Former NIGC Chairman Jonodev O. Chaudhuri (Muscogee (Creek) Nation) participated in a recent SBC Digital Summit panel with Conrad Granito, General Manager of the Muckleshoot Casino (the largest Tribal gaming operation in the Pacific Northwest), and Sheila Morago, Executive Director of the Oklahoma Indian Gaming Association. The SBC Digital Summit was held virtually April 27-May 1.
On the heels of the recent SBC Digital Summit, Jonodev O. Chaudhuri, former National Indian Gaming Commission (NIGC) Chairman, put the detriment of the coronavirus pandemic on Tribal economies into perspective for Native Business, while also speaking to how the federal government has failed Tribal Nations through omissions and delays in financial aid.
As Chaudhuri expressed, in a jarring turn of events, the coronavirus outbreak abruptly hit pause on a $34.1 billion industry in terms of gross gaming revenue. But that’s just the tip of the iceberg.
“When you look at the multiplier effect of Indian gaming on downstream economic activity, as well as the employment effect on Indian Country, the numbers are staggering,” said Chaudhuri, a citizen of the Muscogee (Creek) Nation, and current Chair of Quarles & Brady LLP‘s Indian Law and Policy Group.
“The National Indian Gaming Association (NIGA), before the crisis, estimated the indirect and direct economic impact of Indian gaming to be well over $100 billion,” Chaudhuri said. Since the onset of the coronavirus pandemic, estimates have hardly come close to capturing the gravity of loss to Indian Country.
“When you think about the secondary effect on employees, and businesses who work with Indian gaming, the impacts of COVID are truly staggering. So in terms of the breadth of the virus, the closures that we’ve seen because of this crisis have touched every corner of Indian gaming. Voluntarily, 100% of Tribal gaming operations closed without any mandate from state government. As we know, Tribes operate independent of direct state authority….”
“As good partners to state and local governments, and in the best interest of protecting patrons, employees and the general public, Indian Country — without being required to do so — closed all of its facilities. It was a remarkable act of good faith from Tribal Nations, and solidarity with other governments to protect the public. The practical effect of that is that the 11th largest industry closed.
“Tribal gaming, the 11th largest employer of Americans, closed almost overnight. The impacts are huge.”
Federal Stimulus Falls Short
Chaudhuri clarified to Native Business that the temporary wipe-out of the Tribal gaming industry is just one part of the economic wreckage that Tribal Nations face.
Tourism, entrepreneurship and Tribal economic development, which have long subsidized federal trust and statutory obligations, have taken a substantial hit.
Indian Country is “historically underfunded (by the federal government), and Tribal Nations who don’t have their own independent tax base rely on Tribal economic development and Tribal enterprises to fill in the gaps to provide critical programs and services for their citizens. The impact goes far beyond gaming and applies to things such as health care operations that Tribal Nations run, energy and energy exploration and development, technology operations that many Tribes run or emerging technologies. It runs the gamut of industries in Indian Country — all of which were hit by the coronavirus. So, in response to the devastating loss of Tribal revenue, advocates for Indian Country stood side by side with Tribal leaders to push Congress to provide relief.”
While Congress’s inclusion of $8 billion for Tribal governments as part of the $2.2 trillion CARES Act was a necessary start, it in no way captures the full economic need of Indian Country. “Even though this last round of CARES funding included Tribal stabilization funds, the implementation of those funds was problematic in itself,” Chaudhuri expressed.
Meanwhile, Chaudhuri noted, Tribal leaders and Indian Country advocates continue to push for more realistic funding support for Tribal Nations that accurately reflects the true economic loss.
As it pertains to U.S. Treasury’s initial guidance on eligible small businesses that could receive funding through the U.S. Small Business Administration’s Payroll Protection Program (PPP), Tribal gaming and financial businesses were unfairly excluded.
“Only after significant advocacy and effort was Indian Country able to get some inclusion of gaming operations through the PPP funding, which doesn’t address the needs of most large gaming operations,” Chaudhuri noted.
Meanwhile, Indian Country continues to wait on critical COVID-19 relief held up by Treasury.
