Craig from URComped and David Schwartz, Head of Gaming Research at UNLV, talk Tribal Gaming

So what exactly is there to know about Tribal Casino Gaming? First let’s begin with a brief history of legal gaming. Legal gaming actually began in New Orleans during the nineteenth century, and eventually spread to other states. However, by the twentieth century most states had outlawed gambling. Nevada actually had legal gaming up until 1910 before it was outlawed. It wasn’t until 1931 that Nevada brought back full on commercial gaming.

However, tribal gaming didn’t really appear until the 1980’s under the Reagan administration. The Reagan administration wanted to lower federal government spending, and therefor encouraged tribal self-sufficiency. Tribes mostly had marginal lands without a lot of great prospects, so many tribe members began experimenting with gambling. What started out as charity bingo rapidly began to grow. This brought around the Indian Gaming Regulatory Act of 1988, which states that if tribes want to offer class three gaming (essentially what you find in Commercial Las Vegas casinos minus the sports betting) they have to enter into a compact with the state. After this, sanctioned tribal government casinos started to appear. Two major casinos that popped up were the Foxwoods and the Pequot tribe. Foxwoods actually became a threat to Atlantic City almost immediately. Another aspect of tribal casinos that contributes to their successes is the fact that they are all over the country. You don’t have to drive very far to find them, making them very available. However, it’s typically a lot more difficult for tribes to get financing, because under federal law you can’t foreclose on Native American property.

In terms of how they are run, commercial and tribal casinos have some key differences. Companies own commercial casinos, and they have a board of directors who focus on maximizing shareholder revenue. Tribal casino systems on the other hand are not designed to necessarily maximize shareholder revenue, but rather to return as much as possible to the tribe. Tribal casinos also put together really good management staff that go out and get licenses to operate casinos in other states, therefor allowing them to expand and get even more back to their tribe.

So how big is tribal gaming today? According to the Director of the Center for Gaming Research at the University of Nevada, Las Vegas Dr. David Schwartz, revenue for tribal casinos is somewhere between 27 and 30 billion dollars a year, so it’s pretty big. In comparison, commercial casino revenue is somewhere between 35 to 40 billion dollars a year.