Impact of Tribal Gaming on The Economy

Tribal Gaming

The casino gaming industry plays a significant role in any economy. It generates a huge amount of revenue that helps the economy of a country to grow and prosper. Not just that, but it also generates dozens of job opportunities for people.

Today, in this post, we are going to discuss deeply the impact of tribal gaming on the US economy.

Casino Industry & Economy

The casino industry makes an important contributor to the state and as well as national economies. It contributes to a number of economic activities including wages, taxes, jobs, spending, and other government capital and revenue investment.

The tribal gaming sector generates about 45% of all gaming revenue in the U.S. This makes it a significant driver of economic activity.

American Gaming Association (AGA) published a detailed study of the state-by-state economic impact of casino gaming in the United States.

This is the second time that AGA has conducted such a comprehensive study on the same topic. The data released by them allows for a detailed state-by-state analysis of the impact of casino gaming on the economy.

Coming to the research, the main contributor to the study is Meister Economic Consulting. They conducted the study on behalf of AGA and measured the fiscal and economic impacts of Class II and Class III tribal gaming on the state economies and the U.S.

The study is based on tribal gaming data that was used in the 2018 Edition of the Indian Gaming Industry Report. This includes non-gaming revenue, gaming revenue, and even gaming-related revenue shared by tribes to local, state, and federal governments. The study relies on the tribal gaming data of 2016.

Tribal Gaming Industry & Growth

Tribal gaming is managed and operated by Native American tribes under federal law. Under the Indian Gaming Regulatory Act (IGRA), gaming is described as a “means of promoting tribal economic development, tribal governments, and self-sufficiency.

Tribes have always used gaming profits in accordance with IGRA to:

  • Promote the operations of tribal government operations.
  • Support tribal economic and social programs and services including education, health care, housing assistance, vocational training, public safety, elderly care, youth programs, cultural, transportation, and natural resource services.
  • Providing funds for the development of other tribal organizations.
  • Contribute to charitable causes.
  • Make payments to local governments.

Over the years, the tribal gaming industry has grown tremendously. Today, it has emerged as a significant component of the casino industry.

Since the time IGRA was passed in 1988, tribal gaming has expanded 300-fold. It has gone up from a 121 million segment, consisting of small gaming facilities and bingo halls, to a $30 billion-plus segment in 28 states that include several resort destination casinos.

Tribal gaming generates more than 44% of all gaming revenue in the casino industry. The main casino revenue states include tribal gaming: California, Louisiana, New York, Michigan, Florida, Oklahoma, and Washington. Despite all this, the tribal gaming industry is often misunderstood. This is mainly because of regulatory, legal, political, and economic complexities. Even limited available data for the public is also to be blamed.

Economic & Fiscal Impact Of Tribal Gaming

Tribal casinos are known to contribute both directly and indirectly to an array of economic activities. This include:

  • Expenditures by tribal casinos
  • Jobs at tribal casinos
  • Tribal governments
  • The tribes operating the casinos
  • Suppliers and other businesses down the supply chain
  • Taxes on economic activities
  • Wages paid to casino employees
  • Household expenditures by employees of all impacted governments and businesses
  • Payments by tribes to state, local and federal governments

Tribal gaming exists in 28 states in the US. The top five states that are impacted by the said industry in terms of jobs, output, and wages are Florida, California, Washington, Oklahoma, and Arizona.

These states remained on the top even in terms of direct payments or tax revenue. However, Arizona was replaced by Connecticut.

The impact of the tribal gaming industry varies widely from state to state. This results from the difference in the performance and number of gaming facilities. Besides, there are other contributing factors too which include types of gaming offered, market conditions, types of non-gaming amenities available, the maturity level of markets, the economy, and competition. Even management of gaming facilities, political and legal environments are also considered to be contributing factors.

The states with the largest number of tribal gaming facilities include Washington, Oklahoma, Minnesota, California, and Wisconsin.

About The Author

This research work is done by Dr. Meister, who happens to be the Principal Economist at Nathan Associates. He is an expert in the application of economic analysis to public policy, regulatory, business planning and operations, and litigation matters.

He has spent most of his life conducting various studies and analyzing economic issues related to the gaming industry. In fact, he has also analyzed the Indian gaming industry including racinos, commercial casinos, online gaming, and card rooms.

His consulting work includes market and industry analyses, feasibility analysis, economic and fiscal impact studies, evaluations of regulations, public policy analysis, and much more.

Just so you know he was previously commissioned by the National Indian Gaming Commission to analyze the economic effects of proposed regulatory changes.

He has spent years on scholarly research related to the gaming industry. Along the way, he has also published a number of writings. One of his most notable works is his annual study, the Indian Gaming Industry Report. This has been cited by the United States Supreme Court.

To date, he has presented his work at various professional, academic, and industry conferences. Not just that, but his scholarly and consulting works have also been used in different matters in the United States Supreme Court, U.S. Department of the Interior, and World Trade Organization. He is known to head the Indian Gaming consulting activities at Nathan Associates.

Conclusion

From the above study, we can conclude that the tribal gaming industry is crucial for the development of the US economy. It is one of the largest sources of revenue and job opportunities for 28 states in the country.

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