Tribal Gaming Update

Many companies in gambling's Establishment are finding that managing tribal operations is a lucrative source of new revenue

While MGM Mirage (MGG ) has raised its offer for Mandalay Resorts Group (MBG ), in a merger that would give MGM Mirage control of half the hotel rooms on the Las Vegas strip, other casino companies are looking outside Nevada for growth, frequently to Indian reservations. But it wasn't that long ago that the nation's gambling Establishment was on the warpath with the Indians. Threatened by tribal casinos that were stealing customers from strongholds in Las Vegas and Atlantic City, casino executives such as Donald Trump and Steve Wynn unleashed high-price lawyers and big-bucks lobbying campaigns aimed at heading the Indians off at the pass.

Now, companies that manage tribal casinos have become one of the hottest plays on Wall Street. The reason: Traditional gaming markets are mature, and the cost of building a new resort now tops $2 billion. The number of Indian casinos, meanwhile, continues to soar. Last year, the nation's 377 tribal casinos generated $15.9 billion in revenues -- more than Las Vegas and Atlantic City combined. That number should climb as states such as California, New York, Connecticut, and Rhode Island continue to find gaming on tribal land more palatable than traditional casinos.

This is a big economic development issue for many states. More here.