Tribes Face Economic Gloom
By Ernie C. Salgado Jr., Soboba Tribal Member
San Diego, CA – The Indian Gaming business is feeling the negative impact of the souring economy with many of the small Indian casinos facing closure. The average loss in income is between 20 and 30% according to some sources and in some cases even higher.
The immediate result is lay offs, reduction in advertisements and purchases of goods and services. This will cause a ripple effect, as the Indian gaming business is a multi-million dollar business with not only the Native American benefiting. The manufactures, suppliers, shipping and hundreds of non-Indian workers will also feel the impact.
- "The new game in town is 'Competition' and it will be brutal..."
One thing you can bet on is that the government will not be bailing out the Indian casinos. The State Legislator and United States Congress can’t even pass a budget to keep the economy running at the state and federal level. This is what you can call real accountability.
This may not be a bad thing as many Tribal groups were of the mind set that they were above the rest of the world and that the casinos were immune to the economic trends. However, some tribal leaders were aware of the impact of the failing economy and began taking alternative action. Rincon, Pechanga and Auga Caliente are three that immediately come to mind. Although all three have professional management teams working for them the Tribal leadership provided the direction.
Many gaming tribes have diversified their assets to other businesses, but will still feel the impact of the current economic crisis. Still other tribes have built cash reserves and other resources to weather the financial crisis. However, many tribes lack the leadership to deal with the crisis at hand. In some cases the Tribal Councils actually “Micro Manage” the tribal casinos even though they hire managers.
It is easy to identify the “Micro Managed” tribal casinos because they have an exceptionally high turn over of managers. The biggest reason for the high turnover is because the professional managers don’t always go along with the political or self-interest decisions made by the tribal leaders.
The new game in town is “Competition” and it will be brutal. Up to now the Indian casino have had the privilege of a 20 to 30% profit margin on the machines. This will change and in fact it is changing as this is bring written. Management and marketing will be of the utmost importance in wooing player away from other casinos.
- "It is going to be a player's market with the casinos doing everything they can to entice the players to visit their casino..."
Currently the drop of player is between 20 to 30%, which will drop even lower as the economy struggle to recover. It is going to be a player market with the casino doing everything they can to entice the players to visit their casino. Another major factor is the location of the casinos, as the driving distance will play a critical role in the player’s selection of casinos.
A new web site, CALIE.ORG will provide free Indian casino players blogs that will be up and running on October 1st. CALIE.ORG is dedicated to the player views of the best Indian casino to play. We will keep you informed in our next issue of the changes in the Indian gaming world.
ERNIE C. SALGADO JR
Tribal: Soboba Indian Reservation
Web Site: www.apapas.com
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