Enterprise
“As on line casino revenues flatten, tribes will likely be searching for new enterprise alternatives in different industries.”
MASHANTUCKET, Conn. (AP) — When the COVID-19 pandemic shuttered Foxwoods Resort On line casino in Connecticut for 3 months in 2020, its house owners, the Mashantucket Pequot Tribal Nation, needed to reckon with a long time of relying closely on playing because the tribe’s fundamental income.
“The truth that the on line casino revenues went from thousands and thousands to zero in a single day simply absolutely reiterated the necessity for various income streams,” mentioned Tribal Chairman Rodney Butler.
The 1,000-member tribe has since expanded its efforts to get into the federal authorities contracting enterprise, making it certainly one of a number of tribal nations to look past the on line casino enterprise extra severely after the coronavirus disaster. Tribal leaders and tribal enterprise consultants say the worldwide pandemic has been the newest and clearest signal that tribal governments with casinos can’t rely solely on slot machines and poker rooms to help future generations.
In Michigan, the Match-E-Be-Nash-She-Want Band of Pottawatomi Indians, or Gun Lake Tribe, not too long ago introduced a 25-year plan to develop a whole bunch of acres close to its on line casino right into a hall with housing, retail, manufacturing and a brand new 15-story lodge. A non-gambling entity owned by the Little River Band of Ottawa Indians, additionally in Michigan, is now promoting “NativeWahl” burger franchises to different tribes after forming a 2021 partnership with Wahlburgers, the nationwide burger chain created by the celeb brothers Paul, Mark and Donnie Wahlberg.
Some tribes, with and with out casinos, have gotten concerned in a variety of non-gambling companies, corresponding to trucking, development, consulting, well being care, actual property, hashish and advertising over the previous decade or longer whereas others have been branching out extra not too long ago.
“Whereas enterprise diversification can include prices, its necessity grew to become clear in the course of the early phases of the pandemic, when tribally owned casinos have been shut right down to mitigate COVID-19 transmission and gaming-dependent tribes have been left with little incoming income,” in keeping with a brand new report from the Heart for Indian Nation Improvement on the Federal Reserve Financial institution of Minneapolis.
The report discovered that many tribes are more and more doing enterprise with the federal authorities, particularly the U.S. Division of Protection.
The Mashantucket Pequots’ non-gambling entity, Command Holdings, final 12 months made its largest acquisition up to now: WWC World, a Florida-based administration consulting agency that predominantly works with federal companies, together with the protection and state departments. WWC introduced in December that it had been awarded a $37.5 million contract supporting the federal Cybersecurity and Infrastructure Safety Company.
WWC World CEO Jon Panamaroff applauded the Mashantucket Pequots’ on line casino and hospitality enterprise however famous that it may be topic to the “ups and downs of the market,” making it essential to department out economically. A member of the Solar’aq Tribe of Kodiak, Alaska, he credited the Mashantucket Pequots’ tribal leaders with doubling down on diversification efforts in the course of the pandemic as a substitute of “shying away and attempting to hunker down.”
Butler mentioned the tribe hopes non-gambling revenues, together with from a deliberate household resort with a 91,000-square-foot (8,450-square-meter) water park that’s anticipated to open in 2025, will ultimately comprise 50% to 80% of the Mashantucket Pequots’ portfolio, offering “stability and certainty” when one other difficult occasion undoubtedly will occur.
“You consider the monetary disaster in ’08 and now COVID. And so, one thing’s going to occur once more,” Butler mentioned. “We’ve discovered from previous errors, and we need to be prepared for it sooner or later.”
Even earlier than the pandemic hit, some tribal casinos have been already going through aggressive pressures from the appearance of different playing choices, together with legalized on-line wagering on sports activities and on line casino video games in some states. On the similar time, conventional patrons of brick-and-mortar casinos are getting older.
“Tribal economies are at an inflection level as a result of gaming markets are maturing throughout the U.S.,” mentioned 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 on line casino revenues flatten, tribes will likely be searching for new enterprise alternatives in different industries.”
Terri Fitzpatrick, a member of the Sault Ste. Marie Tribe of Chippewa Indians in Michigan and the Michigan Financial Improvement Company’s chief actual property and international attraction officer, has famous “large progress” in non-gambling-related tribal companies during the last decade in Michigan. Most tribes throughout the state now interact in some type of financial improvement apart from casinos.
The pandemic, Fitzpatrick mentioned, actually highlighted the significance of such a method, given the monetary impression of COVID-19 on tribal colleges, well being care facilities, help for older adults, day care applications and different providers.
“It wasn’t a couple of lack of income,” she mentioned. “It was a lack of, ‘What we will do for our group and in our group.’”
The Nottawaseppi Huron Band of the Potawatomi in Michigan noticed its profitable on line casino shut down within the early months of the pandemic. However the monetary blow was blunted partially by the tribe’s non-gambling companies, together with a agency that’s concerned in drone improvement for the federal authorities and was deemed “important.”
The tribe’s financial improvement entity, Waséyabek Improvement Firm LLC, now has mapped out a plan to generate not less than one-third of the income wanted to help the tribe from actions apart from playing by 2040, its president and CEO, Deidra Mitchell, mentioned.
That doesn’t imply tribes are giving up on playing. Some are even increasing it. The playing and hospitality entity owned by the Mohegan Tribe in japanese Connecticut introduced this month it’s partnering with a New York developer to try to safe a New York Metropolis playing license and construct a proposed leisure district in Manhattan’s East Facet. In the meantime, the Chickasaw Nation in Oklahoma is a part of one other consortium that wishes to construct a on line casino and leisure advanced on New York’s Coney Island.
The Nationwide Indian Gaming Affiliation reported in August that $39 billion in gross playing income was generated in fiscal 12 months 2021, essentially the most in tribal playing historical past. That determine, which accounts for 243 tribes throughout 29 states, elevated 40% over the earlier 12 months.
Patrick Davison, vp of Native American gaming and finance at PNC Financial institution, mentioned he’s been working with tribal officers who nonetheless need to construct casinos but in addition need to keep away from overbuilding. He mentioned the pandemic was “an actual eye-opener for tribes” as officers think about their tribes’ futures within the playing enterprise.
“There’s much more thought being put into it,” he mentioned.
