SAN DIEGO – Nearly half of tribal casinos survey by Raving Consulting Co. said their total revenues were at least $50 million in 2018, adding their financial performances topped most of their competitors in their respective markets.
The survey marked the third time Raving has conducted the research and was the first time it included a category of $50 million and above. The results were released at the National Indian Gaming Association convention and tradeshow.
In this year’s survey, some 22 percent of the tribal casinos had between $30 million and $49.9 million in revenue; 14 percent had between $15 million to $29.9 million; 10 percent had revenue of $5 million to $14.9 million and 8 percent had less than $5 million in revenue.
Roughly 8 percent of the tribes said their casino is performing worse than their competition and 28 percent don’t know. The remainder said they are even with competitors or have zero competition in their market.
Raving said 83 casinos participated in the survey, comprising 21 percent of all tribal casinos in the U.S.
Increased competition at 15 percent and profit goals at 14 percent were cited in the survey as the third and fourth biggest challenges their tribal casino will face in 2019.
In response for casino marketing efforts, those in Generation X and baby boomers are getting the biggest increase. Last year, 27 percent of tribes said they would increase focus on baby boomers, and that rose to 51 percent this year. About a quarter plan to increase marketing for Generation Y and millennials.
The second biggest challenge facing casinos in 2019 after staffing is aging amenities at 17 percent. Some 68 percent said they are planning capital expansion projects in 2019, about the same last year.
The type of capital expansion projects is the biggest change. A year ago, it was centered on hotel expansion and renovation. This year, plans include RV parks, food venues, and slot floor expansion.
Tribal casinos reported declining profitability when it came to entertainment venues. In the first two years of the survey, 11 percent and 9 percent of these question said their venues were profitable. In 2018, it fell to 4 percent, while 51 percent said they broke even, the highest ever.
The percent of casinos saying it was important to offer free play for slots increased to 78 percent, said Debra Hilgeman, a senior research partner with Raving Consulting.
Last year, the percent of casinos planning to increase free play offers more than doubled from 13 percent to 29 percent. It’s down to 15 percent this year. Nearly 20 percent of casinos said they are spending half of their monthly promotions budget on free play.
Steve Neely, general manager of the Rolling Hills Casino in California, said the survey said advertising is changing the landscape and profits are getting tougher.
“You are fighting with the finance folks about the bottom line and the marketing people are saying we need to spend more to get more,” Neely said. “What’s the answer? We are in the marketing age and there’s never been an opportunity like today to talk to customers immediately in the way they want to be talked to at the time they are ready to buy. If you are not researching and analyzing and sticking to what you were doing before while everybody around you is building and adding on, you are in a bad spot.”
Mark Astone, CEO of Catalyst Marketing Co. said casino marketing budgets will have to increase to compete because the market has become so fragmented. Casinos won’t so it will require reallocation of marketing dollars to see what’s getting people to the property, he said.