Nearly 60 percent of the CARES Act’s $8 billion Tribal set aside has been disbursed based on population data (and, according to a Harvard study, possibly by faulty means). The remaining $3.2 billion continues to be withheld by the Treasury, which has slated a June 5 date for shipment to Tribal governments. That second round will be disseminated based on employment numbers and expenditures — determined by Tribal entry in Treasury’s online portal. The department has requested information such as employment data for both Tribal government and Tribal enterprises for calendar year 2019 along with fiscal year 2019 Tribal government expenditures.
While Treasury said Monday that its June 5 timeline balances data collection with Tribes’ immediate need for these funds during a global health emergency, Chaudhuri told Native Business (the week prior) that time is absolutely of the essence.
“Given the dramatic need in Indian Country and the real lives that are being impacted, any delay by federal agencies in distributing funds that Congress set aside for Tribal Nations is extraordinarily concerning,” Chaudhuri said.
Economic Hit to Tribes Affects the Greater Community
Tribal economic development provides important infrastructure that benefits Tribal citizens and non-citizens alike. Considering numerous Indian gaming facilities are located in remote areas, and these casinos are oftentimes among the largest, if not the largest, employer in their county, “the hit to the economy of these rural communities can’t be overstated,” Chaudhuri emphasized.
Tribal revenues, unlike commercial profits, are inherently local and support Tribal and community programs and services. “Because they are local, the recycling effect of every dollar that is used to stabilize Tribal Nations is magnified,” Chaudhuri said. “In other words, supporting Tribal Nations and their efforts to address local challenges is extraordinarily efficient, as Tribal Nations have the greatest interest and the greatest responsibility in solving local problems on the ground.”
The Significance of Data
During the SBC Digital Summit’s panel on the Tribal Gaming Landscape, Sheila Morago, Executive Director of the Oklahoma Indian Gaming Association, commented on the necessity of data collection within Indian Country.
Morago “hit the nail on the head,” Chaudhuri said, speaking of how “when Indian gaming and Indian Country as a whole moves forward, collecting reliable data that accurately captures the economic activity of Tribal Nations is extraordinarily important, as the COVID crisis demonstrates. When policymakers need to act swiftly, data always helps; data is always critical,” he said, echoing parts of Morago’s point. “Being able to accurately capture the positive benefits of Indian Country economic activity on both Tribal citizens and non-citizens should be a focus of attention for everybody who works in Indian Country economic development.”
Developing Strategies Now + For a Post-COVID World
For all industries, the first order of business is navigating the current crisis, Chaudhuri said. Yet as Tribes proceed, “we should have one eye toward what the country and the world will look like after the crisis, and develop business strategies appropriately,” he said.
As that relates to gaming, Chaudhuri asks, “What kinds of technologies will be suitable to the post-COVID gaming community? What types of regulatory and policy should we consider to support Tribal innovation and Tribal regulation in a post-COVID gaming community? And what types of market analyses should we be doing now to try to predict what the post-COVID gaming community should look like?”
Nearly every industry is tackling that right now.
What makes Indian gaming unique is that “under the Indian Gaming Regulatory Act (IGRA), most of our gaming activity is inherently land based,” Chaudhuri said. “However, In a world of social distancing, and changing technologies, what can Indian Country do to maximize its economic activities, given the existing regulatory limitations that are out there?”
Chaudhuri continued: “We’ve got to be poised to address challenges and take advantage of opportunities in the post COVID-19 gaming world, and in doing so, we have to not just think about market considerations and operational considerations, but we also should be thinking about policy and legal adjustments that could or should be made to allow us to address challenges and take advantage of opportunities in the post COVID-19 gaming environment.”
As Chaudhuri articulated during the SBC Summit, IGRA was never intended to put Tribes at a disadvantage to commercial gaming, “and every effort to provide flexibility to Tribal operators should be considered by Congress as well as state government. It is important to point out that states benefit significantly from Indian gaming beyond any direct revenue.
Beyond compact agreements, a state sees benefits through heightened economic activities within its borders, job creation, and the secondary business activity that Indian gaming provides is extraordinary.
“So, states and federal policymakers should be flexible when considering regulatory and statutory changes that could help support Tribal economic activity, such as allowing Tribes to use emerging technologies that are on new platforms,” Chaudhuri stated.