It's not only Indian casinos. The entire gaming industry is being watered down with the proliferation of casinos in virtually every state. It's still one big pie, but the slices are getting smaller.
The same situation exists here in the East with gambling now close by to Atlantic City in Pa, NY,CT,and Del.
Only last month it was reported that the 9 slot parlors in Pa, outgrossed all of Atlantic City in slot revenue.

I actually think the opposite holds true, A casino that wants to either maintain or increase their player base and income is going to have to think more about a little less profit and how to keep their customers happy.
Take a look at the multi million dollar salaries some casino executives are getting and ask yourself, can they really afford to pay these

Read the story in todays Las Vegas Review Journal where the CEO of Harrah's, Gary Loveman received a39.6 million in compensation for 2009 compared to 15.4 million in 2007 yet Harrah's is 23.1 B I L L I O N in debt and at the risk of default.
That, is where a good part of the problem lies