Revenues slide at casinos

Arizonans evidently aren't turning to gambling in search of prosperity in tough economic times.

New figures 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 gambling 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 gambling 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 gambling 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 for 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 Morago, 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 gambling halls on the edge of - and an easy drive from - heavily populated areas. He also said competition can be an issue.

The decline in gambling is significant because it also comes as there are more opportunities for Arizonans to gamble.

As of the end of this last quarter, there were 13,992 gambling devices, such as video slots and poker. That compares with just 13,232 the same time a year earlier.

But the number of blackjack and poker tables has actually declined slightly in the same period.

And things could get worse.

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 Morago said she's not convinced that more money spent on the state-run Lottery means less for reservation gambling.

"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 affects various state and local programs that, 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 Department of Gaming 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 more than $100 million a year.