

American Indian Affairs Committee

This is a United States Senate committee whose job is to look into the unique problems that American Indian people face, such as socioeconomic development, real estate governance, trust responsibilities, education, health care, and claims against the United States.

The Bureau of Indian Affairs

The Bureau of Indian Affairs is in charge of the administration and management of 55.7 million acres of land held in trust by the United States for Native Americans, Indian tribes, and Alaska Natives. The Bureau of Indian Affairs is in charge of 562 tribal governments in the United States that are recognized by the federal government.

National Native American Gaming Association

The National Indian Gaming Association (NIGA) is an Indian gaming group made up of tribal and industry members that does not make money. Its mission is to protect the welfare of Indian gaming tribes seeking self-sufficiency.

Indian Gaming Commission of the United States

The Indian Gaming Regulatory Act of 1988 established the NIGC as a federal agency to investigate, audit, review, and approve the three types of Indian gaming facilities.

Tribal Casinos' Morality and Social Impact

The public believes that all Native American tribes benefit from casino revenue, giving rise to the 'Rich Indian' stereotype, but the facts appear to suggest otherwise. Gambling has had little impact on the lives of most Native Americans, and while native-run gaming continues to grow, the revenue impact on most reservations has yet to be seen.

Native American Casinos clearly generate large revenues and serve as entertainment hubs, creating service jobs and satisfaction in their respective communities. That revenue is used to fund education and local government, and an increase in cash flow, jobs, and social activity can only be beneficial to a community and its residents.

Ultimately, whether you see Native American casinos as good or evil, their growth is unstoppable.