Foxwoods, Mohegan Sun, Harrah’s: these are a few key players in the gaming industry. And many who frequent the craps tables or drive past their billboards know that these casinos (and many others throughout the country) are owned by Native American tribes. Although regulated by the Indian Gaming Regulatory Act, Native American gaming has recently been on the rise, largely due to the government’s limited ability to prohibit gambling on Indian reservations and other lands of tribal sovereignty. In fact, according to a recent analysis by Bank of America Merrill Lynch, Native American gaming represents 43 percent of U.S. gaming industry revenue – with Las Vegas representing only 10 percent and regional commercial gaming the remaining 47 percent. Two hundred thirty-six Native American tribes operate four hundred twenty-two facilities across around twenty states. How does the Native American gaming industry continue to grow in the midst of the down economy while some Las Vegas resorts and casinos have shuttered their doors?
The Way I See It
- I see casinos working with agencies to direct creative, which needs to differentiate the casino from any other gambling institution and drive visitors to take their gambling dollars there. To many people, all casinos are the same, so the real challenge is brand development and recognition.
- Many Native American gaming institutions are in key localities and thus focus largely on target marketing and securing local attention – and driving tourism. Say you’re driving down the highway through Chicago toward Northwest Indiana, you’ll see billboards advertising casinos to encourage you to get off at certain exits, or if you’re somewhere regionally close, you may see commercials during local programming advertising casinos. For casinos, understanding the local target market is key.
- The Native American gaming industry has grown into a $27 billion business from almost nothing twenty years ago, alongside the rise of online gaming and Internet gambling, which have only increased the competition. I see casinos using new marketing and advertising tools to reach new target audiences in order to build brand reputation and attract future visitors.
- I see many Native American casinos taking advantage of social media to grow brand identity and draw new visitors with tactics such as sweepstakes on Twitter and photos of recent parties at various casino locations on Facebook.
The Way The Industry Sees It
I sat down with Jim Diamond, an expert in Indian Law, to discuss the recent rise of Native American gaming and casinos.
Being an expert in Indian Law, could you explain the history of Native American sponsored gaming and its regulation?
Many people aren’t aware that games of chance are a part of Native American – Indian – culture and are not a recent invention. Even before the arrival of the Europeans, American Indians played individual games like dice, or team sports, for example, and wagering was a common element of the activities. Large scale commercial gaming sponsored by American Indian tribes proliferated in the 1980’s when Reagan-era budget cuts forced tribes to find alternative sources of operating funds. States then ventured into expanded reliance on lotteries. The result was that a number of tribes like those in Florida and California expanded gaming, first by expanding bingo games. This met with opposition by the states, who said the expanded gaming ran afoul of state anti-gambling laws. The tribes sued in federal court and a federal regulatory scheme, Indian Gaming Regulatory Act (IGRA), with permissive Indian tribal gaming was the result. IGRA forced states to enter into agreements – compacts – with Indian tribes, but under a framework established under federal law.
By remaining on the outskirts of the federal government’s regular gambling jurisdiction, how do you think Native American casinos have impacted gamblers across the nation?
First, states that permit Indian gaming have come to heavily rely on the whopping $1.4 billion tribal gaming contributes to state tax revenues. Most significantly, Ron, I think the American experience with Indian gaming has led to a change in popular opinion that the social harms feared to result from expanded gambling have been largely unrealized. So, with the reduced fear of gambling addiction or organized crime and the dependence on the tax revenue, gaming is now everywhere. The popularity of Indian gaming has led states to vastly expand non-Indian casino and other gaming. Around twenty states now have commercial casinos. The popularity of Indian gaming has also led states to be more open to expand other forms of permissive non-Indian gambling like the popular riverboat gambling, racetracks, and off-track betting. Charities and religious groups have also benefitted from the permissive atmosphere with expanded “Las Vegas nights” and bingo. So the overall resulting expansion of legal gambling has meant consumers don’t have to travel as far to gamble.