Gaming still “drives the car” for the Indian Country economy, but tribes must look at diversifying their businesses for the future, the chairman of the Indian Gaming Association said today.
“The best thing for the future is learning from what we’re going through and continuing doing what we’re doing, but also looking to business beyond gaming,” Ernest Stevens Jr. said at a panel discussion opening the education sessions at the Global Gaming Expo in Las Vegas.
He spoke at “Tribal Leadership Session: A Review of 2022,” which coincided with the federal observance of Indigenous Peoples Day. Joe Nayquonabe, commissioner of corporate affairs for the Mille Lacs Band of Ojibwe in Minnesota, and Mark Macarro, tribal chairman of the Pechanga Band of Indians in California, were also on the panel. Victor Rocha, editor of Pechanga.net, moderated.
While the Indian Gaming Association reported a record $39 billion in gross gaming revenue nationwide for fiscal 2021, Stevens said the number might be “skewed,” because of federally approved COVID recovery funds and a troubled U.S. economy. “It truly is a crisis that in spite of how the numbers are reflected today, we’re still fighting our way through,” he said
Nayquonabe said traditional casinos remain essential, but tribes have been “completely clobbered” in the big-tech portion of gaming. “It’s going to be very rare than an Indian Country company is able to build the necessary resources to participate” in that area. He also said that without sports betting, gaming revenue in the St. Paul, Minn., region was down 13 percent from the pre-COVID year of 2019.
He said that among a litany of challenges Rocha cited – the effects of the pandemic, the war in Ukraine, inflation, changing job market – tribes can control only one: employment.
“This reckoning that we’ve had with our line-level employees is something that’s been coming for a really long time,” he said. An employee shortage was predictable, as Baby Boomers age out of the job market.
“A lot of the response for us has been to figure out how we can start to pay better and how to rebalance our benefits strategy. A Boomer workforce has a very high reliance on benefits, where a younger workforce has much more pressure and much more demand on wages. We’ve already been making changes from that standpoint, but the pandemic really accelerated a lot of things.
“There’s just a ton of other stuff” to pursue within and beyond gaming, he added, including a pivot to a “more experiential product” in the tribes’ hospitality programs.
Macarro recalled how tribal operators learned from the Great Recession of 2008, when the gaming industry was growing. Until then, running casinos was “easy money,” he said. “(The recession) forced the tribes to become entrepreneurs and businesspeople.” With that lesson in hand, “What we’re seeing now isn’t as bad as what it could have been” in the wake of the pandemic, the war in Ukraine, and an economic upheaval that includes many people switching jobs for better working conditions and pay.
Californians will vote next month on two proposals to legalize sports betting in the state. One has the backing of most tribes with gaming operations, Macarro said. The other is supported by commercial interests, including FanDuel and DraftKings. Polls indicate both propositions will fail.
Macarro said the FanDuel-backed proposal would carry “one of the most destabilizing” effects on California tribal gaming, because it would open all gaming to commercial operations. “Thank goodness that’s not going to happen this cycle,” he said. “But it’s going to repeat in two years.”
Rocha noted that tribes have purchased commercial casinos in Mississippi and Pennsylvania and said that on a global scale, tribes are in the “top handful” of developers. He said more such moves are likely in the future.
Stevens advised tribes to “get back to the basics. It comes down to the grassroots effort that we have in our communities. We have to take advantage of what we have. It might be slots, it might be food, it might be sports betting,” he said. He dismissed claims that Indian gaming revenues are not taxed.
“We are 100 percent tax based on the services we provide to our communities and when we’re down, our communities are down. So we have to get back to the bare basics of gaming, Gaming 101. People want to go to the casino, they want to eat at the casino, and they want to hang out at the casino.
“We have to provide a great atmosphere and we have to provide jobs.”
