Arizona tribes see best year in gaming revenues since 2009 - East Valley Tribune: Arizona

Arizona tribes see best year in gaming revenues since 2009

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Posted: Tuesday, October 30, 2012 7:04 am | Updated: 7:50 pm, Sun Nov 4, 2012.

Maybe it's the sign of a slightly improved economy.

Or maybe it's just optimism.

But Arizona tribes took in nearly $1.8 billion last fiscal year even after paying off their winnings. And that's the best since 2009.

"Gaming is essentially driven by people's disposable income,'' said state Gaming Director Mark Brnovich. "So the fact that we're starting to see an increase and uptick I think is an indication that although the broader national economy may still be struggling, at least here in Arizona I think we're seeing progress.''

That $1.8 billion figure represents gross gaming revenues. That's what the tribes had left after they paid out in winnings, but before other expenses like payroll and utilities.

By law, the actual amount wagered in tribal casinos is confidential.

But the law also requires that at least 80 percent of the "handle'' must go back out in winnings. That makes the tribes' share, which amounts to 20 percent or less, the only public indication of how much Arizonans are pumping into gaming machines.

Revenues from individual tribes are not made public.

While the figure is up 5.1 percent from the same time a year earlier, a closer analysis shows that there may be less there than meets the eye.

First, the number is still far below the peak of nearly $2 billion reached four years ago, before the economic bubble deflated.

Second, the gross revenue figure is virtually identical to what tribes reported to the state in 2006.

But at that time there were just 12,795 gaming devices licensed to tribal casinos. Now there are 14,300 at 22 separate casinos.

Put another way, it took a 12 percent increase in opportunities to gamble just to stay even with what Arizonans were doing six years ago.

Brnovich said there are indications that tribes are realizing that they cannot rely simply on revenues from people plunking money into slot machines or wagering on card games. He said that's why several have decided to expand the non-gaming side of their operations.

"We're really seeing this trend towards not just a gambling facility but really a resort facility that has gambling as an element of it and also includes the restaurants and other amenities like spas and golf courses,'' he said.

That's been the experience at the Sol Casinos operated by the Pascua Yaqui tribe in Southern Arizona.

Wendell Long, the casinos' chief executive officer, said the numbers reported to the state reflect only gaming revenues.

"Tribes are expanding their non-gaming revenues so they can still keep healthy revenues flowing to their tribal governments,'' he said. And those numbers are not shared with the state.

In his own tribe's case, Long cited the opening late last year of a new hotel and conference center. He said that not only helps short-term revenues but fits the tribe's view of the bigger picture.

He pointed out that Congress has been weighing various measures which would allow individuals to legally gamble on the World Wide Web.

"We need to make sure we sell the entire experience to our patrons,'' Long said, including a nice hotel room, fine adult beverages and good steaks. "Otherwise, if we're just a slot house, then when Internet gaming comes -- and it will eventually come -- then we're at a competitive disadvantage if people can just do it at their homes.''

More gaming at tribal casinos also helps the state.

Under the terms of a deal approved by voters in 2002, the tribes got exclusive right to operate casinos in the state. In exchange, they agreed to provide a share of the revenues to the state, on a sliding scale from 1 percent to 8 percent of gross revenues, depending on how much each takes in.

For the last budget year, revenue sharing totaled $84.9 million. That's about $6 million more than the prior year.

Half of the funds go to public education, with another $21 million for trauma and emergency services. Tourism and wildlife conservation each get about $6 million.

Another nearly $1.7 million is set aside to help those who are "problem gamblers.'' And the Department of Gaming keeps $8 million for its own regulatory expenses.

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