US Tribal Gambling Operators Suffer Economic Blow due to Casino Shutdown

The National Indian Gaming Association (NIGA) reported that the projected revenue of tribal gambling operators across the United States is expected to drop by around $22.4 billion in 2020, following the state-wide casino shutdown that occurred due to the global coronavirus pandemic. This corresponds to nearly half of the expected annual profits of the 241 tribes.

Mr. Ernest Stevens Junior, the Association’s Chairman and member of the Oneida tribe from Wisconsin, expressed his concerns, stating that native tribes, the Oneida Nation included, mostly rely on casino gaming to feed their economies.

The latest figures released by the Wisconsin Department of Administration revealed gambling venues across the Badger State registered gross revenue of approximately $1.3 billion during the fiscal 2018/2019. The revenue is based on around $17.6 billion made in bets during this period.

The Ho-Chunk Nation Relies on Gambling for over 80% of Its Budget

Wisconsin’s Ho-Chunks are among the tribal nations whose economy has suffered a serious hit due to the lockdown. The tribe operates six gaming rooms across Wisconsin and relies on gambling activities for over 80% of its yearly operational budget.

The President of the Ho-Chunk Nation, Mr. Marlon WhiteEagle, confirmed the tribal legislation had no other option but to delay its next budget’s approval as it needed more time to evaluate the full impact of the shutdown as gambling venues are starting to reopen.

But the Ho-Chunks are hardly the only tribal nation to suffer the devastating economic effects of the lockdown. The Potawatomi First Nation from Wisconsin’s Forest County has lost over $70 million in net profits from the two gaming venues it operates. The losses are so big that the tribe was forced to cut down some of its government services and lay off around 60% of its employees.

According to the Potawatomi’s Attorney General, Mr. Jeff Crawford, the tribe had no other option but to cut its government nearly in half due to the reduction in operating funds. Additionally, the Potawatomi Nation has ceased paying dividends to as many as 1,700 of its members.

What is worse, the tribal population of the US was already struggling with greater unemployment and poverty rates than those for non-native residents prior to the casinos’ shutdown. Unemployment rates among First Nation Americans are nearly twice as high compared to those for non-native citizens, according to data released by the US Census Bureau.

Such deficits have caused tribal economies to suffer more pronounced negative effects due to the casinos’ shutdown. According to the National Indian Gaming Association, as many as 200,000 people, employed in the tribal gaming sector, have lost their jobs. However, the negative economic impact of the shutdown also extends itself beyond the tribal communities.

Approximately half of the 27,000 employees that work within the gambling sector in Wisconsin are not tribal members. Furthermore, figures released by the American Gaming Association revealed that Wisconsin casinos contribute over $3 billion to the state’s economy each year.

The Ho-Chunk Nation Is Yet to Reopen All of Its Wisconsin Casinos

As of June 18, 11 out of 26 tribal gambling venues in the Badger State have resumed their operations. However, none of them operate at full capacity. One example is the Ho-Chunk Nation that relaunched its Madison venue toward the end of May with under one-third of its gaming machines in operation.

The Madison casino operates in line with all state health guidelines, requiring visitors to wear masks and have their body temperature checked before they can enter the premises. The Ho-Chunk Nation is yet to reopen its casinos in Wittenberg, Wisconsin Dells, and Black River Falls with restricted operating hours. Dining services and dealer-operated table games will become available at a later stage with the further easing of the restrictions.

Under the CARES Act, the tribal nations have so far received emergency funding of $8 billion but the sum does not fully cover the revenue losses following the nation-wide shutdown. An additional emergency funding package of $20 billion for the tribes is yet to receive approval from the Senate. According to the President of the Ho-Chunk First Nation, the shutdown serves as a wake-up call for tribal governments, reminding them they need to diversify their economies rather than relying mostly on gaming revenue.

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