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CHART: The Extraordinary Rise Of Native American Casinos

Mar 11, 2013, 07:51 IST

When you think about gambling in America, the first thing that probably comes to mind is Las Vegas.

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But Las Vegas currently represents just 10 percent of U.S. gaming industry revenue. This is according to a new report from Bank of America Merrill Lynch.

Regional commercial gaming accounts for another 47 percent of the industry.

The remaining 43 percent: Native American gaming.

The Native American gaming story is particularly extraordinary in that it has grown into a $27 billion business from almost nothing in just 20 years.

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Here's a chart from a BAML:

Bank of America Merrill Lynch

Here's BAML on the industry:

Any which way you slice it, the U.S. casino industry has seen dramatic growth over the last 20 years. Over that time, commercial gaming revenues have grown at a +10% CAGR, from only $10 billion in 1992 to a peak of $37 billion in 2007 (see Chart 18). This dramatic growth has been driven by the combination of 1) the expansion of U.S. Native American gaming which makes up over 40% of the total industry but was virtually non-existent prior to 1990, 2) the expansion of U.S. commercial gaming to new states and jurisdictions, primarily in the Midwest and Mid-Atlantic, and 3) additional growth in Nevada and New Jersey driven by new casino-resort supply.

As you can see in the chart, gaming industry revenues dipped slightly in the wake of the financial crisis. However, those revenues have quickly come back.

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