Many Indian tribes have creates substantial businesses by building casinos on their land. The income from these operations is largely exempt from taxes.
The casino business has been hit hard by the recession, especially in Las Vegas. This has caused many of the largest gaming companies to open operations in Macau where the traffic from Asian customers is still strong. Indian casinos have not attempted to move outside the US and that makes them captive to the difficulties in the American economy.
A new report from the Casino City Press shows that the growth rate at Indian casinos dropped sharply in 2008. The publication states that “Indian gaming revenue grew 1.5% in 2008, the slowest growth in its reported history.”
Indian casino revenue may not be expanding at all this year and these businesses were built on the assumption that the gaming industry would have substantial growth for the forseeable future. Revenue from all Indian gaming facilities in the US was $26.8 billion in 2008. By contrast, Wynn (NASDAQ:WYNN), one of the largest casino companies in the world, had revenue of nearly $3 billion last year.
Earnings reports from companies including Wynn show that gaming revenue has dropped sharply so far in 2009. Gaming revenue in Nevada dropped 9% in September which was the 21st consecutive monthly decline.
Indian casinos are unlikely to have avoided the sharp drop in revenue that has battered the industry. That means 2009 could be the first year on record when annual receipts actually dropped.
Douglas A. McIntyre
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