Arizona’s share of tribal gaming revenues are finally shaping up to be what voters were promised nearly half a decade ago when they approved expansion of reservation gambling.
New figures Monday from the Arizona Department of Gaming show the state’s share of tribal gambling revenues for the quarter ending June 30 topped $28.1 million. That puts total revenues for the last four quarters over $91.5 million.
The state Department of Gaming predicted before the 2002 election that tribal revenue sharing from Proposition 202 would bring in $89 million a year during the first full year of operation.
That measure, approved by voters, guaranteed tribes the exclusive right to operate casinos and expanded the types of gambling they could offer in exchange for a share of revenue.
But, for the budget year ending June 30, 2004, the state’s share was less than $30 million, about a third of what was expected.
But Seena Simon, publicist for the Department of gaming, said voters were not intentionally misled.
“The numbers were based on the assumption that all the casinos would be at full steam ahead, at full capacity,” she said, meaning every tribe would immediately begin operating its full allotment of slots, video gaming machines and card games.
“In fact, it has taken tribes longer to ramp up,” Simon said.
And Sheila Morago, executive director of the Arizona Indian Gaming Association, said even now the tribes are not using all the machines they were allotted.
The compacts authorized a result of the 2002 election permit 21 tribes to have 15,250 gaming machines. But as of July 1 there were only 13,232 in use.
One reason is several tribes are not involved in gambling.
For example, the Navajo Nation is entitled to have 1,400 gaming devices. But the tribe only recently hired Robert Winter as its interim chief executive officer of Navajo Gaming Enterprise.
Winter will be in charge of setting up six casinos on the reservation, with sites both in Arizona and New Mexico where the tribe has a separate agreement with that state for additional gaming devices.
That move eventually would affect gaming on the Tohono O’odham Nation.
Other tribes like the Hualapai shuttered casinos after they proved too far away from population centers to make them financially viable.
State gaming revenues are a rough indication of the amount tribes take in each year.
The measure approved by voters in 2002 requires tribes to share 1 percent of the first $25 million in “net win” each year. That is what is left after gamblers collect their winnings but before other expenses.
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.
Individual casino revenues are confidential. But the Gaming Department figured the net win at nearly $1.8 billion for the 12 months ending June 30, 2006.
Alan Meister, an economist with Analysis Group, who uses various public and private sources for his annual Indian Gaming Industry Report, estimates the figure for the calendar year 2006 at $2.1 billion.
Meister predicts continued strong growth for the foreseeable future. He said the $2.1 billion figure is more than 18 percent higher than the prior year, a figure that was 15.3 percent above 2004.
“They’re not reaching a saturation point,” Meister said, adding that the decision of the Navajo Nation to have its own tribal casinos will accelerate the growth.