By various accounts, Indian Gaming enterprise proceeds now exceed Las Vegas revenues or are trailing close behind.  Furthermore, the rate of growth of Native Americans casinos versus Las Vegas is significantly better and likely to remain so.  After all, the Native Americans are spread out across the country and own land and have a protected gaming model in the majority of possible locations.  For the most part, the tribes now know how to operate the businesses too and are able to make educated and better decisions without the help of outside consultants.  In other words, they make more and more profit too from operations.  I’m sure that they are among the state of the art in casino management worldwide now, witness the Seminole tribe purchasing the Hard Rock operation.  Talk about Private Equity, the Native Americans have not only got their own money but their own sovereignty too.  Now I read that a tribe is ready to build a huge casino at the California/Nevada border which will interdict California gaming traffic before the border is reached.  In addition, a tribe owns thousands of acres (I remember over 25,000) surrounded by California’s Mojave County which is adjacent to the Colorado and working to get into the future competitive mix.  The tribes each have a unique culture too which allows variety in the presentation to customers, turns out that that advantage has worked nicely for the casinos.     

Reno has suffered mightily from the interdiction of traffic on all sides along the arterials leading into town.  The mass of Reno does not and will not approach Las Vegas, but the result here may be a precursor of things to come in Clark County/Las Vegas.  When Kirk Kerkorian proposes to isolate Bellagio from MGM and join Wynn’s and The Venetian in a big three high rollers concentration, he may be telling us something.  He doesn’t tell us all, but his exclusion of the MGM development interests may also be telling.  I think that he will be in a position to stretch MGM then worldwide aka Marriott and Hilton in a new generation/regeneration of the upper-end hotel business.  Franchises, licensing and management fees will be key there.  Sands (The Venetian) and Wynn are big time in Macau and Sands has won in Singapore.  It is after all the age of Asia with China and India which provide 40% of the world’s population as the prime movers.  It will be interesting to see what happens to Harrah’s once the acquisition is done say year end.  My guess is that Apollo will do a Blackstone/EOP property disposition program and Las Vegas will have a wider ownership with many international property-specific players.
But returning to the Native Americans, it is clear that the Native Americans are successful business people now that they are entitled as they deserve.  The tribes have diversified and their enterprises are also among the leaders in oil and gas, natural resources and industrial development as logical first steps.  I think it will be harder to compete in gaming for other domestic operators unless there is a Wall Street component to those operations.  The entrepreneurs of the gaming industry’s future in the united States will be the Indians both from a permitted basis and from the strength of their management ability.    




Be Sociable, Share!