Tribal Casinos Report 20% Drop in Revenue for FY 2020
The pandemic has hit the casino industry hard. While the industry seems to be recovering in 2021, its effects can still be felt and tribal casinos are smarting. In their latest report, the National Indian Gaming Commission announced on Tuesday that results during the 2020 fiscal year were down 20% year-over-year. The results were compiled with the assistance of 248 tribes across 29 states, and the figures include data from all 524 tribal gaming operations located across the United States.
The Commission chalked the drop in revenue up to the pandemic, but assured that the industry was recovering. According to the organization, tribal gambling was well on its way to recovery already. NIGC Chairman Sequoyah Simermeyer released the data, showing that tribal casinos generated $27.8 billion in gross gaming revenue in FY 2020.
In FY 2019, tribes had collected $34.6 billion in revenue, but the number declined rapidly once the pandemic started raging throughout the country. Even the pandemic, though, didn’t hit casinos as hard as the real estate burst in 2008 when revenue hit $26.7 billion.
The gross gaming revenue is calculated by estimating for what amount is retained after money is subtracted back to pay winnings to players. In explaining the results, Simermeyer spoke about the pandemic and 2020 in detail:
“Indian gaming revenues, like many other parts of the economy, have suffered because of the COVID pandemic. The last 10 years of steady growth helped to make it clear that the significant decline in revenue for fiscal year 2020 was a result of the pandemic.”
However, the period proved to be a period for big strategic shifts with the tribes investing in public health, workforce development and achieving greater economic resilience, Simermeyer added.
There have been many pivotal developments during the pandemic, with the Mohegan Tribe becoming the first tribal operator to be represented in Nevada by taking over the Mohegan Sun Casino at Virgin Hotels Las Vegas as the official manager of the casino floor.
Another example was the deal reached between Red Rock Resorts and the San Manuel Band of Indians to buy the Palms Resort for $650 million, becoming the first tribal owner of a casino in Indiana, not just manager. Both developments, paired with workforce improvements and better healthcare in impacted communities, were significant milestones, Simermeyer explained.
“This invaluable investment can provide hope for the industry’s strong return and an important stability for a well-regulated industry and is important to tribal communities that use Indian gaming to strengthen tribal governments and economies,”She concluded
Connecticut Slots Push Tribal Casinos Result
The nadir of the pandemic has seem to have gone away and even though there has been a resurgence of new COVID-19 cases, casinos in Connecticut seem to be doing well, or at least much better. Results for the Mohegan Sun and Foxwoods Resort Casino in July have gone up after various restrictions have been eased up, allowing both destinations to welcome back patrons.
Mohegan Sun clocked in $49.9 million from slots alone in July, the sum total after paying winnings to players. This marks a 5% increase year-over-year and it’s actually the most money the casino has won from slots since August 2019, even before the pandemic hit.
On the other hand, Mashantucket Pequot Tribal Nation’s Foxwoods Casino raked in $36.5 million during the same period, a 19.6% increase year-over-year. According to Foxwoods CEO Jason Guyot these results were also $7.1 million higher month-over-month.
Mohegan Sun made sure to capitalize on the lifting of some restrictions by putting forward more promotions that resulted in more customers visiting the property in July.
Casino Corruption in Indiana Back in Focus
Lawmakers in Indiana are not convinced that corruption has been eradicated from the state’s casinos. In a letter to the Indiana Gaming Commission (IGC), the lawmakers claim that there need to be further safeguards to ensure that the state’s casino industry remains intact.
In a letter to IGC chairman Michael McMains, dated July 6, lawmakers insist for the Commission to take action or they would during the 2022 General Assembly. Should lawmakers’ pleas not be met, they will proceed with blocking the Commission’s inquiring rights into the finances of investors in privately-held casino companies.
The group of lawmakers argues that they are interested in protecting consumers and citizens and that would necessitate action from the Commission. The IGC has not commented on the issue as of yet.
Outgoing NY Governor’s Mobile Betting Bill Not Good Enough
As Gov. Andrew M. Cuomo, New York’s leader for the past several years, is reeling from a sexual allegations scandal, legislators have not shown him any mercy in matters of governance. Lawmakers bashed the outgoing governor’s proposed mobile sports betting plan.
Senators Addabbo and Pretlow, two known proponents of sports gambling in the state, have objected to an exorbitant tax rate amounting to 50% for the winnings of wagers placed from a mobile device. The proposed number is suffocating, lawmakers argue, and it’s a far cry from what was originally negotiated to be a 12% on revenue after paying out winnings, resulting in some $350 million net gain for the state.
One example of over-taxing not being a good thing is New Hampshire which is running a 51% tax and made nothing on the Super Bowl, arguably sports’ biggest event in the United States. With no revenue for the state, New Hampshire may have thought it was doing the right thing, but it was actually missing out on big money.
Another issue according to Addabbo and Pretlow is that the current process for applying is challenging insofar it asks interested operators to jump way too many regulatory hoops with the New York State Gaming Commission.
Clearly, in Cuomo’s wake, there will be some rough edges to iron out. Without his pushback, it may just prove a little easier to do so and get the NY mobile sports betting industry on the right track.