Report: California’s Indian casinos draw in $7 billion in 2013

California Indian casino revenues have continued to improve, though a new report released this week shows they have yet to surpass the record levels before the recession, suggesting that the dozen or so North Coast tribal casinos continue to operate in a challenging economy.

The state’s 69 tribal casinos raked in $7 billion in 2013, up just a half percent over income in 2012, according to a report put out by Casino City, a clearinghouse for publications on the gambling industry.

“It’s the third straight year of growth,” said Alan Meister, the author of the Indian Gaming Industry Report and an economist with Nathan Associates Inc. Coming out of the recession, gains in California in 2011 were approximately four times as high, with 2012 growth roughly twice as high as that in 2013, according to Meister.

“It’s not unlike Indian gaming nationwide,” he said.

In 2007, California’s Indian casinos collected a record $7.8 billion, according to Meister, whose company has published an annual report on the industry for the past 13 years.

The report provides a glimpse into the often veiled financial world of tribal gambling in the state, where income figures are not necessarily publicly disclosed. Meister’s report draws on a combination of public data, confidential information and estimates.

It shows that after three years of consecutive declines during the recession and in its wake, revenues began to come back in 2011, mirroring the improving general economy.

California accounts for about a quarter of the Indian gambling market in the country, totaling $28.3 billion in revenue across 28 states, according to the report.

It does not call out individual casinos or the North Coast in particular, where tribes have opened a total of 13 casinos in Sonoma, Mendocino and Lake counties.

The report also does not capture a full year of operations at the region’s largest gambling operation, the $800 million Graton Resort and Casino - reportedly the most expensive casino in the state - which opened its doors to massive crowds in November 2013. Thousands of people drove from around the Bay Area for its first-day debut, creating an epic 22-mile traffic backup on Highway 101.

The daily traffic has since leveled off, and it has been difficult to gauge how the casino is faring since both the Federated Indians of Graton Rancheria and its partner, Station Casinos of Las Vegas, stopped publicly reporting its income halfway through 2014, when net revenue through the first six months was $190 million.

Neither Tribal Chairman Greg Sarris nor Station Casinos responded this week to requests for comment.

The 340,000-square-foot casino - with 3,000 slot machines and 144 blackjack, poker and baccarat tables - has four full-service restaurants and seven “fast casual” eateries.

Rohnert Park City Manager Darrin Jenkins said Tuesday that the tribe is making $8 million in annual payments to the city as part of its agreement to offset impacts from the gambling facility.

“They haven’t asked for relief. It seems like a successful casino,” Jenkins said.

Sonoma County Counsel Bruce Goldstein said the Graton tribe is meeting its annual commitment to the county of $5 million in payments.

“I think they are certainly trying to grow their marketing,” he said. “In terms of where they are with their own expectations, they’ve always been pretty close to the vest about that.”

Meanwhile, Sonoma County’s oldest Indian casino, River Rock, near Geyserville, owned by the Dry Creek Rancheria Band of Pomos, is still behind in the $3.5 million it owes the county as part of a long-term revenue-sharing agreement. That payment was due June 30.

“We are still in conversations with them,” Assistant County Administrator Chris Thomas said of the overdue payment.

River Rock officials last year acknowledged that their casino, consisting of 1,275 slot machines and 20 game tables, was hurt by the opening of the newer gambling palace outside Rohnert Park, with revenues plummeting about 50 percent as a result.

The reversal in fortune also was blamed for the Dry Creek tribe’s default in November on its payments of more than $140 million owed to River Rock bondholders.

Newly elected Dry Creek Tribal Chairman Chris Wright did not respond to repeated requests for comment this week.

The Graton Resort and Casino also was predicted to have a negative impact on revenues of smaller, outlying casinos when it opened.

There are seven Indian casinos in Mendocino County and four in Lake County.

“There’s a niche for well-managed, small casinos in local communities in California. But admittedly they have a challenge competing against the Wal-Mart-style casinos that may be just down the road,” said Doug Elmets, who represents five tribes, including those that operate Thunder Valley and Jackson Rancheria, closer to Sacramento.

He said the smaller, out-of-the-way casinos “are facing a lot of challenges.”

But, like other casinos, he said they are benefiting from a stronger economy and patrons who have more discretionary income.

“Are they making as much as they did before Graton arrived upon the scene? Probably not,” Elmets said.

“The numbers are mostly private, but I imagine they (Graton) cannibalized River Rock and some of the Sacramento casinos,” said Alex Bumazhny, a Fitch ratings consultant who analyzes Indian gambling. On the other hand, he said Graton “grew the market substantially.”

The Graton tribe previously said it has plans to eventually build a 200-room hotel, to live up to the “resort” in its name.

Elmets said California casinos have done a good job of diversifying their properties, to become more resort-like, adding spas, hotels, multiple dining experiences, entertainment and even golf courses.

As a result, he said the perception that Las Vegas-style and Indian gambling are different is a thing of the past.

“There’s no question that Indian gaming is much more established in the minds of gamblers than ever,” he said.

Meister, the report author, said gambling is tied to the performance of the economy.

“While the economy is struggling, you are going to see lower growth rates for Indian gaming, nationally and in California,” he said.

Indian gambling took in almost as much as other commercial casinos across the country, which had $29.9 billion in revenue in 2013, with Nevada topping other states.

Meister was unwillingly to predict when Indian gambling in California will surpass the $7.8 billion high of eight years ago. “It took some big hits to lose that ground,” he said. “As things pick up, it will just be a matter of time. I think the next couple of years we’ll start to see more positive growth.”

You can reach Staff Writer Clark Mason at 521-5214 or clark.mason@pressdemocrat.com. On Twitter@clarkmas.