Wipfli LLP has just released its 26th Annual Indian Gaming Cost of Doing Business Report for 2024, shedding light on the financial state of tribal gaming across the U.S. According to the report, tribal casinos in 18 states generated a record-breaking $41.9 billion in revenue in 2023. Despite the impressive numbers, tribal gaming operations faced mounting challenges, with profit margins narrowing to 26%, down from 30% in 2022.

Grant Eve, Wipfli’s leader for tribal gaming and government industries, emphasized the resilience of the sector in the face of economic pressures. “The data in this year’s report underscores the resilience of the tribal gaming industry,” Eve said. “While profit margins have narrowed, the overall financial health remains strong. It’s crucial for casino operators to use these insights to strategically navigate the economic challenges ahead and continue delivering value to their tribal communities.”

Key Financial Highlights from the 2024 Report

The Wipfli report offers valuable insights into the operations of 132 tribal casinos, spanning across 18 U.S. states. Despite the narrowing profit margins, several critical trends stood out:

• Revenue Sources: Slot machines continued to serve as the primary source of income for tribal casinos. Meanwhile, marketing, promotions, and wages were noted as the largest expenses.
• Sports Betting Expansion: While sports betting has been introduced in more casinos, it has yet to become a significant income stream. Most sports betting revenue comes from online platforms, and only a small percentage of wagers are made in person at retail sportsbooks.
• Profit Margin Decline: The 26% net profit margin in 2023 marked the second consecutive year of decline. This was down from 30% in 2022 and 36% in 2021, illustrating the increasing pressures on profitability across the industry.

Regional Performance Variations

One notable finding in the 2024 report was the difference in regional performance. The Oklahoma region led the way with the highest return on assets, signaling stronger financial performance compared to other areas. This variance highlights the unique challenges and opportunities different regions face as they continue to adapt to economic fluctuations.

Although the sports betting industry saw a record $119.84 billion in wagers in 2023, retail sports betting in tribal casinos contributed only a small share of that amount. Most of the action occurred through online sportsbooks, and in many states, retail sports betting handles accounted for less than 10% of the total. For instance, in New York, in-person sports betting represented just 0.3% of the state’s total handle in July.

Many experts argue that the growth of online gambling is impacting the profitability of brick-and-mortar casinos, including tribal gaming operations. As more consumers choose to gamble online from their homes, fewer are traveling to physical locations, potentially affecting traditional revenue streams like slot machines and table games. However, proponents of iGaming argue that the expansion of online platforms helps attract new customers to physical casinos as well, pointing to a 3.3% increase in revenue from slot machines and table games in 2023.

Expansion of Tribal Casinos in 2024 and Beyond

In addition to analyzing financial performance, the Wipfli report highlights the ongoing growth of tribal gaming in the U.S. Several new tribal casinos are currently under construction or in the planning phases, ensuring the continued expansion of the industry.

For instance, the Muscogee Nation is set to open the Coweta Casino Hotel in Oklahoma in 2026, while the Ho-Chunk Nation is moving forward with a $405 million casino project in Beloit, Wisconsin, expected to open in 2026. Similarly, California will soon see new additions, such as the Timbisha Shoshone Tribe’s casino in Inyokern and the Hard Rock Casino Tejon, which is scheduled for a late 2025 opening.

These developments reflect the growing footprint of tribal gaming, which now includes over 500 casinos across the U.S., according to the National Indian Gaming Commission.