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From Gaming to Green

The diversified tribal economy

From Gaming to Green

Over the past several decades, Native American tribes in the United States have made incredible economic strides, in no small part due to the operation of casinos on their lands. These ventures have infused tribal economies with much-needed resources to invest in critical infrastructure, education, health care and other vital community services to support their people.

However, despite overall growth in gaming revenues, tribes are beginning to feel the squeeze of new competition. Markets are increasingly saturated, with fewer opportunities for profitable development, particularly within the confines of reservation boundaries.

Ongoing gaming expansion in Illinois will threaten tribal operations in nearby Wisconsin, like Milwaukee’s Potawatomi Hotel & Casino. The potential introduction of multibillion-dollar integrated resorts in Texas looms over tribes in southern Oklahoma who have enjoyed near exclusivity over the massive Dallas gaming market. In Minnesota, electronic pull-tabs, which have proliferated under the umbrella of charitable gaming despite effectively being a mobile slot machine, are projected to close $2.3 billion in sales this year (or more than $340 million in revenue at a 15 percent hold) despite tribal exclusivity over casino gaming in the market.

And these are only the land-based threats, to say nothing of the emerging online casino landscape likely to be dominated by large commercial operators. With this growing threat to their sustainability, tribes are increasingly focused on economic diversification. It would be impossible to share all the ways tribes are working to diversify their cash flows in a short article, but here we discuss several examples of tribes working across varying lines of business that we think are illustrative.

Gaming & Hospitality: Leveraging Assets

A natural first step for some tribes has been to extend their existing casino businesses into the commercial realm. The San Manuel Band of Mission Indians made headline news purchasing Palms Casino Resort in Las Vegas. The Seminole Tribe of Florida—owners of Hard Rock International—followed suit with an agreement to purchase and re-brand The Mirage Hotel & Casino, where they plan to build an iconic guitar-shaped hotel tower on the Las Vegas Strip.

But before these Las Vegas purchases came several regional plays. The Poarch Band of Creek Indians purchased Sands Bethlehem and two Renaissance hotels in Aruba and Curacao. The Mohegan Tribe bought its Poconos property and announced its $5 billion Inspire integrated resort near Incheon, South Korea, set to open later this year.

And, the Chickasaw Nation added Remington Park in Oklahoma City to its growing Global Gaming Solutions portfolio, including Lone Star Park near Dallas and other operations. Further, three of these operators—Mohegan, Seminole, and Chickasaw—are among the bidders for the downstate casino licenses in New York in a competition that also includes nearly all of the major U.S. commercial casino operators.

Decades of experience providing top-class hospitality through their casinos also have well-positioned tribes to delve into non-gaming hospitality ventures. Mille Lacs Corporate Ventures owns and operates several hotels, including the Intercontinental in downtown St. Paul and an Embassy Suites in Oklahoma City. As noted, the Seminole Tribe of Florida owns the Hard Rock Café brand, acquiring it in a nearly $1 billion acquisition that closed in 2007, and today manages Hard Rock hotels, restaurants and casinos in more than 70 countries across the globe.

Tribal Tourism: Sharing Cultural Heritage

For generations, tribes have worked tirelessly to preserve and prioritize their customs and culture, and we see this reflected in nearly all aspects of tribal business. For example, casino design has been heavily influenced by tribal culture; the corridors of many tribal casinos display images and artifacts, with varying depth, materiality, and animation.

Blackfeet Tribal Campgrounds, near Glacier National Park

Blackfeet Tribal Campgrounds, near Glacier National Park

Consider too the traditional geometric patterns prominent among Southwestern tribes, and the modern tribal design invoked by Mohegan Sun in the 1990s. But tribal customs and culture, and the preservation of the natural resources that have long sustained the tribes, have become a business of their own.

Indeed, long before tribes took on gaming operations, reservation lands were leveraged to provide fee-based hunting and fishing, and other recreational opportunities to outdoors enthusiasts. RV parks and convenience stores have been a hallmark for tribes within difficult commercial geographies, and souvenir shops with traditional and modern tribal goods, arts and clothing are ubiquitous throughout the American landscape.

Building on a rich history, tribal cultural tourism offers an immersive experience, narrating stories behind historical facts and providing a glimpse into tribal customs and cultures. Midwestern tribes have offered generations of families lodging and recreation packages in rural areas. The Seminole and Miccosukee Indian Tribes in Florida are famous for their swamp tours and excursions through tribal wetlands. Western U.S. tribes offer gateways into some of the most miraculous natural wonders in the world.

In some cases, tribes have built world-class cultural history museums, such as the Mashantucket Pequot Museum and Research Center in Connecticut, which cost approximately $193 million to construct in 1998. While the museum has revenue centers, the return on investment was as much cultural as economic for the tribe.

To that end, it’s worth noting that the entertainment and meetings facilities built for casino use often double as the grounds for important tribal affairs. Through public powwows, cultural centers, and special events, tribes are not only making their cultures more accessible to outsiders, but also ensuring their traditions remain relevant in the contemporary age.

In effect, by monetizing cultural preservation, tribes have found a way to support cultural preservation programs, including language revitalization, traditional arts and crafts, and the aforementioned cultural centers. This approach ties together the necessity of economic sustainability and the invaluable asset of cultural heritage.

Renewable Energy: Embracing: Sustainable Futures

Across the U.S., numerous tribes are delving into the realm of renewable energy—harnessing the power of the sun, wind and water not only for environmental conservation but also to generate jobs, achieve energy independence, mitigate living costs, and drive bottom-line revenue.

Inextricably tied to their lands, tribes offer a unique perspective on environmental conservation.

