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US – California making up 25 per cent of tribal gaming’s revenues

By - 19 February 2016

Tribal Gaming in California continues to expand in employment and revenues, with California tribes representing over 25 per cent of the US total.

Steve Stallings, the newly elected chairman of the California Nations Indian Gaming Association (CNIGA), discussed the good news, as well as the challenges facing tribal government gaming in a State of the Industry report at the organization’s 21st Annual Western Indian Gaming Conference, February 9 to11, 2015 at Harrah’s Resort Southern California.

Of the 28.5m generated in 2014, revenues for California’s tribal enterprises grew by 4.9 per cent to 7.3m, over the 6.9m earned in 2013.

Mr. Stallings discussed the historic origins and accomplishments of the organisation, which passed two state ballot measures, Proposition 5, a tribal/state compact, and Proposition 1A in 2000, changing the state constitution to grant Las Vegas, casino-style gaming exclusively to tribal governments on federally recognized tribal lands.  Proposition 1A’s passage secured the original tribal state compact negotiated by then Governor Gray Davis, and 63 California tribes, after a 10-year battle with the state to win a compact.

“We can measure CNIGA’s achievements by the success of Indian gaming and the dollars generated.  Alternatively, we can measure its contribution, over the past 20 plus years, by the people whose lives have been touched for the better because of Indian gaming.  We all have success stories, and for this, we owe CNIGA members, past and present,” stated Mr. Stallings, a member of the Rincon Band of Luiseño Indians’ tribal council. “The state of our industry is best reflected in the growing strength of our governments, the health of our communities, and our ability to better protect our sovereignty.”

Mr. Stallings congratulated the tribes for keeping their promise to voters that revenues from gaming would be used to create jobs and provide government services to reservations so that tribal people would be self-sufficient.   He also noted how tribal gaming has generated real economic benefits to all Californians, from jobs for non-Indians to sharing fire and police services with neighbours. In many rural communities and small cities, the tribes are the major philanthropic donors.

According to research by Beacon Economics, hired by CNIGA to report on the benefits of tribal gaming, many lives and communities beyond tribal reservations benefitted from tribal gaming. The 2014 analysis showed that California tribal government gaming had an$8 billion annual impact and supported more than 56,000 jobs for state residents.  There were 68 tribal gaming enterprises in 2014, up by four from 2012.

“The 2014 study serves as both an update and expansion to the previous 2013 study by adding research in the areas of non-gaming operations located at tribal casinos, such as hotels, spas, golf courses and concert halls, revenue sharing with non-gaming tribes and charitable contributions.  By expanding the report, Beacon Economics was able to measure the totality of benefits generated by tribal government gaming operations,” noted Mr. Stallings.

Tribal gaming operations in California generated an estimated $8bn in economic output in 2012 – $2.9 billion of which represented earnings by California workers – and supported over 56,000 jobs statewide.  The 2012 operations had a roughly seven per cent to 7.5 percentage larger impact on California economic activity than in 2010.

Tribal gaming expenditures totalled roughly $62.8m per tribe in 2012 and consisted predominantly of advertising, administration, food and drink, and gaming expenditures.

Over half of the economic output generated by tribal gaming operations came through secondary effects, $4.2bn, indicating that tribal casinos have a substantial impact on the state economy above and beyond their own direct spending.

Tribal non-gaming operations in California generated an estimated $2.3bn in economic output in 2012, supporting over 14,800 jobs statewide, and adding $1.2bn in value to the state economy – of which $804.6 million represented income for California workers.

Tribal non-gaming operations directly employed approximately 8,200 workers statewide and supported an additional 6,600 jobs through the secondary effects, such as income spent by tribal casino employees or earnings by suppliers of tribal casinos throughout the state.

“We owe the voters of California – the people who gave us this opportunity for economic development– a report card in return for their support.  Also we are very proud of our record in strengthening our own governments, but also that we are able to contribute to the state’s economy, and participate in the well-being of our neighbours in many rural areas where jobs and many government services did not exist until tribal gaming,” Stallings said.

Looking to the future, Stallings reminded tribes of their accomplishments when presenting a united front and warned that tribes need to stay united and not blinded by their individual successes, all of which were born from a united front.

“I read somewhere the internet is today’s campfire, with a global audience. Traditional campfires served many purposes among Indian people, from a place for gathering to make important decisions, and providing for dialogue to build consensus, to teaching youth, and for entertainment.  Today’s digital campfire does much of the same, but has no censors or built in protections to protect the user from fraud and misinformation.

“As tribes, counting on gaming revenues to fund our government budgets, we cannot let yesterday’s and today’s success make us complacent, but must take risks and prepare for new markets, and changes in the games. The only way we can protect our businesses is to anticipate the future and what gaming will look like 10-20 years from now,” he explained.

“Given how fast technology changes, the digital campfire with its massive audiences, pit falls, and opportunities, is the most immediate challenge facing California tribes.  Finding skill based games that appeal to the younger markets, and diversifying our entertainment venues is one solution.  It has been estimated that California with its population of 30 million offers one of the most lucrative internet gaming markets in the US.  Online Poker, still illegal in the US, has been reported to currently have over ten million players.”

In closing, Mr. Stallings pointed to the immediate political challenges that will test the tribes. These include bills to legalize and regulate I-Poker, Daily Fantasy Sports, and sports wagering.  All three, as witnessed by the 9-year stalemate over I-Poker, will require diligence, unity and political comprises among the state’s tribal gaming enterprises and governments.  “I hope, amidst all the potential for profits and politics around internet gaming, that the consumer doesn’t get lost and that we will continue to look to gaming that rewards both the players and the host.

“My personal goal is to revitalise CNIGA.  It’s our historic home base, our tribal campfire, the place we come to stay in tune with our industry, to debate and discuss legal and legislative issues,  and to build consensus and resilience as we look to the future of tribal government gaming,” he concluded.

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