Tribal gaming casinos face new challenges from inflation, labor costs - report
Consultancy firm Wipfli recently released the results of its Cost of Doing Business in Indian Gaming Industry Report 2023. Tribal gaming casinos have largely weathered the tumultuous pandemic, but are also facing new challenges, reports show.
The survey revealed several positive trends in tribal gaming revenue. Last year, average revenue at tribal casinos increased 17 percent. This follows double-digit revenue growth of 35% in 2021. Wipfli said that while slower, 17% was "more stable" and marked the third consecutive year of double-digit growth for the industry.
This is despite government relief measures to cover wages and expenses in 2020.
However, that doesn't mean sales will continue to follow the same upward trend. Investigation shows tribal casinos are facing a "new normal" of stable revenue and spending. Tribal casinos face additional challenges.
Inflation and labor shortages continue to push up costs for operators, the survey showed. Competition will also be more intense going forward than during the pandemic era, and tribal casinos will be more competitive for discretionary funds than they were during the pandemic era.
This study examined the financial performance of tribal gaming establishments. The 2023 report includes data from 132 tribal casinos in 17 states. This is Wipfli’s 25th annual report.
New Key Figures for Sports Betting
The 25th annual Cost of Doing Business report includes some sports betting metrics for the first time. Wipfli said sports betting is not a major source of revenue, but it has helped tribal casinos attract new customers.
Sports betting is now legal in 37 states. Tribes is the only site offering sports betting in California, Connecticut and Florida. However, this is no guarantee of future revenue as the sports betting wars continue.
A Florida card room operator is reportedly asking a federal appeals court to overturn its decision to uphold an agreement that gives the Seminole tribe exclusive sports betting rights in the Sunshine State.
Significant Income and Expenses
Domestic casino operating expense margins increased nearly 2% despite increases in interest rates, inflation and employee and marketing expenses.
Other notable results included increases in marketing expenses, promotions and salary expenses, and promotions and salaries compared to prior years. Casinos of nearly every size and location are also investing more in employee benefits and incentives, the study found.
The main source of revenue from gambling continues to be slot machines. The average net profit margin for Indian casinos is about 30%, down about 6% from last year.
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Source: www.casino.org
