Wall Street sees the run of bad luck plaguing California's Indian casinos continuing for another year.

While the rest of the battered gamb-ling industry's troubles are starting to bottom out, that recovery won't begin in California until the second half of 2010, according to a report this week by New York credit-rating firm Fitch Ratings.

The Fitch report follows downsizing in recent months by two of California's largest casinos, Thunder Valley in Lincoln and Red Hawk in Shingle Springs.

While tribes don't report financial results, revenue at California's Indian casinos fell a combined 5.6 percent during the 12 months that ended last September, to $7.36 billion, according to the National Indian Gaming Commission. Revenue at all Indian casinos in the United States grew 2.3 percent during that time. The commission said it doesn't have more recent data.

The revenue figures don't cover what was probably the worst of the recession, the six months or so that began when the stock market melted down last fall.

The figures also don't include results from Red Hawk, which was opened last December by the Shingle Springs Band of Miwok Indians.

The company that manages the casino, Lakes Entertainment Inc. of Minnesota, has said that revenue from Red Hawk has been disappointing, although traffic has been strong. Lakes said employment at Red Hawk has been trimmed from 1,750 full-time equivalent positions when the casino opened to fewer than 1,500.

Thunder Valley laid off nearly 100 workers in the spring.

The overall gambling industry has been in a slump. Revenue at Nevada casinos fell nearly 14 percent in June, according to the state Gaming Control Board.

Fitch said California's casinos are getting hit especially hard because the recession has affected the state more severely than most other parts of the country.

"Recovery of employment and consumer spending in these regional economies (in California) will be hindered by lingering weakness in the residential housing sector, which continues to be a significant drag," the report states.

But the report says the long-term outlook for Indian gambling in California is strong.

Megan Neuburger, a Fitch analyst who co-wrote the report, said Northern California's growth prospects are probably better than for Southern California, where the market is more heavily saturated.

"In Northern California, there's a little bit more potential to grow the market," she said in an interview.

Even as they fight the recession, Northern California's casinos are expanding.

Thunder Valley is building a hotel set for completion next year. Lakes said it is talking to developers about a hotel adjacent to Red Hawk. And Cache Creek Casino Resort in Yolo County is working on an expansion of its hotel.