“It will take time to get back to full gaming and non-gaming operations”

Dr Alan Meister Tribal operators post covid recovery economic consultant
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Dr. Alan Meister, CEO and principal economist at Meister Economic Consulting and a specialist in Indian gaming, discusses the panorama facing tribal operators in the US and cautions that a post-COVID recovery “will be slow and lengthy”.

 

Casino Review: With tribal casinos across the US in the process of reopening, what kind of shape will recovery from the business impact of coronavirus take?

Alan Meister: There is great uncertainty right now given we don’t know the trajectory or longevity of ongoing pandemic. What we do know is the recovery will be slow and lengthy. Note that even though many tribal casinos have opened, some have not. Those that have opened, they have only done so in a limited way, meaning sometimes reduced hours, only certain types of gaming, with reduced capacities, and without many non-gaming amenities.

It will take time to get back to full gaming and non-gaming operations. And that timing will vary from casino to casino, region to region.

CR: In your view, which segments and markets are better placed to recover and why?

AM: Tribal casinos in regions less affected by the coronavirus are better situated to recover faster. That aside, locals casinos are likely to recover faster as there is less travel involved.

Sports betting an unlikely panacea post-COVID: “It would not generally be a large profit generator for tribal casinos as it has low profit margins.”

CR: Regarding key concerns such as social distancing, what kind of impact will these measures have on revenues?

AM: Health and safety measures being implemented by tribal casinos, such as reducing the number of machines and table games in operation, have both positive and negative effects on tribal casino revenues. On the positive side, the measures are allowing casinos to open sooner than they otherwise would, thus allowing revenue to start to flow sooner. The measures are also helping patrons feel more comfortable coming back. However, on the negative side, the measures are definitely limiting facility capacities and therefore limiting revenue potential.

CR: Could legalised sports betting play a role in aiding a recovery for tribal operators?

AM: Sports betting can offer another dimension to a casino, expanding its offerings. However, it would not generally be a large profit generator for tribal casinos as it has low profit margins. Moreover, given that many tribal casinos are smaller and located in rural areas, there may not be sufficient demand to justify it being offered, or limiting it to a smaller offering, such as self-standing kiosks or integration into existing food and beverage outlets.


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