April 26, 2018 by

American Indian Casino Successes and Failures

The two primary challenges faced by land based casinos are the increasing tendency of players to eschew travelling to a land based casino in favor of playing at a casino online and the competition that so many land based casinos place upon each other.  Added to the challenge of meeting competition generally, many casinos face an imbalanced competitive challenge from the many Native American casinos.


US Government Decision against Two Tribes

Having said this, we would like to discuss some successes and some failures of America Indian casinos.  The news this week is that the US department of the Interior, which makes policy decisions that affect Native Americans, rejected a request from two Connecticut Indian tribes, the Mohegan and the Mashantucket Pequot, to build a casino in the state. 

There was immediate speculation that the Department of Interior had a) rejected the advice of department experts who had been asked to give their judgment whether the casino should be built and who said that it should and b) that the decision resulted from massive lobbying against approving the casino by MGM Resorts International which would face stiff competition from the casino were it to be built.

Competition in the casino business comes not only from other casinos but from one group’s familiarity with the bureaucratic process and another group’s failing to grasp the subtleties of the lobbying system in Washington.  Despite having the support of “experts” the Indian tribes didn’t have the support of bureaucrats who may or may not have been swayed by the high-powered lobbyists from MGM Resorts International.

Land Purchase

In the news is a report that the Pamunkey Tribe has bought land and will seek approval for a casino and resort on the land in Kent County Virginia.  At the present time, there are no casinos in Virginia.   

The Pamunkey Tribe was recognized by the Department of the Interior only in 2015.  They claim Pocahontas as an ancestor and are said to have been the most prominent tribe in the confederation of tribes called the Powhatan Paramount Chiefdom which was the group of Indians that welcomed the British settlers at Jamestown in 1620.

The land purchase was the easiest part of this process.  The tribe will still have to go through many bureaucratic requirements such as impact studies.  The fact that the tribe is talking about building a resort is also significant.  It may no longer be sufficient for an entrepreneur who wants to build a casino to build a hotel and casino complex.

These days, an entrepreneur has to build resort.  The concept of the Integrated Resort began a decade ago in Singapore as a way to get the government there to approve a casino.  the idea is that the casino is just one of many attractions at the resort.  The resort will include family friendly theme parks, pools, shopping, theaters, restaurants, and a convention center.  So the tribe will have to raise far more money to build a resort than it would have had to borrow to build a hotel and casino complex.

$1,000,000

The Shakopee Mdewakanton tribe in Minnesota has been so successful running land based casinos that every tribal member receives one million dollars a year!!!

Not as Easy as it Seems

However, the Mashpee Wampanoag tribe of Massachusetts is experiencing a far different situation.  Back in 2007, the Bureau of Indian affairs recognized that the Mashpee Wampanoag traced back to colonial times and were still almost 100% pure Mashpee even in 2007.  In 2015, the Bureau set aside some land for the tribe to be its reservation. 

There were two problems with the land that was set aside.  The total amount of land was 130 hectares, about 325 acres.  The problems were that the land was divided with 60 hectares in one location and the remaining land 65 miles away.  The second problem is that the land in both places was in villages, the towns of Staunton and the town of Mashpee.

Cedric Cromwell, the tribe’s leader, said that the amount of land was but a small fraction of the land the tribe controlled in the early decades of European settlement.

The tribe asked the town of Staunton for permission to build a massive casino complex that would cost about one billion dollars to build.  The condition the tribe placed on the deal was that no other casino could be built “in the area”.  The town granted the tribe permission to build the casino and the tribe borrowed money toward that end.  But a developer from outside the state also wanted to build a casino “in the area”.  His casino would be only about 15 miles from the Indian casino.

The case is making its way through the courts amid charges of racism and anti-Indian bias.  Meanwhile, the tribe has millions of dollars of debt and no means to pay back the loan.

Sports Betting

The National Indian Gaming Association (NIGA) is already petitioning to be allowed to take sports betting bets if and when the Supreme Court decides that the law that prohibited sports betting is unconstitutional.  The law that opened the way for Native American casinos specifically allowed casino gambling.  Therefore, one interpretation of the law has it that the Indian tribes that run casinos have no legal authority to offer sports betting.

Riches Come with a Price

The Native American tribes that have opened casinos successfully have also had to pay a price in the loss of some traditional tribal culture.  The riches that the younger generation of Native Americans receive has in many cases enticed them to become more modern and to follow ancient customs less.

Every week there is something in the news about the difficulties Native American tribes are experiencing amidst the riches casinos have brought.