State’s tribal gaming generates $7.8 billion in 2014
The California Nations Indian Gaming Association (CNIGA) has released its bi-annual economic impact study produced by Beacon Economics, a premier leader in economic research.
Beacon found that tribal government gaming continues to be a positive economic engine in the state of California. In 2014 the state’s tribal government gaming generated $7.8 billion in economic output.
Tribal government gaming spent $4.0 billion in goods and services which generated an additional $3.8 billion in secondary spending by vendors that supply casinos. Tribal non-gaming operations in California – the expenditures that tribal governments make in order to provide services to the tribe and community – generated an estimated $3.3 billion in economic output.
Year after year, tribal gaming and non-gaming activities generate an increasingly positive impact on California’s labor markets. For example, in 2012, tribal gaming operations supported approximately 56,100 jobs statewide. In 2014, tribal gaming operations supported about 63,400 jobs statewide. In 2012, tribal non-gaming operations supported approximately 14,800 jobs statewide; in 2014, tribal non-gaming operations supported around 21,300 jobs statewide.
Said Council member and CNIGA Chairman Steve Stallings, who is also a member of the Rincon tribal council, “The economic and labor impacts are felt in the local communities that surround tribal government gaming facilities. Across the state, ninety percent of those employed by tribal governments are non-tribal employees. Most of these facilities are in very remote and economically depressed areas and the casinos are some of the biggest employers in their regions. The salaries and benefits provided by our members and their facilities exceed market wages for the same labor pool in California.”
“In addition, the salaries and benefits provided by CNIGA members tribes exceed market wages for the same labor pool in the state,” Stallings added.
In 2014 Southern California tribal casinos generated an estimated $4.4 billion in economic output. Of that total, $2.1 billion came from secondary economic effects. Of the $4.4 billion in total economic output generated, $2.8 billion represented value added to the economy of Southern California, while casinos in the region generated an additional $1.8 billion in total labor income.
Tribal gaming and non-gaming operations serve an important role in state and local tax revenue. In 2014, tribal gaming generated $39.2 million in state and local tax revenues, while tribal non-gaming operations paid $80.3 million in state and local taxes. Employees and recipients of gaming expenditures collectively and individually contribute millions of dollars to each year to local sales, property and income tax revenues in California.
The report also noted that charitable contributions from gaming tribes and their casinos underwrote an estimated 542 jobs statewide and an estimated $137.9 million in donations.
Stallings praised the tribes for participating in the Beacon survey and analysis. “In the local communities where Indian casinos exist the public is supportive because of the integrity with which the tribes operate our casinos, work with local governments, and share the benefits of our enterprises with our neighbors. However, the Beacon Report is valuable because it gives the tribes and all Californians an overall picture of our very impressive industry and its collective impact on the state economy.”
Casinos in Northern California generated an estimated $3.2 billion in economic output, of which $1.5 billion represented secondary economic effects. Of the $3.2 billion in economic output these casinos generated $2.0 billion represented value added to Northern California region, while $1.4 billion represented wages and earnings for Northern California workers.
In the San Diego area the tribes have earned a reputation for keeping promises. The tribes have earned high ratings from neighbors and government officials, and at the same time underscore statewide statistics with strong employee numbers and expansion.
“The tribes made promises to California voters that we would use gaming revenues to become economically self-sufficient, create jobs, take out people off welfare, build modern governments that are responsible, and establish ourselves as good neighbors,” said Rincon Chairman Bo Mazzetti, adding, “This year’s 2014 Beacon report shows that we have not only kept our promises, but exceeded them by becoming one of the state’s major employers and important economic and government partners in our local regions.”
Rincon takes economic leap of faith
In 2011, the Rincon government took an economic leap of faith, betting $160 million that the stalled U.S. economy would recover and with it bring a healthy surge of growth in California’s tribal casino market. Rincon’s tribal council believed it was time to diversify the experience at their Harrah’s property, investing in a second tower of guest rooms, conference and entertainment center, outdoor pool and water play features and nine new dining and beverage specialty venues.
On April 2014 the tribe completed the second phase of the expansion and opened the new property with a name change to Harrah’s Resort So Cal. Rincon was the first tribe to begin to shape the future of tribal government gaming by expanding into the resort and food and beverage market, and the early decision to diversify has paid off. So did the 2013 $4.3 million investment Rincon made in construction of the Travel Plaza, featuring the only 7-11 franchise owned by the band, a Subway restaurant and Shell vehicle service station.
The 2012-2014 Harrah’s Resort remodel and new construction created 1,500 new jobs, $99.9 million in new income for San Diego workers, $104 million in goods and purchases, and $11.5 million in new state and federal taxes. During 2013, the resort and casino employed 1,520 annually, with a payroll including wages and benefits of $56.9 million. The band’s enterprises played a significant role in underwriting local businesses and kick starting the region’s economy with expenditures of $77.5 million for goods and services. Accounting for the ripple effect, Harrah’s expenditures flowing into the local and state economy were $254 million with tax contributions of $7.8 million.
The year 2016 was also very good for California tribal enterprises. Rincon has contributed to increases in North County jobs, tourism, entertainment, business, and meeting markets, and supported large and small business through purchases of goods and services. Harrah’s expenditures flowing into the local and state economy were $254 million with tax contributions of $7.8 million.
During 2016 Rincon saw growth in all areas. The government payroll was $8.3 million and infrastructure investments were $1.7 million. Rincon-owned Travel Plaza and 7-11 franchise has consistently ranked fifth among the region’s 97 7-11 stores in the region.
In addition to being the first tribe to diversify its economic base with a 7-11 franchise, the band also joined the microbrewery explosion, opening SR76Beerworks. SR76Beerworks represents another first – the first microbrewery owned by an American Indian tribe. Opened in December 2016, the brewery is named after the state highway, running parallel to the San Luis Rey River, which was once the home to Luiseno tribal villages. The trails created by the Luiseno villagers would eventually become the path of State Route 76, and, now great brewery suds named after travel destinations along the highway.
Other investments include partnering with unique and successful specialty small businesses, through Rincon’s First Nations Capital Partners (FNCP). To support a tribal economic diversification strategy, Rincon assisted in developing FNCP, a private equity fund organized in a partnership with the Colusa Indian Community and Wells Fargo Bank. The band shares results with the other partners. The portfolio now includes four robust companies manufacturing diverse products.
Able Card Company is a manufacturer of plastic cards for many applications like gift cards, casino cards, hotel room keys, and ATM cards. Everson Cordage Works manufactures high quality twisted twines and ropes for fishing, industrial, and commercial customers. Advance Adapters designs, engineers, and manufactures Powertrain and Four Wheel Drive after-market products.
According to Steve Stallings and Tribal Treasurer Jim Murguia, this strategy has multiple benefits. It creates revenue for the band, is insured through a credible financial institution, and supports growth of small to medium-size businesses with an infusion of capital.
“There are many solid, sustainable, growth oriented businesses that get overlooked because they may lack glamour, but which are the type of products and businesses that are the foundation of the American economy,” noted Stallings.
Adhering to an established policy of sharing financial resources with neighbors through a program of philanthropic giving, the Rincon Band annually supports more than 250 non-profits and public programs annually. The band takes pride in the tribal services such as the fire department, paramedic, and ambulance services that also respond to calls from neighboring communities. Every day, every minute the availability of these services is saving lives and improving public safety in the county’s rural-inland neighborhoods.