Native American Indian Casinos Likely to Experience Revenue Drop

Indian Casinos Likely to Experience Revenue Drop

As far as casinos go, it is generally an accepted fact that within the United States it is the Indian casinos that do the best. Indian casinos are on sovereign land of that tribe and in addition to that they have the opportunity to operate tax free without paying anything to the government beyond revenue sharing in some circumstances. They are government-protected advantageous situations within the United States gambling market and because of that if there is one sector that is usually expected to be rocky in terms of their ability to hold on during a storm, it would be the Indian casinos.

There is no way to know for certain how most Indian casinos are doing at the moment because they are one of the few industries that as a whole is not required to report revenue figures to the government, but at the same time there are certain indirect ways to gauge how these casinos might be doing in terms of their monetary flow. One method in particular has raised some disturbing results and for that reason many analysts are now convinced that the Indian casino market has been penetrated by the recession and is now starting to show a decline in revenue figures.

That method is to simply look at the behavior of people that are regulars at Indian casinos. There are many Indian casinos in places like Nevada and California and over the course of time these Indian casinos have gathered to them a very large customer base filled with people that are willing to travel longer distances just so that they can get the beneficial treatment that Indian casinos tend to bestow on people over their American counterparts. However, the combination of the higher fuel prices (even though such prices have decreased dramatically since they hit their peak) and the current economic recession has been turning many of the people that used to visit these casinos into people that drive closer and gamble less often. There are many stories of people that used to be daily gamblers at quarter slots that are now monthly gamblers at penny slots because they have less disposable income and under that kind of pressure, even the normally rock solid finances of the Indian casinos can not hold out forever. For that reason, many analysts now predict that most Indian casinos are probably flat in revenue at best and running losses from 0.1% to 9.9% at worst.

That having been said, those figures represent revenue and not profit. Profit is a lot harder to look at, but since most Indian casinos tend to make ridiculous amounts of profit on an annual basis, chances are very good that even with declining revenues, most Indian casinos can hold profitable positions for a significant amount of time after revenues start to decline. That is the most popular theory at present and it will certainly be put to the test under current market conditions and future market trends.

July 9, 2011 by : posted in Industry and Economy No Comments