Tribal gaming revenues remain low

PHOENIX — The amount of wagering at tribal casinos continues to remain weak as Arizonans hang on to their dollars.

New figures Monday from the Arizona Department of Gaming put tribal contributions to the state for the second quarter of the year at slightly more than $23.5 million. That is about 9.4 percent less than the same period last year.

The numbers reflect the required percentage of the "net win'' for all 22 casinos in the state that tribes are contractually obligated to share. That is what is left after gamblers collect their winnings but before other expenses.

Actual gaming figures are not public, making the revenue sharing numbers one of the best indications of trends in legal gambling.

Sheila Morago, executive director of the Arizona Indian Gaming Association, said the year-over-year decline is not a surprise. In fact, that 9.4 percent drop is identical to the figures for the first quarter of this year compared to the same time in 2008.

"I'm just happy we're staying steady right now,'' she said.

If there's any really good news in the numbers for the tribes, it is that the dismal report comes as lobbyists for the horse and dog racing industry are urging lawmakers to let their clients also have casino-style gaming.

"There's probably not a whole lot of reason to be adding additional machines to the market when the market is still decreasing over last year,'' Morago said.

But Gibson McKay, one of those lobbyists, said he doesn't see the shrinking numbers as any reason for the tracks to abandon their bid. Instead, he sees the soft economy as a plus for the lobbying effort, particularly with state government running a deficit.

The key, he said, is money: The tracks would give the state far more of it than the tribes.

"Whenever you're offering 45 percent to tax anything, you're certainly making a huge dent in what has been a very difficult time for the state of Arizona,'' McKay said. He said creating "racinos'' — a combination of race tracks and casinos — would be "part of the solution'' to the state's revenue problem.

Figures prepared by the tracks estimate that tax could bring in $500 million in the first full year of operation and perhaps $800 million when permanent facilities are built.

By contrast, the state's contract with the tribes requires them to share 1 percent of the first $25 million in net win each year. Arizona gets 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.

The most recent figures from the Arizona Department of Gaming put the annual contributions to the state at close to $110 million. About half of that is legally earmarked for education, with a quarter set aside for emergency medical services.

On top of that, the tribes gave more than $15.1 million to cities, towns and counties.

Those dollars would go away if lawmakers allow the tracks to have casino gaming. That's because the 2002 voter-approved ballot measure pushed by the tribes absolves them of any need to share revenues if off-reservation gambling is allowed to increase.

Morago said she and tribal gaming officials are spending time at the Legislature in hopes of fending off the push by the tracks.

So are the lobbyists for the tracks.

McKay said the downturn in tribal gaming should not be an excuse for lawmakers to reject racinos.

"In this economic climate, restaurants or local taverns or that kind of thing, you see business has gone down in many instances,'' he said. McKay said the drop in all entertainment spending is likely temporary.

Voters specifically rejected another measure on the 2002 ballot, this one pushed by the tracks, to allow them to also have slot machines. Fewer than one out of every five voters agreed to support their measure; the measure giving tribes exclusive rights for casinos slipped through by a 51-49 margin.

This time, however, the tracks are not seeking public support, at least not directly, but instead are taking their plan for expanded gaming directly to the Legislature.