Oregon’s Indian gaming industry, which features the Spirit Mountain Casino in Grand Ronde as one of its centerpieces, fell prey to a national trend of slow to no growth in 2008, according to economist Alan Meister, who recently released his annual Indian Gaming Industry Report for the year.

No new tribes entered the gaming business and existing players opened no new facilities in Oregon during the year, according to the the study, commissioned by Nathan Associates Inc. and published by the Casino City Press.

It said Oregon’s Indian gaming industry experienced a 1.2 percent decline in revenue last year to $507.4 million. That placed the state at No. 24 among the 31 listed with Indian gaming facilities.

Participating Oregon tribes are the Confederated Tribes of Grand Ronde, the Confederated Tribes of the Coos, Lower Umpqua & Siuslaw Indians, the Coquille Indian Tribe, the Cow Creek Band of Umpqua Tribe of Indians, the Confederated Tribes of the Umatilla Indian Reservation, the Klamath Tribes and the Confederated Tribes of Warm Springs.

Oregon tribes do not release individual revenue figures, but do contribute a percentage of net gaming revenue, after expenses, to a community benefit fund.

The percentage ranges from 5 to 6 percent. The funds are distributed to nonprofit organizations, including local governments.
The Spirit Mountain Community Fund, the philanthropic arm of the Confederated Tribes of Grand Ronde, donates about $5 million a year to local programs and services benefiting “citizens striving for self-sufficiency.”

Meister said that since the passage of the Indian Gaming Regulatory Act in 1988, many tribes have enjoyed success with gaming. However, he said the level of that success has varied greatly, based on timing, access, competition, market population, scope, location and regulatory environment, among other factors.

Amid the worst economic crisis in the U.S. since the Great Depression, many sectors of the economy have been hit hard. Meister said that includes the gaming industry, once thought to be recession-proof.

In 2008, many casinos reported declining visitor traffic and spending per visit, resulting in declining revenue, the delaying or downsizing of casino development projects and, in some cases, employee layoffs and furloughs. While some have been hurt less than others, the pain has been felt in most markets across the country, even the national leaders in California and Oklahoma.

Last year, Indian gaming experienced the slowest growth in its history. Nevertheless, it still managed to post positive year-over-year growth overall.

Meister, who recently left the Analysis Group to join Nathan Associates, calculated total Indian gaming revenue nationally at $26.8 billion, up 1.5 percent increase from the previous year’s $26.4 billion. He said Indian casinos also generated $3.2 billion in non-gaming revenue, up 3 percent.

This slowdown is part of a larger trend, Meister said. Annual growth in Indian gaming revenue declined from 20 percent in 2001, to 15 percent from 2002 through 2005, to 10 percent in 2006 and to 5 percent in 2007.

However, he said the especially slow growth of 2007 and 2008 can be attributed, at least in part, to the slowdown in the national economy.

There has been and continues to be a great disparity in the performance of Indian gaming across states, tribes, and facilities. In part, this is because Indian gaming is geographically dispersed across the country and market conditions vary widely, he said.

Indian gaming is also very fragmented. In calendar year 2008, there were 442 gaming facilities operated by 237 tribes in 28 states.

California led in revenue at $7.3 billion, accounting for 27 percent of the national total. No. 2 Oklahoma accounted for another 11 percent.

The next tier of states, consisting of Connecticut, Arizona and Florida, contributed 23 percent. That means casinos in the top five states generated 61 percent of the industry’s total revenue.

Including their non-gaming operations, Indian casinos generated more than $30 billion in revenue last year. They employed about 352,000 workers earning almost $12 billion.

Indian gaming also stimulated output, created jobs, and provided wages outside of Indian gaming facilities and tribal reservations. This economic activity generated substantial volumes of tax revenue and other direct payments to federal, state, and local governments.

Meister estimates Indian gaming was directly or indirectly responsible for $84.9 billion in revenue, 712,000 jobs, $27 billion in wages, almost $11 billion in tax payments and about $1.6 billion in other direct government payments. And he said its outlook remains positive, despite short-term uncertainty due to the state of the economy.