Recently released figures show that the U.S. tribal gaming industry enjoyed record-breaking revenue figures, making $41.9 billion. However, it was not all good news for the industry gaming profit margins dropped to 26% from 2022’s 30%.

The report covered 18 states and more than 130 tribal casinos and shows that the country’s tribal gaming market is still in a solid position despite a challenging economic market and the growing number of alternatives available to consumers.

Licensed land-based casino operations are the obvious alternative to tribal casinos. However, online casino gambling is also growing in popularity among American consumers.

Only New Jersey, Connecticut, West Virginia, Delaware, Pennsylvania, and Michigan currently have licensed online casinos, but offshore options provide gamblers in prohibitive states with an alternative.

Casino expert Andrew O’Malley who compiled Business2Community’s list of recommended offshore casinos explains their criteria for choosing sites to compete with existing gambling markets. He says that one of the main things consumers look for when gambling online is a casino with a lot of choices. A good selection of games makes it a more attractive prospect for consumers who might want to play different slots, traditional casino games, and other state-of-the-art new options.

A big difference between land-based casinos and online alternatives is the threat of cybercriminals. Online security is a major issue for all types of businesses and using licensed gambling sites with SSL encryption minimizes the risk of identity theft or account takeovers.

The convenience of online gambling is the biggest threat to retail gambling operations, as is the ability of online operators to offer a range of enticing bonuses and promotions. Reduced overheads of online operations make it easier for them to offer new and existing customers incredible deals for signing up and playing regularly.

24-hour customer service teams to support consumers with any issues they have, and a variety of payment methods including card, bank, and crypto have also helped online casinos appeal to new consumers.

Despite these growing threats to the tribal gaming industry, the growth shown in 2023 will help to ease some worries. The report also provided some valuable insights into tribal gaming operations.

One of the most significant findings was that slot machines generated the most revenue for tribal gaming operators in 2023. It also found that the sports betting market hasn’t had a significant impact on the industry, despite generating $119.84 billion in bets in 2023.

While revenue is on the rise, the figures show that profit margins have continued to slide for two consecutive years, dropping by 10% from 2021’s figure of 36%.

This will largely be down to the rising costs of running a physical gambling operation. The largest sources of spending include wages, promotions, and marketing. While online operations will also have similar outgoings, they will not have the additional property, energy, and maintenance costs that land-based casinos do.

While there are obvious positives, we could see some changes in how tribal casinos operate if they are to transform their declining profits.