LAS VEGAS (AP) - Picture a luxury sedan, tooling peacefully down the highway. That would be the U.S. commercial casino industry, with 2005 gross revenues of almost $30 billion.

But what about the tricked-out, turbocharged pickup in the sedan’s rearview mirror, closing in quickly? That would be Indian gambling, which pulled down almost $23 billion in gross revenues in 2005, according to statistics compiled by Los Angeles economist Alan Meister.

Once dismissed for running second-rate rural bingo halls inside big tents, gambling tribes in the past decade have dramatically narrowed the gap on commercial casino operators.

Revenues for Indian gambling grew more than 400 percent from 1995 to 2005, while the mature vehicle of commercial gambling grew by less than half that.

The corporations and wealthy individuals who, 20 years ago, had little competition for the gambling dollar, today have only to glance over their shoulders to see a competitor closing in.

Forty percent of the nation’s 561 federally recognized tribes offer gambling in some form.

Despite widespread Indian success, Frank Fahrenkopf, president of the American Gaming Association, doesn’t expect tribes to dominate the industry. But he does see trouble in markets “where you have Native (American) and commercial gambling going head to head.”

A prime example is the Reno-Tahoe industry versus the California tribal casinos along highways 80 and 50.

Indian gambling dates from 1987, when the nation’s top court gave tribes the green light, in a landmark decision called California v. Cabazon Band of Mission Indians.

Formats range from truck stops on the reservation, with only a couple rows of slots, to full-fledged resorts that boast hotels, spas, golf courses, cinemas, water parks, large concert facilities, child care for young guests and tribal museums.

“The tribes that are in big markets are really building world-class facilities,” says Ernest Stevens Jr., chairman of the National Indian Gaming Association, a nonprofit trade association headquartered in Washington, D.C.

Foxwoods Resort Casino, owned by the Mashantucket Pequot Tribal Nation in Connecticut, claims to be the largest casino in the country. It has 340,000 square feet of gambling space divided among six “casinos” on a single resort property, with 35 eateries.

The Grand Traverse Resort & Casinos in Michigan, owned by the Grand Traverse Band of Ottawa and Chippewa Indians, has a spa and fitness center that occupies more than 50,000 square feet, and the Viejas Band of Kumeyaay Indians has bundled an outlet mall with its Viejas Casino east of El Cajon, Calif.

“To be fair, those (large tribal resorts) are the exceptions rather than the rule” in Indian gambling, Fahrenkopf says.

Indian casinos mostly lack the concentration of facilities that makes Las Vegas exciting, he says. But most tribes just want to emulate Las Vegas in profitability.

“Indian gaming is distinct,” says Ernest Stevens Jr., the trade association’s chairman and a member of the Oneida Tribe of Wisconsin. “The tribes weave their own unique cultures into the facilities they build and the experience that they offer to visitors. ... Our special attraction for the public is that we are not Las Vegas.”

One key Indian trend, however, mirrors Las Vegas. Tribes that started out with small, bootstrap casinos are continually reinvesting profits to evolve into what hospitality consultant James Klas calls multiple-amenity resorts. Lodging is often part of early expansion.

“The hotel is an expensive addition, but probably the single-most lucrative addition” for getting visitors from farther away to stay longer and gamble more, Klas says.

Some Indian casinos will remain “grind joints,” slang for a casino without lodging that caters to small play by local players, because their geographic isolation limits their market. But tribes have stampeded to add hotels since the 1990s, whenever traffic projections and the tribal budget allow.

Klas measures a 70 percent increase in tribal casino hotels in the past five years, from 82 hotels in 2002 to 139 expected by the end of 2007.

Twenty California tribes have hotels at their casinos. Arizona, Michigan, Minnesota and Wisconsin each have 10 or more tribal casinos with hotels, according to Klas’ Minnesota-based firm, KlasRobinson Q.E.D., which serves tribal clients.

