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story.lead_photo.caption Pam Thurman of Grove, Okla., plays on a machine at Cherokee Casino in Grove. In 2015 — the latest year available — gambling operations run by American Indian tribes for the first time bested other gambling segments. - Photo by Jason Ivester

Oklahoma casinos owned and operated by American Indian tribes saw gambling revenue rise in 2015 and their associated hotels and restaurants made strong gains in nongambling revenue.

Photo by Jason Ivester
Players circulate the gambling floor at Cherokee Casino in Grove, Okla. In a recently released report, tribal gambling in Oklahoma in 2015 took in $4.2 billion in total revenue, second only to California, which brought in $7.9 billion.
A map showing major American Indian-owned casino operations near Arkansas’ border

The tribes in Oklahoma earned $4.214 billion in revenue in 2015, up 6.7 percent from $3.950 billion in 2014, according to the recently released Casino City's Indian Gaming Industry Report. Nongambling revenue in Oklahoma for 2015 totaled $667 million, up 4.7 percent from $637 million for the year earlier.

Five Oklahoma tribes operate casinos that include hotels along Arkansas' western border, all of which feature restaurants and entertainment. While gambling is still the key revenue source, industry watchers have said for years that modern casinos have to offer a variety of experiences if they want to stay competitive and lure customers from neighboring states and away from local competitors.

Nationally, American Indian-owned casinos saw 5.5 percent revenue growth in 2015, raking in $30.5 billion, an all-time high. The industry has seen steady annual growth since the latest recession and nongambling revenue also continued to grow, up about 4.5 percent to $3.9 billion for 2015.

Arkansas has no tribal-owned gambling, but betting is allowed on greyhound races at Southland Park in West Memphis and on Thoroughbred horse races at Oaklawn Park in Hot Springs. State law allows gambling at the racetracks on electronic devices that are similar to devices offered at out-of-state casinos.

Last year there was a ballot initiative for a proposed constitutional amendment allowing three casinos in southwest and Northwest Arkansas. According to backers of the measure, Oklahoma-based Cherokee Nation Entertainment would have been involved in the proposed casino, hotel and entertainment complex in Washington County. In an October ruling, the Arkansas Supreme Court rejected the proposed amendment, saying the ballot title was insufficient because it didn't inform voters that federal law prohibits Arkansas and other states from authorizing sports gambling.

In 2015, gambling operations run by American Indian tribes for the first time bested other gambling segments, becoming the largest segment of the industry, with just over $30 billion in revenue. According to the report, traditional commercial casinos saw 1.6 percent growth in 2015, bringing in $29.8 billion; racetrack casinos, called racinos, grew 4.2 percent to $8.5 billion for the same period. For 2015, American Indian-owned casinos controlled 44.3 percent of the national market, commercial casinos held 43.3 percent and racinos 12.4 percent.

Alan Meister, an economist with Nathan Associates Inc. and author of the Casino City report, said that, nationally, American Indian-owned casinos showed strong growth, noting that it was the sixth consecutive year for revenue gains. He said the industry is returning to revenue numbers seen before the 2007-2009 recession.

In 2015 there were 242 tribes in the United States with operations that include close to 357,000 gambling machines and 7,700 table games. They own and operate 494 gambling facilities in 28 states.

Gary Green, a casino developer and consultant with expertise in American Indian gambling, said he's not surprised that tribal gambling revenue is seeing strong growth but said that's just the tip of the iceberg.

"Less than half of the eligible tribes have casinos right now," he said.

Green, a partner in Florida-based Gary Green Gaming Inc., has worked in the industry for decades and was a marketing executive for Trump Hotels and Casinos. During his career he was fired from a management position in Oklahoma and one in Montana, according to news reports and industry publications, but those firings coincided with changes in tribal government, according to news reports and industry publications.

He said that if current tribal gambling revenue is extrapolated, tribes could have generated an additional $35 billion in annual income if all eligible tribes entered the market.

"The potential there is huge," he said.

What limits that sort of growth, Green said, are elaborate hurdles tribal casinos have to overcome regarding financing and the fact that they still can't offer true Las Vegas-style table games. Green said most tribal casinos can't offer games such as craps, roulette and blackjack played directly against the house due to tribal-state compacts that can, and often do, restrict the availability of such games of chance.

In 2015, Oklahoma came in second in the United States for total revenue in 2015 for tribal gambling, following only California, which earned $7.9 billion. Combined, the two states earned 40 percent of all tribal gambling revenue for the period.

Oklahoma had 128 American Indian-owned gambling facilities in 2015, up two from 2014 and the most in the nation, although many are small-scale operations. Thirty tribes run casinos of some sort in Oklahoma, with a total of more than 72,500 electronic games in 2015, up 3 percent from the previous year and 741 table games, down 3 percent for 2014.

Oklahoma benefits, Green said, because of its proximity to states that don't have tribal gambling or that limit commercial casino operations. He said visitors and gamblers travel from Arkansas, Texas, Missouri and Kansas to spend money in Oklahoma's casinos and hotels. That demand, he said, not only generates revenue for the tribes, it also creates jobs and tax revenue.

"Oklahoma is perfectly positioned," Green said.

In 2015, the Cherokee Nation completed an $80 million casino hotel in Roland, Okla., on the Arkansas state line along Interstate 40 near Fort Smith. The six-story hotel has 120 rooms, and the casino has 850 electronic games as well as an assortment of table games.

In January, the Cherokee Nation opened the Cherokee Casino in Grove, Okla. The new location, northwest of the Arkansas line, includes 400 electronic games, restaurant, full-service bar, music venue and dance floor.

Cherokee Nation also is building a casino hotel as part of a large-scale retail development near the Arkansas border in Tahlequah, Okla. The casino hotel is in the design phase and the tribe is conducting engineering studies that must be completed before construction begins, a spokesman said recently.

The Eastern Shawnee Tribe's Indigo Sky Casino in Wyandotte, Okla., is investing $36 million on an expansion project, adding a second hotel tower that will include an additional 128 rooms, bringing its room count to 245, adding a 600-seat event center and expanding its restaurant. The project is expected to be completed in August.

SundayMonday Business on 04/16/2017

Print Headline: Tribal casinos are on a roll, outpacing national industry

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