Gaming Law Review & Economics has published a note, "Economic Issues Affecting Native American Gaming," featuring Gabe Galanda's remarks during a roundtable discussion last fall regarding economic issuing impacting the $26.5 billion Indian gaming industry. On the state of Indian gaming markets vis-a-vis that of domestic commercial gaming meccas:
[T]he New York Times wrote about this phenomenon, indicating that Reno and Lake Tahoe are seeing their revenues erode by as much as 25%–40%. That is juxtaposed with places like the Pacific Northwest, which are seeing modest, perhaps even healthy, growth during the same time period.
On the state of tribal financing:
[Y]ou are seeing that gaming tribes can only take out bank debt based on 2 to 2.5 times historical EBITDA, meaning proven cash ﬂow. You once were able to leverage, very favorably, relatively unproven cash ﬂows. Now though, unless you have historical, proven cash ﬂow, you are going to have a very difficult time obtaining any money, and what money you are going to be able to obtain is probably far less—and it will cost you far more— than in prior years.
On the state of Indian gaming contracting:
There are a number of contracts, both in form and substance, that pertain to Class II or Class III gaming—most notably, those for gaming machines. We are now seeing the same type of financial scrutiny of deal terms in these contracts that we are talking about in regard to significant financing or restructuring transactions. We are seeing that scrutiny of what historically have been almost boilerplate agreements between tribal casino operators and their business partners . . .
On the states' budget crises:
[T]here is an estimated $112 billion shortfall amongst the states collectively. I will tell you that on the ground, in the offices of state or local assessors, there are government officials who are looking perhaps beyond the casino itself, the monies ﬂowing from that particular casino and the properties within that casino, but still towards the tribe, to figure out how they can get their hooks into gaming proceeds running to the tribal government.
On state Class III gaming "fees" in lieu of taxes:
[W]e will see state governments in particular trying to develop new ways of imposing fees on gaming activities in circumvention of the stated intent, purpose, and spirit of IGRA, in desperate attempt to balance hemorrhaging state budgets.
Gabriel "Gabe" Galanda is a partner at Galanda Broadman PLLC, of Seattle, an American Indian majority-owned law firm. He is an enrolled member of the Round Valley Indian Tribes of Covelo, California. He can be reached at 206.691.3631 or firstname.lastname@example.org, or via galandabroadman.com.