Executive Summary 12 Casino City’s Indian Gaming Business Report Broadening the view a little, the top 28.9% of gaming facilities, which each generated $50 million or more, accounted for 85.9% of gaming revenue. On the other end of the spectrum, the smallest 38.9% of gaming facilities, which each generated $10 million or less, only accounted for 2.1% of gaming revenue. While there has been great disparity between the performance of Class II and Class III gaming in the past, the gap continued to narrow in 2017. Gaming revenue in Class II only states grew 6.1%, compared to approximately 4.2% in states with at least some Class III gaming (i.e., Las Vegas style gaming). In addition, the vast majority of total gaming revenue for Indian gaming was generated in the 24 Indian gaming states with at least some Class III gaming (97.1%). Indian gaming had a significant economic and fiscal impact in 2017. First and foremost, Indian gaming continued to serve as a means of promoting tribal economic development, selfsufficiency and strong tribal governments. Per federal law, gaming profits were used to: Fund tribal government operations; Develop tribal infrastructure; Support tribal programs and services; and Finance economic development efforts. In addition to having a positive impact on Native American tribes and their members, Indian gaming facilities continued to make substantial economic and fiscal impacts on their surrounding communities and the economy. Indian gaming facilities, including their nongaming operations, directly generated economic activity, provided jobs and wages, assisted charities and made direct payments to federal, state and local governments (i.e., revenue sharing). Indian gaming also led to secondary impacts including and resulting from the iteration of purchases of goods and services by Indian gaming facilities, tribal governments, other governments that received revenue sharing payments from tribes, casino vendors and other businesses down the supply chain and employees at all of these entities. In 2017, the total contribution of Indian gaming to the U.S. economy, including both direct and secondary aspects, totaled approximately: $112.8 billion in output (i.e., value of sales); 705,000 jobs; $37.9 billion in wages; and $16.3 billion in fiscal impact, including: $1.9 billion in direct payments to federal, state and local governments; and $14.4 billion in federal, state and local taxes. Looking forward, there are a number of potential opportunities for the future growth of Indian gaming. As the economy continues to grow, it will likely lead to improved growth of Indian gaming. As in previous years, performance will likely vary widely across Indian gaming facilities, tribes and states. There are several potential sources of future Indian gaming growth: 1) States that have limited competition and/or unmet demand; 2) States where tribes were previously restricted in terms of gaming supply but are able to expand when there is sufficient demand; 3) Smaller, less mature Indian gaming markets; 4) Continued development and implementation of high-performing Class II gaming machines; 5) Additions of Class III gaming to Class II only states; 6) The enactment of public policies favorable to the development of Indian gaming; 7) Continued growth from the replacement, expansion and remodeling of existing gaming facilities; and 8) Growth from new Indian gaming facilities, including those requiring land to be taken into trust by the federal government. However, given the mix of legal, regulatory, political and economic challenges facing Indian gaming, there is uncertainty regarding its longerterm future. Key economic challenges include: Increasing competition; New types of gaming, including iGaming, eSports and sports betting; The next generations of gamers; and Maturation of gaming markets.
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