Minnesota's American Indian-run casinos offer more elbow room these days, Dan Moren has noticed.

The Becker, Minn., man visits casinos to play slot machines four to six times a month with his wife, Jan. On a stop at Grand Casino Mille Lacs in early February, "it seemed like there were more workers than customers. I practically had to chase the drink girl away," he said.

An evening of gambling may offer a welcome diversion from hard times, but casinos are finding they aren't immune from the recession, according to John McCarthy, executive director of the Minnesota Indian Gaming Association. He estimated that casino visits and revenues are down 3 to 5 percent since the slowdown took hold last fall.

"People aren't coming as frequently, and when they do come they're not spending as much," McCarthy said.

Nationwide, commercial casinos from Atlantic City, N.J., to Las Vegas are also facing a dramatic downturn in business. From November 2007 to November 2008, national gross gaming revenues from commercial casinos were down more than 3.5 percent, and the slump has continued into this year, according to the National Gaming Association.

Operators of several Minnesota casinos said they've trimmed payroll expenses by letting vacant positions go unfilled, and the tribe that runs Treasure Island Resort & Casino near Red Wing disclosed Friday that it has laid off "a small number of people." Expect fewer casino commercials for a while, too, as several operators said they've cut marketing budgets and are looking for other ways to tighten their belts.

If the recession deepens and significant cutbacks occur, that could prove a big blow to some communities.

Collectively, they are the state's 12th-largest employer, according to the Minnesota American Indian Chamber of Commerce. Several are the largest employer in their counties, and many reservations rely on profits from the 17 casinos in the state to help build schools and provide better housing, medical care, cultural activities and other services.

"I guess there are some recession-proof businesses out there, but we're not in that group," said Tad Johnson, special counsel to the Mille Lacs Band of Ojibwe, which operates Grand Casino Hinckley and Grand Casino Mille Lacs. "For a while we were getting a similar number of customers but they were spending less. Then, a couple weeks ago we started to notice that there were fewer people, too."

The band's two casinos attracted 4.9 million visitors last year, down 2 percent from 2007, according to spokeswoman Patty Dunn.

A lucky break

Putting dollar figures to the decline is difficult because the tribes don't share revenue numbers. The Shakopee Mdewakanton Sioux -- owner of the mammoth Mystic Lake casino in Prior Lake -- declined even to discuss the issue, citing longstanding policy.

However, one source of hard data -- revenue the Fond du Lac Ojibwe shares by special arrangement with the city of Duluth from the Fond-du-Luth casino -- is telling: The figures show a $211,000 drop in revenue in the third quarter of 2008, compared with the same quarter in 2007. The 12 percent decrease was the largest drop in at least several years, according to the city's figures.

Karen Diver, chairwoman of the Fond du Lac Reservation government, estimates that the late 2008 decline was more in the 5 percent range at the tribe's much larger Black Bear Casino Resort, which benefited from the completion last year of a $119 million expansion.

The recession came at a bad time for the tribe, but its leaders are congratulating themselves over their timing of another key decision: Unhappy with the refinancing terms lenders offered on the construction debt, tribal leaders liquidated much of the band's stock in September and paid the $112 million it owed on the expansion

"Three weeks after we paid off our loan, the market tanked," Diver said.

Avoiding layoffs

The decision puts the tribe in a good position, she said, to weather the recession while trying to avoid layoffs among its 2,000 employees, half of whom work in gaming operations. The tribe is the largest employer in Carlton County.

The tribes say their casinos face both the recession and new off-reservation gambling proposals by state lawmakers looking for more revenue. Several tribes have lobbyists in the Legislature resisting such attempts.

In a position paper circulated last week, the tribal council of the Prairie Island [Mdewakanton Sioux] Community, which operates Treasure Island, argued that expanding gambling in Minnesota's "mature gaming market" won't generate additional dollars. Instead, it would slow the progress tribes have made in becoming self-sufficient and improving rural Minnesota economies, the council contends.

"Whenever the state has looked for revenue over the past two decades, casinos have been in the mix," the Mille Lacs Band's chief executive, Marge Anderson, said last month in her State of the Band address. "We must make sure that we protect our funding and our casinos."

Larry Oakes • 1-800-266-9648