Tribal business webinar lauds gaming income development, sees persevering with headwinds — CDC Gaming

A webinar of Indian gaming consultants touted the historic development in tribal gaming revenues and contrasted it with what’s taking place in industrial gaming and on the Las Vegas. But they see “speed bumps” because the financial system continues to sluggish and threats enhance from what tribes think about unlawful on-line gaming.

The Indian Gaming Association’s webinar this previous week mentioned a report from the National Indian Gaming Commission asserting record-breaking gaming revenues. For fiscal 12 months 2024, tribal casinos earned $43.9 billion, a $2 billion or 6% achieve over 2023.

IGA Conference Chair Victor Rocha hosted the webinar with IGA Executive Director Brian Giles. It featured Gene Johnson, vp of Victor Strategies, and Jim Klas, founder and principal of KlasRobinson Q.E.D.

“Everyone is talking about the death of Las Vegas,” Rocha mentioned. “The numbers are showing that tourism is down and people aren’t going to the Strip. But the locals casinos are doing very well. It seems to me the locals are the new normal and tribal gaming is Las Vegas locals on steroids. That seems to be the case here – you take care of your local customers. But the world is changing and the economic headwinds we’re seeing are going to change the numbers next year.”

The report lined 243 tribes and 532 gaming operations in 29 states, citing “organic growth” for essentially the most half. The development a 12 months in the past was decrease at 2.4%, which suggests double the rise in 2024.

Not all of that was natural, nevertheless, in response to Johnson. There was a 11.2% enhance within the D.C. area that covers Connecticut and Florida. The former has igaming and on-line sports activities betting and the latter cellular sports activities betting.

“You’re starting to see a slowdown in the economy and commercial gaming,” Johnson mentioned. “The topline numbers are good, but the majority of growth is coming from expansion in the commercial industry, whereas the growth in tribal gaming is coming from organic growth among existing casinos, as well as online migration.”

Johnson talked about “a whole lot of speed bumps ahead,” with GDP development slowing, buying energy weakening, and client confidence cratering.

Tariffs are elevating prices for tribal expansions and there’s growing competitors from industrial and different tribal operators, in addition to sweepstakes operators and prediction markets.

“All kinds of substitutes for igaming and sports betting are appearing in states that don’t have legal sports betting yet, and these are largely tribal gaming states,” Johnson mentioned.

Giles identified that tribes aren’t seeing something like what’s taking place in Las Vegas, the place tourism has declined to this point this 12 months and occupancy has dipped.

“No they aren’t,” Johnson mentioned, agreeing concerning the tribes. “Tourism was down 11.3% in Las Vegas in June and Canadian tourism is down the most. The American Gaming Association put out numbers through May that commercial gaming is up 7.1%, but if you look more closely at these numbers, you find there were expansions in Arkansas, Delaware, Illinois, Indiana, Nebraska, New Hampshire, and Virginia. If you take those states out of it, you’re seeing 0.66% to 0.8% growth.”

While industrial gaming income rose 7.1%, land-based casinos rose 1.9%, sports activities betting rose 13%, and igaming rose 25.9% to this point this 12 months, Johnson mentioned.

“Whether it’s igaming, sports betting, or online means of gaming, the main thing is that the tribes have an opportunity to compete on a level basis,” Klas added. “They’ve demonstrated for decades that they’re fully capable of competing effectively — putting out superior products and getting superior performance — as long as they have the opportunity to compete in the same way. Even though there’s an impact on brick-and-mortar from online, brick-and-mortar isn’t going anywhere. It’s holding its hold. It’s still going up, with rapid growth from online gaming.”

When it involves tribes, the Oklahoma City area had a 12.7% enhance forward of Washington, D.C.’s 11.2% enhance. The Portland area reported a 3.6% enhance, Sacramento 1.4%, Phoenix 1.9%, St. Paul 1.6%, Rapid City 4.2%, and Tulsa, 0.1%.

About 9% of gaming operations reported greater than $250 million of GGR in 2024 and their combination revenues made up greater than half (55%) of the full GGR. In comparability, simply over 54% of tribal gaming services reported lower than $25 million in revenues and this group represents about 5% of the full GGR share.

Looking forward, Klas, like Johnson, talked concerning the stress on client spending. He seems to be at client confidence and spending as the 2 greatest indicators for the way forward for gaming over six to 12 months.

While tariffs are a priority, it’s extra concerning the uncertainty over tariffs and what’s going to be put in place or retained, Klas mentioned.

“The only thing worse than bad news is uncertainty,” Klas mentioned. “Bad news you can adjust and adapt to. It hurts and you have to make changes, but at least you know what you’re facing. When you don’t know what you’re facing, from a corporate executive to a rank-and-file customer on the casino floor, it’s natural to assume the worst and not the best. If we could get a little more stability in the outlook that would help. I’m not confident that’s going to happen for a variety of reasons. The new normal during this administration is uncertainty over policy. That will have a depressing impact on everybody’s plans from IBM to you and me and our neighbors. I don’t want to cast a doom and gloom scenario. There are headwinds and challenges, and I don’t expect next year’s growth to be as high as this year’s growth. However, I don’t expect it to be lower than 2023. I’m confident it will be a positive number whatever it is.”

Johnson mentioned with considerations over tariffs and other people tightening their belts on spending, he doesn’t see an enormous enhance in Las Vegas tourism over the subsequent three to 6 months. Still, he stays optimistic about tribal gaming.

“I’m cautiously optimistic,” Klas agreed. “The headwinds and challenges are there, but this industry has year after year continued to show it’s flexible and resilient and knows how to survive and continue to find ways to grow.”