Interview with Casino City's Indian Gaming Industry Report author Dr. Alan Meister

For the past 14 years, Casino City's Indian Gaming Industry Report has been widely recognized as the most comprehensive and up-to-date study of Indian gaming in the U.S. The study's author, Dr. Alan Meister, is an economist with Nathan Associates Inc. who specializes in the application of economic analysis to public policy, litigation, regulatory issues, and business planning and operations matters.

Dr. Meister has extensive consulting experience analyzing economic issues related to the gaming industry and has conducted years of independent, scholarly research on the industry.

With the Global Gaming Expo (G2E) kicking off this week in Las Vegas, Casino City sat down with Dr. Meister to hear more about his background, what keeps him going after 16-plus years of analyzing the industry, and what he thinks are the key findings from the most recent Indian Gaming Industry Report.

1. How and why did you get involved in researching and analyzing the gaming industry?

I first got started over 16 years ago. A tribe had retained me to conduct economic analysis related to the acquisition of land in trust for gaming. Three things struck a chord with me during that project that made me interested in doing more gaming-related work. First, I found the gaming industry to be a fascinating sector to which a greater degree of rigorous economics could be applied to help inform business and public policy issues. Second, the significance and unique nature of gaming to Native American tribes really drew me in – I needed to know more. Third, I was surprised by how little publicly available data there were on Indian gaming. You could get data on other gaming segments, but not much on Indian gaming.

After that project, I set out to learn more and to try to fill that data void. The result ended up being my annual Indian gaming study, which is now in its 14th annual edition. Along the way, I conducted a wide variety of consulting projects for participants in the gaming industry, including gaming operators; gaming machine manufacturers and other suppliers; investors; and tribal, state and federal governments. I've conducted other scholarly research projects as well.

2. Recently, your economic consulting firm, Nathan Associates, was named as one of the top consulting firms to watch by Casino Journal. Tell us about that.

We are honored to be recognized in the September issue of Casino Journal for our economic research and analysis of gaming industry issues. I feel that we've built a strong reputation for objective, insightful and comprehensive economic research and analysis of the gaming industry, and that is an asset for our clients.

It was also nice to see that some of our recent scholarly work garnered the attention of Casino Journal. This included the Indian Gaming Industry Report, which has been cited by the U.S. Supreme Court and is now in its 14th edition. Also noted by Casino Journal was our groundbreaking study, "An Empirical Framework for Assessing Market Saturation in the U.S. Casino Industry," which was published in the June 2016 issue of Gaming Law Review and Economics, a leading peer-reviewed gaming journal. In this paper, affiliates Clyde Barrow and David Borges and I identified and compared several metrics for measuring market saturation, applied them to markets that have been widely acknowledged as being saturated, and proposed them as benchmarks for evaluating saturation in other markets. This approach has now being used to assess existing gaming markets, as well as potential expansions.

3. What do you make of the development of nongaming amenities at Indian gaming facilities?

This has certainly been an increasing trend at Indian gaming facilities nationwide. Many tribal casinos have learned over time from the experience in Las Vegas and other commercial gaming markets. Many gaming facilities have introduced or expanded amenities such as hotels, spas, restaurants, night clubs, convention/meeting space, entertainment venues, shopping, and golf courses. Interestingly enough, the growth rate for nongaming revenue was more than double that of gaming revenue in 2014. In many cases, these new amenities have helped draw people from further distances, get customers to stay longer, and draw new types of customers. And they have helped the facilities better compete in markets with competition.

4. What are some of the bigger challenges facing the gaming industry today?

The continuing impact of the sluggish economy has definitely been a challenge in some parts of the country. Meanwhile, there has been an increase in competition in many places. In some cases we have even seen markets get to a point of saturation, whether from expansions at existing casinos or introductions of new casinos, both Native American and commercial. Looking ahead is the challenge of attracting younger generations, which at this time are less interested in traditional casino gambling. Related to that is the development of new technologies and games to attract younger players while maintaining existing customer bases.

5. After all your years of conducting research and analysis of Indian gaming, what would you say are three of the most compelling things you've found?

It is tough to narrow it down. But here are three of the most interesting findings from the Indian Gaming Industry Report:
1. Gaming revenue at Indian gaming facilities on a nationwide basis has experienced remarkable growth over time. Gaming revenue at Indian gaming facilities has increased nearly 300-fold since the passage of the IGRA, and over the past 13 years it has more than doubled. This points to the tremendous success of Indian gaming.
2. Despite the success of Indian gaming on the whole, there is a great disparity in its performance across facilities, tribes and states. In 2014, the growth of Indian gaming varied significantly across states, from a low of -9% to a high of +13%. Also, we see that a small proportion of gaming tribes generate a large proportion of total Indian gaming revenue – the top 6% of gaming facilities generate about 40% of gaming revenue, while the bottom 36% of facilities generate only 2%.
3. Despite the rise of Indian gaming over time, it isn't the fastest-growing U.S. gaming segment. Racetrack casinos (aka racinos) take that prize. In the aggregate, racinos grew at twice the rate of Indian gaming in 2014. In fact, racinos have outgrown Indian gaming in 17 of the 21 years that racinos have been in existence. Racinos have also outgrown the traditional commercial casino segment in 20 of its 21 years. This rapid growth of racinos has come about as many states have been able to more easily gain approval for gaming at existing racetracks than introduce new gaming. Interestingly enough, some of the growth at racinos in some states has come at the expense of other gaming segments, particularly cannibalization of existing commercial casinos and Indian gaming, especially in the Northeast region of the country.

To view the Indian Gaming Industry Report, for more information, or to order a copy of the Indian Gaming Industry Report, visit Casino City Press at this week's Global Gaming Expo at booth #4107, contact Lisa Pasquarosa at (617) 332-2850 x131 or lisa@casinocity.com, or visit the publication's website at www.indiangamingreport.com.