Minnesota casinos gambling growth slows

Pat Doyle, Star Tribune The growth of gambling at Minnesota's tribal casinos is slowing, an indication of a maturing market where opportunities for expansion have been limited. In 2004, Minnesota slipped from third to fourth nationally in revenues from tribal casinos as gambling elsewhere grew strongly, according to the annual Indian Gaming Industry Report prepared by an economist who specializes in the casino industry. Minnesota's tribal casinos pulled in $1.3 billion from slot machines and blackjack tables in 2004. That represents about 7 percent of gambling revenue from all tribal casinos in the nation. Revenues grew by 1.2 percent in 2004, down slightly from the growth rate the previous year. It was unclear how much of the slackened growth could be attributable to the state gambling market nearing a saturation point, said Alan Meister, an economist with Analysis Group, a national consulting firm, who wrote the Gambling Industry Report. He added that another growth-inhibiting factor could be the failure of gambling proponents to build a tribal-state casino in the Twin Cities that might stimulate new revenue. Efforts over the past two years to build a tribal-state casino or a racino at Canterbury Park or elsewhere in the Twin Cities have stalled amid political opposition. "A new casino, whether it's the racino or a new Indian gaming facility, definitely would compete against existing facilities," Meister said. "To some extent it's going to be competing for the same business, and there will be just a pure substitution of some dollars." But Meister said a new building in a prime metro location would probably stimulate more gambling. "The question is how much new dollars is going to be generated," he said. The question of whether the casino gambling market is nearing saturation was raised this year during legislative hearings on a state-tribal casino and racino. "Gaming is growing in Minnesota," said Paul Anton, an economist who testified this year before a House committee in behalf of backers of a state-sponsored casino. "There is every reason to believe that it will grow for some time." John McCarthy, executive director of the Minnesota Indian Gaming Association and an opponent of expanded gambling, said: "I definitely think we are getting into somewhat of a saturation point. It's been noticeable that it's been sort of leveling off." McCarthy blamed high gas prices, the poker craze outside casinos and the card club at Canterbury for helping slow growth in tribal casino revenues. Arizona replaced Minnesota as the third-biggest source of tribal casino revenues after it experienced its first full year of operations under new gambling compacts that allowed Arizona tribes to increase the number of slot machines and to introduce blackjack, the report said. The report also noted the varying revenue sharing arrangements of tribal casinos in different states. Arizona, for instance, has an agreement with its tribes that requires them to contribute 1 to 8 percent of gambling revenue to the state. Minnesota receives $150,000 a year from tribes to pay for regulation by the Department of Public Safety. Meister says millions of additional casino revenue pays local governments for some of the cost of police, fire, ambulance and other services around casinos. The payments are in lieu of property taxes. Pat Doyle is at pdoyle@startribune.com.