It’s a good time to be a tribal casino in California.
The California Gambling Control Commission has a positive outlook on the California Indian Gaming Revenue Sharing Trust Fund for the third consecutive year.
Though revenue reports from California tribal casinos are not available, the state of the RSTF is a solid indicator of how gaming facilities in California are doing.
The latest report on funding the trust fund shows a big surplus. That surplus is even greater than in the past fiscal year.
What is the Indian Gaming Revenue Sharing Trust Fund?
The RSTF is a tax-shelter fund that receives an annual payment from the Indian Gaming Special Distribution Fund. The money in the SDF comes from 26 Native American tribes in California who have full gaming compacts with the state.
The RSTF has a quarterly obligation to pay out a total of $1.1 million to over 70 California tribes. The commission designates the funds to facilitate local governance and improve the quality of life of indigenous peoples.
Tribal groups must be limited-gaming, non-compact or non-gaming to be eligible. That means the tribes can operate no more than 350 gaming devices in the past fiscal year.
The California Gambling Control Commission is a trustee of the RSTF. It is charged with handling the payments. For the second consecutive year, there is more than enough money to meet the obligations.
Details of the commission’s report for FY2019-20
The commission issued its latest report on the status of the RSTF on May 19. The report states that there is a sizable surplus available.
The final numbers for the past fiscal year show revenue exceeded distribution by $45.5 million. The revenue report showed $124.7 million. Payouts totaled $79.2 million to 72 eligible tribes.
Those final totals were better than what the commission expected. Projections for the 2018-19 fiscal year showed a revenue of $120.6 million and a surplus of $41.4 million. The actual surplus turned out to be $45.5 million.
Projections for FY2019-20 are on par. The commission projects $121.4 million in revenues with payouts totaling $78.1 million. The surplus would be $43.3 million.
Although the current status of the RSTF is solid, it hasn’t always been this good.
History of annual shortfalls in the RSTF
FY2019-20 is just the third time since the creation of the RSTF that funds have been sufficient to meet obligations.
The commission began dispersing payments from the SDF to the RSTF in 2001. From that year through FY2016-17, payouts exceeded revenue.
In FY2016-17, 73 tribes were eligible for a total obligation of $80.3 million. Revenues only amounted to $64.8 million, however. The $15.5 million shortfall was made up by other money in the SDF as required by state law.
The commission credits renegotiated compacts with tribal groups as a reason for the improvement of the RSTF.
Updated tribal compacts increased funding
Since August 2017, the commission has negotiated 18 separate compact amendments with 17 disparate tribal groups. The result has been a tremendous increase in funds available for the RSTF.
Because of that success, the commission anticipates that a surplus for the RSTF will continue in the coming years. Barring significant changes to compacts, the estimates should prove true. That points to Indian casinos in California being fiscally sound.