Casinos: Native American Tribal Casinos - Revenues

Because tribes are sovereign governments they are not required by law to make public their revenues. Financial information on individual tribal casinos is not publicly released. Each year the NIGC announces total gaming revenue for the previous year for all tribal gaming facilities combined. It also breaks down the revenue by U.S. region and revenue class. On July 13, 2004, the NIGC released financial information showing that tribal casinos made $16.7 billion during 2003, an increase of 13.7% over

TABLE 5.1

Tribal gaming revenues by region, fiscal years 2002 and 2003
(In thousands)
	Fiscal year 2003		Fiscal year 2002		Increase	(decrease)
	Number of opertions	Gaming revenues	Number of operations	Gaming revenues	Number of opertions	Gaming revenues
Region I Alaska, Idaho, Oregon, and Washington.
Region II California, northern Nevada.
Region III Arizona, Colorado, New Mexico, and southern Nevada.
Region IV Iowa, Michigan, Minnesota, Montana, North Dakota, Nebraska, South Dakota, and Wisconsin
Region V Kansas, Oklahoma, and Texas.
Region VI Alabama, Connecticut, Florida, Louisiana, Mississippi, North Carolina and New York.
Note: Compiled from gaming operation audit reports received and entered by the National Indian Gaming Commission through June 30, 2004.
SOURCE: National Indian Gaming Commission Tribal Gaming Revenues (in Thousands) by Region, Fiscal Year 2003 and 2002, in NIGC Announces Indian Gaming Revenue for 2003, National Indian Gaming Commission, July 13, 2004, http://www.nigc.gov/nigc/documents/releases/pr_revenue_2003.jsp (accessed August 7, 2004)
Region I	43	1,439,516	47	1,230,194	−4	209,322
Region II	54	4,699,889	51	3,678,095	3	1,021,794
Region III	43	1,898,522	40	1,782,874	3	115,648
Region IV	91	3,547,360	109	3,537,227	−18	10,133
Region V	75	822,727	79	651,841	−4	170,886
Region VI	24	4,322,134	22	3,835,825	2	486,309
Totals	330	16,730,148	348	14,716,056	−18	2,014,092

2002. This revenue is broken down by region in Table 5.1 and by revenue class in Table 5.2.

As shown in Table 5.1 tribal casinos in California and northern Nevada were the most profitable, earning $4.7 billion in 2003. Because there are no tribal casinos in northern Nevada, all of this revenue is actually from California tribal casinos. Gaming tribes in California earned 28% of all tribal casino revenue. Their market share is equivalent to that reported for commercial casinos on the Las Vegas strip during 2002.

The second most profitable region of the nation for gaming tribes during 2003 was Region VI including the states of Connecticut, New York, Louisiana, Mississippi, Alabama, Florida, and North Carolina. This region was responsible for $4.3 billion in casino revenues, or 26% of total tribal revenue. Casinos operating in Connecticut are thought to be the largest source of this region's revenue.

According to the GAO, tribal gambling revenues grew from only $171 million in 1988 (when the Indian Gaming Regulatory Act was passed) to $3.8 billion in 1994. Revenues reported by the NIGC for 1995 through 2003 are shown in Figure 5.1. Over this time period tribal casino revenues increased by 207%. By contrast, revenues at commercial casinos increased by only 69%.

Tribal gaming revenues reported by the NIGC for 2003 are broken down by revenue class in Table 5.2. As shown in this table, 22% of tribal gambling operations earned revenues of less than $3 million. Forty-three operations (13% of the total number) earned $100 million or more during 2003. These forty-three facilities accounted for 64% of all tribal casino revenue. There were only twenty-eight tribal operations in this revenue class in 1999.

The Indian Gaming Regulatory Act requires that net revenues from tribal gaming be used in five specific areas:

• To fund tribal government operations or programs
• To provide for the general welfare of the tribe and its members
• To promote tribal economic development
• To donate to charitable organizations
• To help fund operations of local government agencies

According to the NIGA, only one-fourth of the gaming tribes distribute gaming revenues to individual tribe members through per capita payments. Such payments are allowed under law but must be approved by the secretary of interior. The recipients must also pay federal income tax on these payments. For example, in spring 2002 the Puyallup Tribe of Washington began issuing monthly checks of $2,000 to each member of the tribe. The funds issued to children will be held in trust by the tribe until the children reach age eighteen. The tribe operates a riverboat casino and has plans to build a large land-based casino.

The NIGA reports that tribal casinos are increasingly making money from their nongambling enterprises, such as lodging, restaurants, and entertainment. These enterprises brought in $1.8 billion in revenue during 2003, a 5.9% increase from 2002.