Monday, March 06, 2023

Pandemic spurs tribes to diversify

SUSAN HAIGH Associated Press

MASHANTUCKET, Conn. — When the COVID-19 pandemic shuttered Foxwoods Resort Casino in Connecticut for three months in 2020, its owners, the Mashantucket Pequot Tribal Nation, had to reckon with decades of relying heavily on gambling as the tribe's main source of revenue.

"The fact that the casino revenues went from millions to zero overnight just fully reiterated the need for diverse revenue streams," said Tribal Chairman Rodney Butler.

The 1,000-member tribe has since expanded its efforts to get into the federal government contracting business, making it one of several tribal nations to look beyond the casino business more seriously after the coronavirus crisis.

Tribal leaders and tribal business experts say the global pandemic has been the latest and clearest sign that tribal governments with casinos can't depend solely on slot machines and poker rooms to support future generations.

In Michigan, the Match-E-Be-Nash-She-Wish Band of Pottawatomi Indians, or Gun Lake Tribe, recently announced a 25-year plan to develop hundreds of acres near its casino into a corridor with housing, retail, manufacturing and a new 15-story hotel.

A non-gambling entity owned by the Little River Band of Ottawa Indians, also in Michigan, is selling "NativeWahl" burger franchises to other tribes after forming a 2021 partnership with Wahlburgers, the national burger chain created by the celebrity brothers Paul, Mark and Donnie Wahlberg.

Some tribes, with and without casinos, got involved in a wide range of non-gambling businesses, such as trucking, construction, consulting, health care, real estate, cannabis and marketing over the past decade or longer while others branched out more recently.

"While enterprise diversification can come with costs, its necessity became clear during the early phases of the pandemic, when tribally owned casinos were shut down to mitigate COVID-19 transmission and gaming-dependent tribes were left with little incoming revenue," according to a new report from the Center for Indian Country Development at the Federal Reserve Bank of Minneapolis.

The report found that tribes are increasingly doing business with the federal government, especially the U.S. Department of Defense.

The Mashantucket Pequots' non-gambling entity, Command Holdings, last year made its largest acquisition to date: WWC Global, a Florida-based management consulting firm that predominantly works with federal agencies, including the defense and state departments. WWC announced in December that it was awarded a $37.5 million contract supporting the federal Cybersecurity and Infrastructure Security Agency.

WWC Global CEO Jon Panamaroff applauded the Mashantucket Pequots' casino and hospitality business but noted that it can be subject to the "ups and downs of the market," making it important to branch out economically. A member of the Sun'aq Tribe of Kodiak, Alaska, he credited the Mashantucket Pequots' tribal leaders with doubling down on diversification efforts during the pandemic instead of "shying away and trying to hunker down."

Butler said the tribe hopes non-gambling revenues, including from a planned family resort with a 91,000-square-foot water park that's expected to open in 2025, will eventually comprise 50% to 80% of the Mashantucket Pequots' portfolio, providing "stability and certainty" when another challenging event undoubtedly will happen.

"You think about the financial crisis in '08 and now COVID. And so, something's going to happen again," Butler said. "We've learned from past mistakes, and we want to be ready for it in the future."

Even before the pandemic hit, some tribal casinos were facing competitive pressures from the advent of other gambling options, including legalized online wagering on sports and casino games in some states. At the same time, traditional patrons of brick-and-mortar casinos are getting older.

"Tribal economies are at an inflection point because gaming markets are maturing across the U.S.," said Dawson Her Many Horses, head of Native American banking for Wells Fargo and an enrolled member of the Rosebud Sioux Tribe of South Dakota. "As casino revenues flatten, tribes will be looking for new business opportunities in other industries."

That doesn't mean tribes are giving up on gambling. Some are even expanding it.

The National Indian Gaming Association reported in August that $39 billion in gross gambling revenue was generated in fiscal year 2021, the most in tribal gambling history. That figure, which accounts for 243 tribes across 29 states, increased 40% over the previous year.

Patrick Davison, vice president of Native American gaming and finance at PNC Bank, said he's been working with tribal officials who still want to build casinos but also want to avoid overbuilding. He said the pandemic was "a real eye-opener for tribes" as officials consider their tribes' futures in the gambling business.


More than 5 million Native Americans live in the United States as members of 574 federally recognized and 63 state-recognized tribes. That number is projected to rise to 10 million people by 2060. A federally recognized tribe is a sovereign entity with a government-to-government relationship with the United States, as well as the rights of self-governance in such areas as tribal law and taxation.

About half of Native Americans live on reservations, of which there are about 326, comprising roughly 56.2 million acres. The 16 million-acre Navajo Nation Reservation in Arizona, New Mexico, and Utah is the largest, and the 1.32-acre Pit River Tribe cemetery in California is the smallest.

Stacker ranked the states with the biggest Native American populations and looked at some of the characteristics and conditions for each community, analyzing data from the U.S. Census Bureau’s 2019 American Community Survey one-year estimate. The U.S. Census Bureau’s definition of “Native Americans” includes Alaskan Natives but excludes Native Hawaiians.

Compared with other U.S. races, American Indians have a life expectancy that is shorter by more than five years. The suicide rate among American Indian youth is 2.5 times higher than among youth in the rest of the country. American Indians are 2.5 times more likely to experience violent crimes than the national average, and more than four out of five American Indian women will experience violence in their lifetimes. Holistically, these issues can be seen as symptoms of several larger issues, including access to social services, educational opportunities, nutritional food, and health care. Property rights pose more significant problems, insomuch as residents who don't have deeds to the land they live on struggle to build credit, which throws a significant barrier in front of upward mobility. Meanwhile, tribal lands are tough sells for franchises and other commercial developers that would bring jobs to reservations, as these companies are often resistant to negotiating contract terms under tribal law.

One effort to mitigate the aforementioned statistics came with the 1968 establishment of the American Indian Movement (AIM) in Minnesota, which advocated for sovereignty and rights. The group famously occupied the Wounded Knee battle site at the Pine Ridge Reservation for more than two months in 1973.

Looking ahead, Rep. Deb Haaland, a member of the Laguna Pueblo in New Mexico, has been tapped to head the U.S. Department of Interior for the upcoming Biden administration. She would be the first Indigenous cabinet secretary in the nation. Among her responsibilities will be the underfunded Bureau of Indian Education and the Bureau of Indian Affairs, the latter of which oversees 55 million acres of tribal land.


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