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The Growth of the Native American Gaming Industry

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Lots of people today believe that Native Americans have struck it rich with the incredible rise of their gaming industry.

It’s easy to see why this belief is so pervasive. In 2016, revenue surpassed the $31 billion mark, accounting for 21% of all American gambling revenue.

Indian Gaming Revenue

These are staggering numbers by anyone’s estimates. If you think about it, that means that Native American casinos are claiming $2.10 out of every $10 gambled in the USA!

It’s natural to wonder what is driving this unbelievable success. I’ll be looking into that and a whole lot more in this post.

The Beginnings of the Native American Gaming Industry

The roots of the Native American gaming industry go back to the 1970s.

One infamous early incident was when the Seminole Tribe (Florida) opened a bingo hall. It was a huge success, and the authorities quickly tried to shut it down. The tribe didn’t take it lying down, though, and a fierce court battle soon followed.

In 1979, the Supreme Court determined that state authorities had no jurisdiction over reservations and could not regulate reservations or the activities on them.

Nine years later, in 1988, the Indian Gaming Regulatory Act was passed. This made it a requirement for reservations to consult with states before offering real money casino games. It also gave the burgeoning industry unprecedented credibility and legal standing.

Since then, the revenue generated from the industry has skyrocketed.

Tribal casinos now generate more cash than both Las Vegas and Atlantic city put together and own two of the largest land casinos in the world.

Quite a story isn’t it?! That’s a long way to come in just over 50 years.

What’s the Reason for This Stellar Success?

Like all things, there’s no single reason for the success of the industry. Multiple factors are at play. Some likely factors include:

  • Scale – Tribes own 460 gaming establishments across 28 states. This includes some of the biggest land casinos in the USA, such as the Mohegan Sun and the Foxwoods Resort
  • Interest – Naturally, the media is extremely interested in this phenomena. Given the glitz and glamour of some of these casinos, the media attention surrounding them has been intense. This leads to awareness, which leads to visitors
  • Determination – It’s no secret that many tribes were and still are much poorer than average. The scent of success and the subsequent determination and hard work to make it happen has no doubt played a role in the story of Native American gaming
  • Laws – While many casinos on reservations do pay state taxes and contribute greatly to their local economies, some don’t have to pay state or federal taxes. Naturally, that means more profit to reinvest in new establishments and better the existing ones

Some of the Best-Known Native American Casinos

I already mentioned above that tribes operate 460 establishments across the United States. Yet several of these stand head and shoulders above the others. Let’s take a look at some of those now, as they’re the best examples of where this insane revenue is coming from.

Foxwoods Resort

This is the mac-daddy of all Native American casinos. It opened in 1992 and is operated by the Mashantucket Pequot Tribe.

This mega casino runs 1.5 miles from end to end and is the second-biggest casino in the US.

Foxwoods pays 25% of all gaming revenue generated from slots to the state of Connecticut. It’s estimated that since its opening in 1992, Foxwoods has poured over $4 billion into state coffers.

The Mohegan Sun

This colossal Connecticut casino is owned by the Mohegan Tribe. It has been operational since 1996 and is located just seven miles from the Foxwoods Resort.

This isn’t quite as huge as Foxwoods, but at 580,000 square feet, it isn’t small, either. It’s the third-largest casino in the USA, after the Foxwoods Resort and the WinStar in Oklahoma.

Again, this casino has contributed substantially to the local economy. It’s estimated that $3 billion has gone into Connecticut’s treasury from the Mohegan Sun since it opened.

Pechanga Resort and Resort

The largest casino in California, the Pechanga opened in 2002 and cost $262 million to build.

This casino has over 3,000 slot machines and is over 200,000 square feet in size. That’s just under half the size of the Mohegan Sun, but it’s still colossal. For some perspective, that makes it bigger than the MGM Grand in Las Vegas.

The Pechanga is a lot more than just a casino. There are over 1,000 rooms for guests, and bars, restaurants, and a swimming pool are all part of the package.

As you can see, Native American casinos aren’t some two-bit operations out in the sticks. These are some of the top casinos in the USA, and the three mentioned here alone should give you some idea of the size of the Native American gaming industry as a whole.

Other Ways the Industry Generates Revenue

Not all of the $31 billion+ comes directly from players putting money through slot machines and gambling at blackjack or poker tables. This is a multifaceted industry. Some of the other ways revenue is generated include the following.

iGaming

Several tribes offer gaming licenses for online operations. The Kahnawake Gaming Commission is one such example. It’s been around since 1999, making it one of the first official gaming regulators in the iGaming business.

Licensing

Not all tribal casinos are run by tribes. Some have decided to license the right to run a casino or resort on their land.

It’s an established fact that President Donald Trump once tried his hand at running a casino on a reservation. He’s not the only one!

Entertainment

As some of the casinos outlined above indicate, there’s a lot more on offer than just gaming.

Note

Hotels, spas, catering, and all manner of entertainment are features of many tribal casinos. These all contribute to the boom.

Exact figures are extremely tough to pinpoint, partly because many tribal casinos don’t have to pay federal or state taxes.

That stated, it’s safe to say that these revenue streams, while significant, make up the minority of the total revenue generated. The real lion’s share is generated by gaming itself.

Where Does All That Money Go?

Part of the deal with not having to pay federal and state taxes is that the revenue must be used for tribal governmental and charitable purposes only.

Funds from casinos are used for:

  • Education
  • Healthcare
  • Housing
  • Development

Basically, you could say it’s used in exactly the same way our taxes are, or at least are supposed to be, used.

Despite all of the money, some Native American rights groups are keen to set straight the myth that all Native Americans have gotten rich from the gaming industry. They point out that poverty levels among their populations are still significantly higher than average, and that of the 560 recognized tribes, only 224 are involved in gaming.

Summary

What’s clear is that there are vast sums of money being generated and that the Native American gaming industry is booming. However, it isn’t a solve-all, and many tribes aren’t even involved in the industry.

Native American gaming has come a heck of a long way, and I for one am excited to see what the future holds. Could Native Americans one day control American gambling, period? Who knows – but if the industry can reach this size from nothing in just over 50 years, anything’s possible going forward!