The Alaskan Inuit communities have long been intimately connected to their environment, relying on the land and sea for their sustenance and cultural identity. In recent years, these communities have recognized the potential of renewable energy as a means to sustain their tribes, address energy challenges, and foster economic growth in remote regions of Alaska.

The harsh arctic climate and the remote locations of many Inuit communities make energy access a significant challenge. Historically, these communities have relied heavily on diesel generators for electricity, which are costly, environmentally damaging, and dependent on fuel deliveries. But now, many of these tribes, including the Akiak Native Community, are harnessing the power of the region’s rivers and streams for small-scale hydroelectric projects.

Already known for their environmental activism around the Dakota Access Pipeline, the Standing Rock Sioux Tribe is working on a variety of renewable energy projects in the Dakotas. The tribe is among the first to establish its own public power authority, the Standing Rock Renewable Energy Authority (also known as SAGE), to own and operate all the energy production assets within their reservations.

SAGE’s plans include a 60-turbine wind farm, a Native-led public-private partnership to address plug-in electric vehicle barriers for tribal members in the Upper Midwest called Electric Nation, and a solar power project. In combination, SAGE and its projects work to ensure energy independence, protect the environment, and promote economic growth in the region for the tribe.

Navajo Nation Kayenta Solar Facility

Navajo Nation Kayenta Solar Facility

The Navajo Nation, whose territory extends to three states in the U.S. Southwest, has a large and expanding solar power operation. Phases 1 and 2 of their Kayenta Solar Facility generate enough clean energy to power 36,000 homes and business across the Navajo Nation.

Kayenta is owned by the Navajo Tribal Utility Authority (NTUA), which also has a business relationship with the Salt River Project (SRP), a Phoenix-based public power authority to which it provides power. Together, NTUA and SRP are undertaking a new solar farm near Cameron, Arizona. Following the success of Kayenta, the tribe also launched the Red Mesa Tapaha Solar Farm in Utah, a 70-megawatt, 500-acre project. Together, the Kayenta and Red Mesa projects are expected to generate $20 million in wages and more than $35 million in revenue over their lifetimes to the Navajo Nation.

Cannabis: Cultivating a New Industry

The growing acceptance and legalization of cannabis present another frontier for tribal economic diversification. As the industry blooms, Native American tribes are actively in the mix seeking opportunities across the sector, from cultivation and processing to distribution and retail operations.

Some see cannabis as the second coming of gaming, offering sovereign tribal nations potential market advantages like the ability to offer products that for regulatory reasons may otherwise not be available in the state and locations near border states where cannabis sales are more restricted.

In New York, where the Shinnecock Indian Nation has tried and failed for years to establish a casino project on their 1,000-acre territory near Southampton, the tribe has found less resistance and more success developing the region’s first adult-use cannabis dispensary—Little Beach Harvest. The Shinnecock Nation has partnered with TILT Holdings, a cannabis development and solutions provider, to build a 5,000-square-foot shop on tribal grounds with future plans for a wellness and consumption lounge as well as cultivation.

Meanwhile, the Seneca Nation of Indians—a tribe with considerable gaming experience in New York—sees cannabis as a way to continue to grow revenue and diversify in the casino sector as well as outside of it. More than 20 years after opening Seneca Niagara Casino, the resort footprint this year evolved to include the tribe’s own 2,500-square-foot retail operation called Nativa Cannabis.

Seneca leadership expects cannabis sales in Niagara Falls will serve as another draw for visitors to the area, and describe Nativa Cannabis as the “first step” in a larger plan to increase the nation’s investment in the growth and distribution of marijuana products.

Elsewhere, the Eastern Band of Cherokee Indians (EBCI) has been perusing a vertically integrated cannabis model out of the gate. Over the course of the past two years, the EBCI tribal council has taken measures to authorize the growth, sale and use of medical marijuana on its lands, simultaneously creating the first legal cannabis boundary in the state of North Carolina and a home base for their cannabis venture, Qualla Enterprises. Presumably building off their gaming expertise, EBCI established a Cannabis Control Board to oversee the licensing process for all phases of the venture.

Meanwhile, Qualla’s first priority was cultivation on an industrial scale within the tribe’s 57,000-acre Qualla Boundary territory in western North Carolina. Harvesting was reported in November of last year, and with their head start against state legalization efforts, the tribe seemed poised for success.

Recently, however, progress has stalled. Following passage of a resolution committing an additional $64 million to the effort, EBCI Principal Chief Richard Sneed vetoed the decision, ultimately requesting a forensic audit of the tribe’s initial $31 million investment. In addition to other concerns, Sneed worries the funding could jeopardize the tribe’s casino business due to federal restrictions on how tribes can spend gaming revenues.

Conclusion: A Sustainable Economy

The gaming industry’s success has undoubtedly paved the way for Native American tribes to exercise greater control over their destinies. It has allowed them to invest in their communities’ economic and social welfare, laying the groundwork for future growth.

But tribes are nothing if not resourceful, and their diversification efforts have developed well beyond gaming and hospitality. We work closely with many tribes and their economic development arms to advance opportunities both inside and outside the world of gaming.

Tribes are leveraging their capital to venture into diverse sectors, from those outlined here to health care, tech, retail and more. Another particularly successful line of business for tribes has been government contracting. The advantages that tribes have in the bidding process allow their contracting arms to win considerable contract volume, providing jobs and reliable, recurring income for their people.

These strategic investments and careful planning are breaking the cycle of dependence, creating sustainable economic opportunities, and fostering cultural preservation. As these tribes diversify their business activities, they forge a path for long-term economic stability, cultural revitalization, and the empowerment of future generations.

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