21 September, 2023

E. Sequoyah Simermeyer: Substantial growth within Indian gaming

E. Sequoyah Simermeyer, Chairman of the NIGC, reflects on Indian gaming's highest revenue figures to date.

This year’s historic revenue reflects the resiliency of many tribal gaming operations, and how tribal gaming continues to rebound and remain strong. Tribal governments and the operations they license continue to explore new and innovative ways to expand and deliver world-class experiences in order to cultivate sustainable economies. In my travels I’ve seen how tribes across many regions have taken a comprehensive approach to improving business operations, for example, incorporating evolving technology like mobile gaming to enhance both player experience as well as the bottom line.

Across the Indian gaming industry, tribes pursue economic sustainability through gaming by relying on the robust regulatory reputation for which Indian gaming is well known, and made better when supported by effective and efficient measures. As we consider the past two-plus decades of gross gaming revenue (GGR) growth, change has been constant, and the National Indian Gaming Commission (NIGC) has provided the complimentary regulatory environment to sustain such growth.

The FY2022 GGR is the highest in Indian gaming history, growing to $40.9bn. Seven of NIGC’s eight regions showed an increase over FY2021. The overall FY2022 GGR increase was $1.9bn, about 5% higher than the historic FY2021 GGR of $39bn, as operations emerged from the pandemic. It is important to note the year-over-year GGR change by region should not be used as a direct indicator of the local economy in any specific region. Many other factors could have an impact on the GGR at the regional level, such as new gaming operations, expansions or renovations to existing operations, temporary or permanent closures or changes in a gaming operation’s fiscal year.

For those who may not be familiar, the GGR figure is an aggregate of revenue from 519 independently audited financial statements of 244 tribes across 29 states. An operation’s revenue is based on the amount wagered minus winnings returned to players. It does not reflect earnings before salaries, tribal-state compacts and operating expenses. If you’re interested in learning more about regional performance and other comparisons to FY2021, you can download the FY22 gross gaming revenue report from the NIGC website.

Strategies for success, supported through efficient and effective regulation

NIGC works closely each year with more than 5,000 regulators to help each tribe prepare for challenges to their unique strategies for success. And from a regulator’s point of view, when these strategies are synchronised with lawmakers’ policy objectives it’s reasonable to assume record success, like this year’s $40.9bn GGR, is more likely to occur. This success directly relates to how tribal regulatory professionals execute their duties day-in and day-out. Cultivating this regulatory role requires collaboration and support for the tools and training that will focus regulatory capacity around effective and efficient regulation.

Insight into Indian gaming’s revenue helps to inform the public’s understanding of Indian gaming’s impact and can serve as a reminder to regulators about the importance of efficient and effective regulations

Effective and efficient regulation accounts for the shared interest held by governments, consumers, and industry stakeholders to protect gaming assets. It also can serve to honour tribal governments’ sovereign authority, recognise the cross-jurisdictional effects of gaming regulation, protect Indian gaming’s decades-long reputation for integrity, support responsible industry innovation, and promote Indian gaming’s continued potential for a positive and sustainable impact on regional economies and tribal governments’ self-sufficiency.

As tribes continue to execute and shape a strategy for success in the face of new and emerging technology, their ability to adapt has been critical. The industry needs to be acutely aware of the increasing complexity of cyber threats as Indian gaming grows in its application of sports betting, virtual wallets, and mobile gaming. As tribes and their operations continue to chart a path forward in these growing areas, the regulatory community can continue its role in ensuring confidence in tribes’ vigilance for safeguarding their operations.

New technology uses create potential new opportunities for well-regulated play. NIGC stands ready to provide technical assistance and regulatory tools necessary to prioritise compliance, and to protect the valuable resource gaming represents to many communities. For additional information on how NIGC is keeping up with these and other challenges and changes, please view the Agency’s annual report.

Indian gaming’s growing support for technological innovations

In turning its attention to technology, NIGC has learned that while technology may pose threats to tribal operations, it also presents an opportunity to promote more efficient and focused regulation. Whether a threat or an opportunity, technology provides tribal lawmakers a reason to articulate more focused and updated oversight objectives, to design more multi-year budget planning strategies, and to demonstrate the Indian gaming community’s dedication to innovation and support for sustainable industry growth.

The investment by industry stakeholders in technological advances can be driven in part by innovations to solve challenges that otherwise limit opportunity for growth. From its national regulator’s perspective, NIGC’s report on the Indian gaming’s gross revenue trends can be informed by knowledge about the support for technological advances in the industry.

Although NIGC’s GGR Report does not announce significant costs that contribute to the net revenue values for Indian gaming, it is noteworthy that in recent years tribes are deciding to increase investments in technology. The historic FY2022 GGR may be due in part to Tribal governmental gaming’s dedication to reinvest into the technology trends and underscore the strength of tribes’ dedication to a sustainable future for Indian gaming.

As tribes continue to execute and shape a strategy for success in the face of new and emerging technology, their ability to adapt has been critical

Whether for market competition reasons such as new mobile or cashless systems targeting a specific customer, or technology to achieve a regulatory objective articulated by tribal lawmakers such as responsible gaming monitoring or cyber infrastructure security, Indian gaming continues to invest in technology and continues to be an industry marked by constant evolution.

Considerations beyond $40.9bn

For over a decade and with the exception of the historic impact from unprecedented closures due to the Covid-19 pandemic, the overall national profile for Indian gaming’s revenue has shown consistent growth. In reaction to a number of circumstances, including the uncertainty from the pandemic, financing and reinvestment trends, as well as the influx of mobile and sports betting platforms in a growing number of jurisdictions, the Indian gaming industry continues to evolve. In order to help Indian gaming’s stakeholders plan for a sustainable future and to educate the public about the regulatory community’s dedication to keeping pace with industry trends, NIGC may, at some point, build on what it shares as part of the GGR report. But only if any future expansion in the annual reporting content is done in consultation and collaboration with Tribal governments.

Perhaps NIGC’s future year reports could consider indicators that explain trends in class II, or even class III gaming’s overall footprint. The report might also consider employment insights the NIGC deduces from the number of new licences for gaming enterprise officials based on tribal background investigations and licensing notices that tribes submit to NIGC. Future data may one day include a breakdown of revenues that include mobile offerings or other games yet-imagined, now possible through new technology and of course, effectively and efficiently regulated. Possible future additions of anonymous data in the GGR would likely assist an ever-changing industry, and aid tribal lawmakers and regulators in planning efforts to meet their respective missions.

Insight into Indian gaming’s revenue helps to inform the public’s understanding of Indian gaming’s impact and can serve as a reminder to regulators about the importance of efficient and effective regulations. As gaming tribes confront more opportunities for increasingly complex technology uses, and as each tribe charts its own path to recovering from the pandemic’s unprecedented impact, reporting tools such as the NIGC’s annual revenue report can help tribal lawmakers, regulators and Indian gaming operators to not only move beyond $40.9bn in revenue, but also increase collaboration to support the sustainability and value of Indian gaming’s regulatory framework.

As a reminder, the NIGC Division of Technology is available to assist with technical assistance (TA) and any IT related questions. For additional resources or to schedule IT or TA services, please contact [email protected] or visit the NIGC Division of Technology website.