Recession Not Over for Tribal Casinos

The recession ended in June 2009. That’s what economists at the National Bureau of Economic Research announced last week. But for the many tribal casinos that are still experiencing revenue decreases, it’s far from over.

At the Mohegan Sun in Connecticut, owned/operated by the Mohegan Tribe, revenues dropped so much that it had to do something it had tried so desperately not to do since the economy started going downhill: It had to layoff workers. As reported by the AP on Sept. 14, 355 employees will be let go, and another 120 will be reassigned.

Mohegan Sun blames the job cuts on a drop in slot revenues. During the fiscal year ending in Sept. 2009, the casino reported gross slot revenues of around $780 million, almost a 9 percent decrease from the same month last year.

With more than 8,500 workers, Mohegan Sun is one of Connecticut’s largest employers. This is the first time it has ever had to layoff workers since opening its doors in 1996.

In addition to shedding jobs, the casino plans to shut down one of its buffet restaurants and use more third-party operators for its eateries, according to the AP article.

Nearby Foxwoods and the MGM Grand at Foxwoods, owned by the Mashantucket Pequot, are also reporting declines. On Sept. 15, Foxwoods issued a press release stating that slot revenue in Aug. was $59.2 million, a decrease of 6.3 percent in slot win and a decrease of 3.2 percent in total slot handle as compared to Aug. 2009.

“Our August results are a reflection of prolonged economic conditions and the challenges they present to our, and just about every other, business,” said Mashantucket Pequot Gaming Enterprises President William Sherlock in the release.

Foxwoods was forced to layoff workers in 2008, reducing its workforce by approximately 6 percent.

In California, Cache Creek Casino Resort, owned by the Yocha Dehe Wintun Nation, recently decided to suspend a big expansion project, one that included a 2,200-seat event center, 900-car parking garage and other amenities.

"The outlook for the economy, both locally and across the U.S., just made this decision necessary," tribal spokesman Greg Larsen was quoted as saying in an article published by Sacbee.com on Sept. 16.

The project is not the first one to be put on hold by the casino. Last fall, it put the brakes on a bigger project, which included a 10-story hotel tower, also due to the bad economy.

In June, the National Indian Gaming Commission released data showing that revenues generated by the Indian gaming industry (233 tribes in the United States engaged in gaming) in 2009 totaled $26.5 billion, a dip from the $26.7 billion reported in 2008.

In 2009, 58 percent of tribal gaming operations reported a decrease in revenue, with about half of those showing decreases of less than 10 percent from 2008. Nearly 40 percent, however, reported an increase, with about 15 percent showing a 50 percent jump. NIGC credits those increases for the most part to casinos opening in 2008 and recognizing the first full-year revenue impact in 2009 and to casino expansions.

Casinos across the country, from Los Vegas to Atlantic City, are seeing revenue drops. Nationwide, revenues fell to $30.74 billion in 2009, a 5.5 percent decrease from 2008, according to a report released by the American Gaming Association in May.

And it does not look like 2010 will be much better. In addition to what the Connecticut casinos are experiencing, tribal operations in Arizona, Wisconsin and other states are still reporting fewer dollars coming in.