State gambling dropped more than $2 million in one year

By Howard Fischer
Capitol Media Services
Published/Last Modified on Thursday, July 31, 2008 3:08 PM MDT


 PHOENIX — The state’s soft economy is not resulting in more Arizonans wagering they can beat the odds by gambling their way to prosperity.


 New figures Tuesday show that the amount of profits Indian tribes are sharing with the state was just $26 million in the second quarter of this year, down more than $2 million from the same period a year earlier. That 7.5 percent drop is a direct reflection of how much money people are putting in slot machines and laying down at gaming tables at reservation casinos.

 The new figures suggest a trend is developing. Figures for the first quarter of the year showed a small decrease, less than 1 percent. But that was the first such drop since the state began keeping those records in 2003.

 Where the losses are among the 22 tribal casinos is confidential: The gaming compacts approved by voters in 2002 make that information available only to the state Department of Gaming.

 Alan Meister, an economist with Analysis Group who specializes in gaming issues, said a decline in gambling is not necessarily a surprise. “It is an entertainment industry,’’ he said.

 “It is something that is based on disposable income,’’ Meister continued. “You spend dollars that you have once you set aside your rent, your utilities and your transportation stuff you look at what are you going to do with your money.’’

 That’s also the assessment of Sheila Moraga, executive director of the Arizona Indian Gaming Association. “We are an industry that is solely dependent on discretionary income,’’ she said.

 But Meister said his research on the national level suggests there is reason to believe that the financial woes are not being shared equally by all the tribes. “Certain Indian gaming properties are not doing as well,’’ he said, while information he has been able to obtain from various sources shows others “are continuing to have pretty strong performance.’’

 Among the factors, he said, are the location of the casinos. Some Arizona tribes operate gaming halls on the edge of — and an easy drive from — heavily populated areas. He also said competition can be an issue.

 A provision in the state budget is designed to increase the amount of money Arizonans are spending with the state Lottery. That includes not just more money to promote the games but also increasing the amount paid out and having self-service machines sell not just “scratcher’’ tickets but also online games where the gamblers pick their own numbers.

 But Moraga said she’s not convinced that more money spent on the state-run Lottery means less for reservation gaming. “I don’t normally see that the people who buy lottery tickets are the same people who go out and go to the casinos,’’ she said. “People go to the casinos for a lot more than just the gambling part now,’’ including for dinner and shows.

 The drop in tribal wagering does more than affect the bottom line of the tribes. It also impacts various state and local programs which, under the terms of the compacts, share in the profits.

 The lion’s share of that cash 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 for the costs of its oversight.

 Arizona’s profit sharing is based on a sliding scale, with each tribe paying 1 percent of the first $25 million of its “net win’’ each year — what is 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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