Indian IRs

Redefining 'Economic Diversification' as 'Integrated Experience in Indian Country

The new darling of the gaming industry goes by the name “Integrated Casino Resorts.” The recent Global Gaming Expo showcased an entire track and exhibit hall titled “The Integrated Resort Experience.” It was the first time G2E offered an end-to-end experience focused on the growth of the casino resort property.

In Indian Country, the “integrated” notion has a familiar ring. The statutory purpose of the Indian Gaming Regulatory Act (IGRA) hinges on the need to encourage economic development and diversification within tribal communities to strengthen self-sufficiency and tribal governments.

For the past 25 years, gaming has been the primary catalyst for economic and infrastructure growth on the reservation. The success of IGRA is indisputable. According to the 2015 edition of Casino City’s Indian Gaming Industry Report, tribal casinos account for roughly half of the total revenue produced by the U.S. gaming industry—a $28 billion gaming market with 479 tribal gaming facilities operating in 28 states.

Yet, despite this successful backdrop, many tribes could benefit from redefining the mantra “economic diversification” to encapsulate the phrase “integrated experience.” The new take on an old idea may create new opportunities for phased expansion at existing brick-and-mortar casinos. The integrated growth model of “spend more and stay longer” could spark an economic boom in Indian Country while simultaneously building basic tribal infrastructure and interest in native cultures and tourism.

A review of commercial gaming profits attests to the need for tribes to revisit their economic development strategies to embrace the integrated experience. Recent financial reports find that more than 60 percent of commercial gaming revenues on the Las Vegas Strip are now generated off the casino floor. This growth is pivotal, and directly attributed to the integrated casino resort model of providing a full suite of profitable amenities for casino-resort guests.

A pivot to integrated resort-style facilities in Indian Country will undoubtedly bring additional revenues. An example of a successful tribal integrated approach can be found in Florida.

In 2012, the tribes in Florida posted a 25 percent increase in non-gambling revenue; nationally, all other tribal casinos posted a 2.7 percent increase. In 2013, the tribes in Oklahoma posted a 13.9 percent increase in non-gambling revenues to $580.5 million generated by casino patrons’ expenditures on food, beverages, lodging, shopping and entertainment.

In 2014, the tribes in California saw their non-gaming revenue increase 0.5 percent to $795.8 million. The increased California revenue was derived from the growth in non-gaming amenities, such as hotel towers, restaurants and other entertainment upgrades.

Integrated Experience in Indian Country

Traditionally, integrated resorts feature state-of-the-art meeting and convention facilities, five-star restaurants, world-class shopping, luxury hotel accommodations, entertainment and gaming. Yet, what is ideally suited for commercial gaming properties may need to be modified to better suit and benefit Indian Country. The ideal Indian integrated model should seek to highlight the unique culture, traditions and location of tribes to better address the historic hurdles that plague successful business ventures in Indian Country, such as:

• Remote geographic locations and inadequate infrastructure;

• Access to a large gaming market or population centers;

• Access to capital financing; and,

• Access to casino management expertise and a specialized workforce.

To that end, last year the Sycuan Institute on Tribal Gaming (SITG) and the Arizona Indian Gaming Association (AIGA) announced a partnership to develop a curriculum that addressed gaming operations from the whole property perspective with an emphasis on the emerging Integrated Resort Model in Indian Country.

The global vision for tribal gaming education and development outlined in the Executive Training curriculum seeks to emphasize the need for cultural sensitivity and competence, government-industry relations and industry intelligence from the perspective of native nation-building. In sum, both SITG and AIGA advocate that if Indian tribes are to take advantage and participate beneficially in the integrated resort experience, the business approach should seek to capture the unique cultural, economic and political dynamics of each tribal community in a holistic manner.

Today, despite the federal trust relationship, Indian tribes are increasingly encouraged to find market-based solutions to foster economic growth and build community infrastructure as federal austerity and sequestration policies reduce government funding. Now, to maintain and grow casino revenues, many tribes are willing to take advantage of the integrated experience as a business opportunity to attract in-state visitors, large convention business and tourists from around the world.

Something Besides Gaming

The G2E Integrated Resort Experience envisioned a six-segment model, “Dwell, Indulge, Captivate, Connect, Play and Zen,” to advance the integrated concept. Tribes could utilize the same or similar model to create and market their own uniquely native integrated experience by intertwining their own culture and experience into each of the six segments.

The “Indian Integrated Experience” would enhance the vibrant cultural revitalization already occurring in Indian Country. The focus on community development as integrated experience could spark new business plans that make economic sense and are in synergy with cultural elements.

For example, beyond the amenities at the casino, a tribe can develop needed community infrastructure down the road, such as gas stations, retail components like grocery stores, beauty salons, movie

theaters and other shops. More importantly, the “fun money” could be directed toward cultural experiences like virtual historical re-enactments and encampment experiences, canoe trips, tree and water experiences, gator hunting and fishing adventures, arts and crafts, language developments, indigenous spa experiences, museum and film opportunities.

The list of possible Indian integrated experiences is endless, and the desire of tribes to revitalize their history and native culture, priceless.

Loretta A. Tuell is a Shareholder at Greenberg Traurig.  She focuses her practice on American Indian law, governmental law and policy, and gaming matters.  For more than 20 years, Loretta has worked in the arena of federal Indian law and policy.  She recently served as the Majority Staff Director and Chief Counsel for the Senate Committee on Indian Affairs to Chairman Daniel K. Akaka from Hawaii and formerly served as Staff Counsel to the late Senator Daniel K. Inouye.  Loretta has held several senior positions at the Department of Interior and was appointed by President Clinton to be the Director of the Office of American Indian Trust.  In 2009, Loretta was recognized as one of five women—and the first American Indian woman in history—to receive the prestigious Margaret Brent Women Lawyers of Achievement Award from the American Bar Association.  She is a graduate of UCLA School of Law and a citizen of the Nez Perce Tribe of Idaho.