As a template, Klas cites the growth pattern of one of those clients, Shakopee Mdewakanton Sioux’s Mystic Lake Casino near Minneapolis.

The tribe entered gambling in 1982 with a bingo operation housed in “a series of doublewide trailers that were literally welded or glued together, with the walls cut out,” Klas says.

Today the Shakopee run a resort with a high-rise hotel and casino, golfing and a busy calendar of performances by outside entertainers.

Some tribes choose to partner with a nationally recognized hotel organization. Hyatt, Hilton, Ramada and Sheraton are hotel brands that have forged ties with tribal casinos. For a price, a franchise stamps a tribe’s hotel with an image and delivers a marketing-reservation system.

Harrah’s runs hotel-casinos for tribes in states including Arizona, California, Kansas and North Carolina. But over the years, Harrah’s has lost contracts for tribal gambling projects or properties in Indiana, Michigan and Washington. In July it is scheduled to return operation of a casino near Topeka, Kan., to the owners, the Prairie Band Potawatomi Nation.

As tribes gain experience and confidence, many cut loose the outside management companies they hired to launch and run the gambling side. Tribes want to decrease operating expenses and better control their own destinies, according to Timothy O’Dell, who is a partner in a Montana financial firm that does auditing and consulting for numerous tribes.

“At the five- to nine-year stage of the (tribal casino) life cycle, management companies were long gone,” O’Dell says. “There are maybe a dozen management companies left, at best,” due to decreasing demand from tribes for outside operators.

Successful casinos are paying for essential reservation services such as fire and police departments as well as housing, health care and education. The extra income unifies a tribe if “they’re using their revenue effectively, in an evenhanded manner,” says Kevin Gover, a Pawnee and law professor at Arizona State University.

Once essential services are met, tribes that have bulked up with gambling-derived dollars tend to flex their business muscle off the reservation, too.

Three Fires, an economic partnership of three prosperous gambling tribes, will soon debut a Marriott Residence Inn in Sacramento, Calif. Four Fires, the same coalition plus a fourth tribe, built, owns and operates a Marriott Residence Inn in Washington, D.C., which opened in 2005 near the Smithsonian’s National Museum of the American Indian.

In March, the Seminole Tribe of Florida purchased a global hospitality empire, Hard Rock Café International, for $965 million. It already owned two casinos affiliated with the Hard Rock brand, plus five smaller gambling venues without the affiliation. The deal covered Hard Rock hotels and restaurants, but excluded the Hard Rock Hotel in Las Vegas.

A California gambling tribe is trying to buy and reopen The Roadhouse, a small casino on Boulder Highway in Henderson. The maneuver would put an Indian casino near Las Vegas, the heart of the American gambling industry. Since 1995, the Soboba Band of Luiseño Indians has run a casino on its reservation in Riverside County, Calif.

But gambling also disrupts tribes, says Gover, who was assistant secretary for Indian affairs in the U.S. Department of the Interior from 1997 to 2001.

Disputes about who belongs to a tribe, let alone who should lead it, now get attention.

The size of a tribe affects the size of payouts, if a tribe is distributing some of its gambling profits to individual members. About one-third of gambling tribes do so, according to 2001 data from the National Indian Gaming Commission, a federal regulatory agency.

“Before, who cared what your share of nothing is?” Gover says. “I think the pace of these disenrollments has picked up.”

Disenrollment is the review process by which a tribe decides that a person who has claimed membership does not qualify.

Casinos in California and Oklahoma, where tribes are plentiful, periodically fight for exclusive deals with entertainers or vendors, and tribes also wrestle for casino locations.

But some gambling tribes do joint business ventures. And when their rights come under attack, Indians generally unite, Stevens says.

“There’s a commonality of interest in terms of sovereignty and tribal self-government, that has allowed for continuing cooperation even in the face of competition.”

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Information from: Las Vegas Review-Journal, http://www.lvrj.com