The Future is Bright!

Tribal gaming CFOs say they’re optimistic about 2023

By Grant Eve

In January, Wipfli surveyed chief financial officers (CFOs) from more than 20 prominent tribal casinos to gauge their outlook for 2023.

Here’s the good news:

Tribal casinos are financially stable

Over 70 percent of tribal casino CFOs say their financial stability is much higher today than it was five years ago. None reported deterioration.

With record revenues of over $39 billion reported by the National Indian Gaming Commission in fiscal year 2021, and revenue expected to be even higher for 2022, it’s likely that financial stability is stronger than prepandemic. This means that tribes are investing in their facilities and not transferring all the profits back to the tribal governments. Investments that have led to stronger financial stability include investments in technology, paying down debt and keeping larger cash reserves on hand.

Concerns are relatively minor

CFOs are trying to fund bold futures in a wild macroeconomic environment— yet they reported few major concerns. The ongoing talent war and rising labor expenses are their biggest worries. Cybersecurity may have ranked as a moderate concern in the survey, but once a breach occurs, it becomes a high concern, so ensuring proactive actions to address cybersecurity are critical. Otherwise, for the most part, CFOs feel prepared for the challenges ahead.

Most CFOs are optimistic

More than half of tribal gaming CFOs are at least somewhat optimistic about 2023. About a third are neutral about their business outlook.

What’s in their favor? Record-high revenue from the past two years that can help them overcome pricing hikes and labor shortages. The right incentives and marketing offers continue to draw guests in. And casinos still have efficiencies to gain through supplier agreements and technology.

Revenue is expected to rise

Despite inflation and rising costs, the majority of CFOs expect revenue to increase in 2023. By how much? Two-thirds of those polled think revenue could rise between 1 percent and 10 percent.

With a lot of unknowns going into 2023, it’s great news that CFOs expect a continued increase of revenue in 2023. This will help offset inflation from 2022, as casinos cannot simply raise prices like many other businesses have done to combat inflation.

While there is no doubt about the fact that some uncertainty is coming for the remainder of 2023, there is also no doubt that CFOs of large tribal gaming operations are dialed in on the trends for 2023 and plan to act appropriately as we face new challenges.

Grant Eve is a partner for Wipfli specializing in gaming and hospitality. He has several years of experience working with tribal gaming organizations and commercial casinos throughout multiple jurisdictions. A recognized leader in the gaming industry, Eve has authored numerous articles and interviewed in many industry publications.