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Casino closures in Indian Country hit core tribal services

Tribal government gaming is at a standstill, amounting to $4.4 billion in lost economic activity.

 

Casino operations, like the Wildhorse Resort & Casino owned and operated by the Confederated Tribes of the Umatilla Indian Reservation, fund essential services for many tribal governments.
Wildhorse Resort & Casino

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When Bryan Newland was 16, he got a job as a dishwasher at his tribe’s casino restaurant. In college, he carried golf bags for patrons at the casino course. Now the chairman of Bay Mills Indian Community, Newland was forced to announce on Wednesday that the tribal government could no longer pay the 400 people employed at Bay Mills casinos, golf courses, and other tribal businesses and departments closed due to COVID-19.

“I understand that many of you are angry, frustrated and scared,” Newland (Ojibwe) told tribal members in a Facebook video address on Wednesday. “You’re not alone in those feelings. The Small Business Administration has abandoned us, and it is failing Indian Country right now.  

Bay Mills, a small community on the eastern shore of Lake Superior, had been paying tribal employees since closing down gaming operations on March 20 in response to the COVID-19 pandemic, Newland said in an interview. But the tribe’s businesses have yet to receive federal support, despite Congress passing the CARES Act, a stimulus bill of historic proportions that includes aid through the Small Business Administration, and $8 billion specifically for tribal communities. Bay Mills and other small gaming operations across the U.S. have so far been excluded from receiving funds. Instead, starting on midnight this Sunday, hundreds of Bay Mills employees will be placed on unpaid leave. Newland said the tribal government will continue paying for employee’s healthcare insurance at least through the end of May. “These are all people I grew up with, or their kids, or my family,” Newland said. “It’s felt pretty awful.”

Decisions like the ones Newland and the Bay Mills tribal council made this week illustrate the difficult choices tribal leaders throughout Indian Country are faced with over the next few months, as casinos remain closed. Tribal government gaming operations have been shuttered for more than two weeks, affecting 246 tribal nations that own 500 gaming facilities, according to an analysis by Meister Economic Consulting, the majority in the Western U.S. and Oklahoma. The casino closures have put 296,000 people out of work, resulting in $1.5 billion in lost economic activity for tribal governments. While many tribes have continued payments to employees when possible, the loss of profits will mean less funding for law enforcement, schools and other essential services, as well as scholarships, daycare and cultural programs.

“The real economic driver in Indian Country, and the way tribes and tribal governments have diversified economic development, has been through gaming,” said Anthony Broadman, partner at the law firm Galanda Broadman. “In reality and in theory, gaming is the tax base for Indian Country. And without it, tribal governments cannot afford to supply essential government services to members.”

The Confederated Tribes of the Umatilla Indian Reservation, owner and operator of the Wildhorse Resort & Casino, employs 1,700 tribal and non-tribal residents throughout Umatilla County in central Oregon, and distributes millions in charitable contributions annually.
Wildhorse Resort & Casino

To remedy current economic instability, tribal leaders are urging the Small Business Administration to give tribal government gaming businesses immediate access to the Paycheck Protection Program, which would apply to businesses under 500 employees and keep paychecks headed to tribal government employees. Under the interim SBA guidelines released last week, small gaming operations are excluded. This week, six members of Congress asked Congressional leadership and the SBA to remove the limitations to small gaming businesses, “given these dire and unprecedented times due to the coronavirus outbreak,” the letter read. “[SBA] relied on antiquated, discriminatory regulations that ignore today’s economic reality and the congressional intent behind the CARES Act,” Bill Miller, CEO of the American Gaming Association, said in a statement last week. The National Indian Gaming Association similarly condemned the SBA guidelines in a letter to member tribes, noting how drastically the guidelines will affect tribal governments finances. Newland said Bay Mills has been unable to get answers from SBA on the casino exclusions.

All this comes at a time when the COVID-19 pandemic is putting increased demands on tribal government services, Kevin Allis, chief executive officer at National Congress of American Indians, told tribal leaders in a March town hall. “Tribes are in a really unique position because a complete disruption of funding for their governments is devastating,” Allis said, later adding: “We will probably never see anything like this again in our lives.” 

Tribal leaders and federal partners are still consulting on how to disseminate the $8 billion in relief funding from the CARES Act. According to the National Indian Gaming Association, two critical issues remain: how the U.S. Treasury will allocate the distribution of funds, and what government expenditures will be considered “necessary” and thus covered by the act. It’s still a question whether the funds could be distributed equitably to those tribal nations most impacted by economic disruptions, or through other parameters like population size. So far the U.S. Department of Indian Affairs, U.S. Department of Treasury and tribal leaders have had two consultation meetings on how to distribute the funds. The act gives a deadline of April 26.

But some have been frustrated by the process. Newland said the relief fund in the CARES Act seems to set up tribes to compete against one another, and that the Treasury Department is not as familiar with tribes as the Interior Department. “The sentiment I am picking up from Treasury is one of regulation, and how tribes spend this money,” Newland said. “We’re governments, not businesses. We need to have the flexibility in the funds in the CARES Act to meet our needs. What works here in Bay Mills is not going to work in Alaska.”

“There are people who are going to be laid off tomorrow if those loans don’t come.”

“There are people who are going to be laid off tomorrow if those loans don’t come,” Broadman said. “Those are tribal households, those are tribal dinner tables. Something needs to be done, and it needs to be done quickly, or Indian Country will be left behind.”

The economic impacts of casino closures will also affect local, state and federal governments. Analysts at Meister Economic Consulting found that impacts from tribal casino closures on the U.S. economy totaled $4.4 billion in lost economic activity. Along with that came $631 million lost in taxes and revenue to federal, state and local governments, and 728,000 people out of work.

The Confederated Tribes of the Umatilla Indian Reservation, for example, employ 1,700 tribal and non-tribal residents throughout Umatilla County in central Oregon and distributes millions in charitable contributions annually, a spokesperson said. The tribe was one of the first affected by COVID-19, when a casino employee tested positive in the first days of March. By March 24, the tribe had closed casino operations, a hotel, two golf courses, a movie theater, a grocery store and a restaurant. Spokesperson Jiselle Halfmoon said within two days of the voluntary closure, the tribe lost $600,000 in revenue. Gaming funds are essential to supporting the tribe’s family services, education, burial services and cultural resources among others, Halfmoon says. Tribal leadership is still assessing what kinds of cuts or losses their tribal programs will have to absorb moving forward. 

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“Everybody around the world is struggling right now, and tribes are racing against the clock before the resources we have run out,” Newland said. “If we’re spending time trying to get it perfect and putting together the right formula or set of regulations of how to spend CARES Act money, they’ll come too late to matter.”

Anna V. Smith is an assistant editor for High Country News. Email her at [email protected] or submit a letter to the editor