State revenue suggests recovery has reached Arizona's tribal casinos - East Valley Tribune: Arizona

State revenue suggests recovery has reached Arizona's tribal casinos

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Posted: Friday, July 29, 2011 5:15 pm

The state’s tribal casinos are beginning to show signs of recovery.

New figures Friday from the Arizona Department of Gaming show the tribes gave the state nearly $24.5 million in revenue sharing for the quarter that ended June 30. That is an increase of 7.1 percent over the same period a year earlier.

Gaming Director Mark Brnovich said he is optimistic.

“It’s always tough to make general predictions based on small samples of data,” he said.

“But in the past four quarters we have seen trend lines moving in the right direction,” Brnovich continued. “And that’s a positive sign, especially in light of the fact in the previous 10 quarters they were decreasing.”

Actual profits at tribal casinos are confidential.

The only way to judge how much Arizonans are wagering is by measuring these quarterly reports of the revenues the tribes agreed to share with the state. That was part of a 2002 voter-approved deal giving them the exclusive right to operate casinos.

That deal also resulted in the tribes all being allowed in 2008 to increase the number of slot machines they operate. That, however, did not result in any bump in gaming.

Brnovich said that is not surprising. He said the weak numbers through the end of the last decade, and the stronger numbers now, simply reflect the economy.

“Historically, gaming is an activity that people engage in with discretionary income,” he said.

“The fact that people are going to spend money gaming, regardless of devices, I think may be a sign that the overall economic condition may be improving,” Brnovich said. “Or people may think it’s improving.”

That’s also the assessment of Valerie Spicer, executive director of the Arizona Indian Gaming Association.

“People are a little more comfortable using entertainment dollars,” she said.

What also may help, Spicer said, is the high price of gasoline. She said that may keep people closer to home instead of using those entertainment dollars to travel.

But the figures show that casinos still have a long way to go to get back to pre-recession levels of gaming.

Half of tribal revenue sharing goes to public education, with smaller amounts for trauma and emergency services, wildlife conservation, tourism and programs aimed at helping people with gambling problems. The state Gaming Department also gets a share to cover the costs of its oversight.

The revenue sharing formula is based on a sliding scale, with each tribe paying 1 percent of the first $25 of its “net win” each year, the amount left after gamblers are paid their winnings but before operating costs. Tribes then pay 3 percent of the next $50 million, 6 percent of the next $25 million and 8 percent of anything over $100 million a year.

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