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Tribal gaming emerged from the COVID-19 pandemic into an uncertain world.

The pandemic forced a contraction, then there was a big jump during the initial years of recovery. Now, things have started to normalize, making the landscape a little more predictable.

Nevertheless, spending on gaming comes from customers’ discretionary dollars. Since casinos rely on discretionary dollars, they can’t simply raise prices during periods of high inflation. Amidst high inflation, consumers’ discretionary spending is restricted, making it hard to predict revenue and profit and, therefore, harder to budget accurately.

This means they’ll need to focus on the things tribal casinos can do to protect already shrinking or much lower growth profit margins. Making the right moves in key areas — the regulatory landscape, technology advances and business — will differentiate successful tribal gaming organizations from those that will struggle.

A changing regulatory and financial landscape

Lowered discretionary spending is dictating budgets, so the focus has shifted toward adapting to regulatory changes and using technology for growth.

The expansion of sports betting across more states, alongside the potential growth of online gaming, presents large revenue opportunities. However, these opportunities are not enjoyed equally by all tribes. Different states compact differently with tribes on online gaming and sports betting, complicating the outlook for those in markets threatened by potential commercial sports betting or online casinos.

Tribal gaming organizations have historically gauged their financial health through direct gaming revenue, focusing on physical assets like casino floors, slot machines and hospitality facilities. Looking forward to 2025 and beyond, they’ll continue to rethink capital investments as interest rates start to come down.

New capital in tribal gaming is also going more digital, so tribal gaming organizations will need to determine the uncertain regulatory implications of gaming that happens outside of their sovereign territory.

Tribal leaders will also need to continue to innovate their approach to capital planning. Unlike traditional capital investments, which depreciate predictably over time, digital investments require ongoing updates, maintenance and frequent reassessment to keep pace with technological advances and regulatory changes. The gaming industry needs strategic planning for this type of dynamic investment, one that’s probably not supported by traditional financing models.

Innovative business strategies

While tribal gaming organizations have historically relied on expanding their physical casino spaces, these growth paradigms may not be enough to differentiate themselves financially. Instead, they will need to diversify into integrated entertainment experiences that cater to broader demographics and preferences.

Tribal gaming organizations are adapting their business models to include entertainment complexes that merge gaming with dining, shopping and cultural exhibitions, transforming traditional casinos into destination resorts. Beyond this, new digital tools are being used to enhance the customer experience and data-driven marketing to target receptive clientele.

To hedge against the costs of buying commercial properties, tribal casinos can look to partner with commercial casinos. This may seem counterintuitive, but partnering (especially in markets like California and Las Vegas) can protect market share, capitalize on sports betting income and otherwise boost profitability within regulated frameworks.

No future-looking discussion is complete without addressing AI’s impact. As in other industries, AI and data analytics can help tribal gaming operations become more efficient, better improve marketing and make the most of massive volumes of already-existing data.

Beyond AI, other technologies, like cashless payment systems and cloud-based ERP accounting systems, can reduce labor costs and improve operational efficiency. These moves highlight a broader shift towards optimizing technological integration and maintaining fiscal health in a competitive market.

Data rights in 2024

Jurisdictions in the gaming landscape are still fragmented. While some tribes have embraced digital transformation, others face regulatory barriers or resource constraints that limit their options.

When a tribal casino expands into online gaming, how do they balance physical and digital investments? Should they partner with commercial operators or build their own platforms? These questions become more complex when considering regulatory compliance and sovereignty rights.

Forward-thinking tribal gaming organizations are already:

• Evaluating their business models to include broader entertainment offerings.
• Building infrastructure for both physical and digital gaming experiences.
• Creating partnerships to share costs and maximize market opportunities.
• Developing player engagement strategies across multiple channels.
• Establishing clear frameworks for technology investment and maintenance.

Gaming technology changes rapidly, but that shouldn’t prevent organizations from making strategic choices. Some tribal gaming operations will thrive through innovative partnerships and digital transformation. Others risk losing market share by maintaining traditional operating models.

How Wipfli can help

In today’s evolving gaming landscape, success requires balancing traditional operations with digital innovation while navigating complex regulatory requirements. As the industry faces economic pressures and changing consumer preferences, organizations need advisors who understand both the operational challenges and strategic opportunities ahead.

Wipfli can help. Our tribal gaming industry specialists can help you evaluate business strategies, develop technology roadmaps, assess operational efficiency and navigate regulatory compliance. Learn more about our services for tribal gaming and government entities.