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March 26, 2023

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Chips still stacked against cardrooms

Industry in Washington sees first revenue spike since 2005, but future remains bleak

By , Columbian Small Cities Reporter

After nearly a decade of plummeting revenues, Washington’s cardroom industry saw its first glimmer of new growth last year.

Figures recently released by the Washington State Gambling Commission show the industry’s net receipts increased 1.1 percent in 2014, going from $212.8 million in 2013 to $215.2 million last year. The change represents the first time since 2005 that the ailing industry has enjoyed any kind of growth.

The $2.4 million increase may not sound like much, but at least it was something — and it caused industry experts to scratch their heads about the sudden shift, said Dolores Chiechi, the executive director of the Recreational Gaming Association.

“I think it came as somewhat of a surprise for most,” Chiechi said. “I’m not sure if anyone can put their finger on some of the whys. It’s hard for me to pin that down.”

To put the situation in perspective, last year’s net receipts still fell about $12 million short of the 2001 mark. And with the growing push to raise the minimum wage to $15 an hour, Chiechi said the future looks bleak for the industry.

John Bockmier, a public affairs consultant who represents La Center’s three cardrooms, said the slight uptick may just be a reflection of an improving economy, and it’s too soon to tell whether the growth will continue.

“I see the economy, you know, signs out there that it’s starting to come back,” Bockmier said.

Despite the industrywide growth, Bockmier said revenue is down this year for the local cardrooms.

“We haven’t experienced a big boost in sales. We’ve flatlined,” he said. “The concern would be that basically things have remained flat while the cost of business has increased.”

Costs continue to increase at cardrooms for labor, health care, food and other supplies, Bockmier said. Chiechi added that the businesses are also heavily taxed, with about 15 percent of their revenue going toward taxes.

The Legislature opened the door for house-banked cardrooms to do business in 1997, limiting the mini-casinos to 15 tables each. The rules also mandated that cardrooms couldn’t offer any electronic games, leaving them to compete with much larger, flashier tribal casinos.

“The technological advancement of the gaming industry is everywhere, and our industry is not allowed to offer those games,” Chiechi said. “We are hopeful that some change will occur that will sustain the jobs.”

As cardrooms continue to close across the state, Chiechi is skeptical that the small revenue spike points to the start of a new trend for the industry. Four cardrooms shut their doors in the last year, including Chips Casino in La Center.

Competition increased for La Center’s three remaining cardrooms in 2013 when the Oak Tree casino reopened in Woodland. Keeping the business afloat has been a struggle, though, and management runs a lean operation.

Today, Washington is home to 58 cardrooms — 49 of those are house-banked, putting them in line for stricter state regulations. The industry’s been in a steep decline since its peak in 2005, when Washington boasted 113 cardrooms, including 97 house-banked cardrooms.

That year, net receipts climbed to $302.6 million. The following year, Washington’s indoor smoking ban went into effect, a law that doesn’t apply to tribal casinos.

The cardroom industry continued to sink with the onset of the Great Recession. Meanwhile, the overall cash flow for gambling throughout Washington has increased each year, mostly due to skyrocketing revenues for tribal casinos.

Columbian Small Cities Reporter