Minnesota was one of the first states to recognize the impact of tribal government gaming. State tribes launched bingo halls in the early 1980s, and after the passage of the Indian Gaming Regulatory Act in ’88, casinos with video slot machines and blackjack were launched.
The Shakopee Mdewakanton Sioux Community was a tribe with a small reservation close to the Minneapolis-St. Paul metropolitan area. After having success with a bingo hall, the tribe launched the Little Six Casino in 1989. The tremendous success of that casino allowed the tribe to build and open the Mystic Lake Casino Resort, now the premier gaming resort in the Twin Cities area.
“We had a small loan to help us build it faster,” says Stanley Crooks, who has been chairman of the SMSC since ’92. “But most of it was revenue we had earned at Little Six.”
Because of its proximity to the major population center in the state, the Shakopees became the most successful tribe in the state. But since the tribe had known hard times, says Crooks, they were anxious to give back to the community.
“We recognized groups that had helped us before gaming and we wanted to support them,” Crooks explains. “We started modestly, sharing our extra revenues with them. I think in the first year, it was something like $3 million. Now our charitable donations reach more than $21 million a year.”
After paying off all debts, taking care of infrastructure issues and supporting community organizations—from health care organizations and conservation to public broadcasting and boys and girls clubs—SMSC turned its attention to tribes that have been less fortunate in location and sometimes even business sense.
“We had money for investment, but instead of buying stocks and bonds, we decided to reach out to tribes,” says Crooks. “We did that two ways: in the form of grants and donations or loans.”
Crooks says the effort has been rewarding to both parties.
“Our philosophy was that we wanted to help tribes get through difficult times or raise money to start or expand businesses,” he says. “We didn’t want to do some joint venture and share in their profits, but we wanted to make it easier for them to get the money they needed to do what they thought was right for their tribe, whether it’s economic development projects or job creation.”
Crooks explains that SMSC doesn’t just hand out loans; the tribes apply for them and produce a proposal and a business plan.
“We have a law firm that does due diligence for us and evaluates the plan before we go ahead and make the loan,” he says. “If we determine that it’s a solid plan with a good chance for success, then we offer a reasonable interest rate and repayment terms.”
Crooks says the tribe wants to help other tribes diversify their economies.
“Gaming was always supposed to be a supplemental income,” he says. “Tribes that don’t have a big land base or a favorable location must look to diversification, because gaming will sustain them for a period of time, but it might drop off at any time due to political whims or other issues.”