Gamblers lose more than $400 million to Potawatomi in past year
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Revenue at the Forest County Potawatomi Milwaukee casino increased by just 1.7% during the past 12 months as the tribe prepares to fight new competition on the Illinois-Wisconsin border.
"What we’re seeing is a flattening, increased competition, increased costs, supply chain delays, labor shortages," said Jeff Crawford, the tribe's attorney general. "All of this drives up your costs."
The Potawatomi casino at 1721 Canal St. won at least $415 million from gamblers during the 12 month period that ended June 30, according to Journal Sentinel calculation based on fees paid by the tribe to the city and county of Milwaukee.
In the previous 12 months, the tribe posted a net win of about $395 million in winnings, the records show. The net win is the amount of money that gamblers lose at slot machines and table games.
The casino revenue has allowed the tribe to pay its members dividends of about $70,000 a year.
"The Milwaukee casino market is maturing, but there is still room for future growth," said Gene Johnson, executive vice president at Victor Strategies, an Illinois gaming consulting company. "Tribal gaming is still growing. I expect the Potawatomi to continue to grow."
Wisconsin Indian casino revenue is confidential. However, Potawatomi gaming revenue can be estimated because the tribe pays the city and county of Milwaukee 1.5% of its net win. The payment was more than $5.9 million to each government for the year that ended June 30. The tribe paid the city and county $4.4 million in 2021.
The net win is the amount of money that gamblers lose at slot machines and table games and doesn't reflect revenue from restaurants, concerts and the hotel. The fee is assessed after the tribe pays the state about $20 million.
The increase in Potawatomi revenue lags that of other tribal and Las Vegas casinos.
The nation's 519 Indian casinos raked in $40.9 billion in their last fiscal year, according to the National Indian Gaming Commission. That sum was 4.9% greater than the previous year's total of $39 billion.
Gaming revenue at Nevada casinos increased 10.5%, going from $13.4 billion in 2021 to $14.8 billion last year.
"Las Vegas is doing well," Johnson said. "Regional casinos are having a harder time."
Times may be getting tougher for the Potawatomi as several new competitors will soon be opening in Chicago's downtown; Waukegan, Illinois; and Beloit in coming months.
"I don’t think anyone was anticipating the massive expansion of gaming in Illinois," said Crawford, the tribe's attorney general. "Obviously it's something we’re paying attention to."
The Chicago casino, which is expected to open next month "will definitely impact the Wisconsin market," said Grant Eve, who follows the gaming industry for Wipfli, an accounting and consulting firm.
To combat increased competition for the recreational dollar, the tribe last year announced plans for a $100 million renovation that includes adding 1,800 slot machines, a new bar with 28 bar-top “slot seats,” and a new restaurant. The renovation also adds room for high-limit gamblers, frequently known as whales, that will feature a craft bar, a gourmet kitchen featuring a brick oven and a stage for live performances.
This year the casino opened its sports book operation.
"Sports betting is high revenue, low margin" for the house, Eve said. But, he added, offering the ability to place bets on sporting events is a good draw for young men, who may stick around to play the slots or a table game such as craps or blackjack.
While Illinois casinos generally are smaller than the Potawatomi casino, the number of video gambling machines in the state has exploded. There are more than 8,300 licensed video gaming locations operating more than 46,000 slot and video gambling machines across the state, according to the Illinois Gaming Board.
In addition, several of the tribe's competitors are owned by giant companies such as Bally's.
Add to that the Menominee tribe's never-ending effort to place a casino in Kenosha. The Menominee tribe is teamed up with Hard Rock International in its latest effort to open a casino in Kenosha.
"The big concerns are we can we grow our revenue in this competitive market," Crawford said, noting that some of the tribe's Illinois competitors are owned by giant companies with deep pockets.
"A good number of these entities make Potawatomi look like a small operation," Crawford said. "We're kind of like a mom-and-pop operation compared with the big boys."
A mom-and-pop operation that won about $800 million at slots and table games in the past two years.
