RubinBrown Gaming Stats 2013

EXECUTIVE SUMMARY

Introduction The Gaming Stats publication was developed to provide a consolidated comprehensive report on the United States gaming industry. It is the only report of its kind to report on both commercial and tribal casino revenues. The data utilized within this report was obtained from the National Indian Gaming Commission (NIGC) and the various state gaming regulatory authorities. A comprehensive listing of the respective state gaming regulatory authorities is included on the inside back cover. The qualitative data throughout this publication is a compilation of the knowledge gained through various trade publications, attendance at seminars and conferences, conversations with gaming industry leaders, and other external sources. General Industry Overview Gaming is back on-top as revenues climbed to an all-time high in 2012. Commercial and tribal casinos generated an estimated $65.8 billion in 2012, eclipsing the previous peak of $63.6 billion generated in 2007. Breaking the 2012 revenues down between segments, the commercial gaming industry generated $37.4 billion and the tribal gaming industry generated an estimated $28.4 billion.

While gaming revenue broke through the record set prior to the recession of 2008, both tribal and commercial casino operators continue to face lingering challenges from the recession and the reality of gaming expansion. Examples of the challenges can be seen from coast to coast as a California tribal casino was forced to close its doors after defaulting on its debt and a new Atlantic City casino required additional financing to fund its operations through the winter months, only to end up filing for bankruptcy in early 2013. In the heartland, existing casinos could not avoid the reality of casino expansion. In May, Ohio welcomed the first of four new casinos, becoming the twenty-third state to offer commercial gaming and the thirty-ninth state to have a casino within its borders. Further to the west, Kansas saw continued commercial gaming expansion with the opening of a Kansas City, Kansas casino. While these expansions boosted overall revenues, neighboring commercial and tribal casinos experienced declining revenues. Even though casino expansion is cannibalizing existing market revenues, the trend does not appear to be slowing down. With good reason, state legislatures continue to view gaming as an easy way to fill state coffers. In 2012, state gaming tax revenues increased by 8.5% or $661.4 million. The state gaming tax growth rate continues to outpace the overall gaming revenue growth, as new states have imposed gaming tax rates as high as 67.0% of net revenues.

10 Year Trend of United States Gaming Revenues

$68B

$65.78B

$66B

$63.62B

$64B

$62.92B

$62.81B

$62B

$60.17B

$61.10B

$60.78B

$60B

$58B

$55.37B

$56B

$54B

$52B

$50B

$50.67B

$48B

$46B

$45.52B

$44B

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

On the tribal gaming side of the business, the continued expansion does not appear to be slowing either. Tribes continue to see gaming as a vehicle to generate revenues and improve the overall quality of life within their respective nations. In 2012, six of the seven NIGC regions added a new casino and numerous tribes reinvested in their existing facilities by expanding the gaming floors, hotels, restaurants, or resort amenities such as golf courses and spas.

2 | 2013 Commercial & Tribal Gaming Stats