Native Business Executive Editor Carmen Davis (Makah/Chippewa-Cree/Yakama) reflects on economic diversification and why it matters now more than ever in our weekly “From the Editor.”
For years, much of Indian Country has thought Indian gaming impervious to disruption. We have built Tribal economies as if the $34.1 billion Indian gaming sector is impenetrable.
Then the coronavirus crisis hit, leading to the temporary closure of all 989 casino properties across the U.S., including more than 500 Indian gaming facilities, operated by 246 Tribes in 29 states. After the first two weeks of closure, Meister Economic Consulting released statistics in early April showing that $4.4 billion had been lost in economic activity from Indian gaming, and 728,000 people were temporarily out of work. Those numbers compounded with time.
Native ambassadors for diversification, like Gabe Galanda, have been warning all along: “Indian gaming is not forever.” For years if not decades, Galanda has leveraged his position as partner at his law firm Galanda Broadman to sound a horn about the need for Tribes to diversify beyond casinos.
No one industry can be a panacea for Tribes’ economic needs. The coronavirus pandemic has only underscored that.
As my husband Gary Davis, who is also the Founder, Publisher and CEO of Native Business, articulated in an opinion piece published in USA Today in April (when the impacts of the pandemic were just starting to sink in), “Our most consistent revenue generator, land-based casino gaming, has disappeared virtually overnight.”
Often referred to as a God-send for Indian Country, gaming is actually an economic opportunity that Tribes and Native organizations have pursued with intentionality, while fiercely protecting our sovereign rights and exclusivity to operate casinos. Gaming has revived and restored Tribal economies, and empowered Tribes to provide critical services and opportunities to citizens, build infrastructure and create much-needed jobs. Gaming has spurred lateral and downstream economic activity, and catalyzed reservation economies. It continues to do so. Much of Indian Country has gaming to thank for the seed funding to expand and diversify into new business sectors and industries. Our task at hand is not to move away from gaming, it’s to build on the success of gaming. It’s not to stagnate and cling to what we have achieved, it’s to continue to prosper in the gaming arena while importantly evolving, growing and expanding into new markets. Diversification enables Indian Country to thrive holistically, not relying on the monolith of gaming.
The radical gut-punch of Indian gaming’s temporary halt, due to the pandemic, has drilled this truth home. We cannot put all our eggs in one basket. Indian Country must diversify, because a time will come when there will be another downturn or mass disruption to the state of business as we know it, no matter the sector.
Fortunately, many Tribal economic arms are proactively acquiring businesses outside of the casino industry. Take Kituwah, LLC, for instance. The Eastern Band of Cherokee Indians (EBCI) formed the investment arm in 2019 to diversify revenue beyond reservation-based gaming. The startup is focused on developing revenue streams for the Tribe through property development, entertainment and hospitality, and professional services.
Kituwah’s CEO Mark Hubble, an enrolled member of the Citizen Potawatomi Nation, says the enterprise has balanced quick profit generation, consistent with Tribal needs, while focusing on sustainability and providing a foundation for the next seven generations. “I like Warren Buffett’s philosophies in general — seek value and think long term,” Hubble told Native Business.
It’s important to remember that diversification is not limited to a Tribal portfolio of businesses. Robert J. Miller, author of Reservation “Capitalism”, underscores the need for a private sector for a Tribe to achieve a truly diversified economy that leverages the multiplier effect — one dollar recirculating within its community seven times over. “We need diversification to be more recession proof. We need to develop human capital,” Miller says.
Tribal/public and private sector economies drive economic diversification on reservations, insulating Tribes against economic downturns, while deterring the leakage of dollars off reservations. The confluence of reservation-based public and private sectors ensures “more and more money is spent, and re-spent, on reservations,” Miller states. That’s the basis of a sustainable economy.
This brings me back to the foundations of Native Business — empowering Indian Country and driving business forward. We formed our media business with a commitment to cultivating community around the shared purpose of advancing Tribal self-reliance and sustainable growth now and for generations to come.
Indian Country has sadly been disproportionately affected by the coronavirus pandemic, and financial constraints have inflamed old wounds. Yes, we must protect the lives and livelihoods of our people. But our fears have led to some unfortunate consequences and actions.
In a mere 60 days after the COVID-19 pandemic rippled across the United States, Indian Country was back to fighting one another over government funding. We splintered and turned our frustrations against each other. Centuries of oppression have led Indian Country to defend in separation, when our strength is in solidarity.
Healing ourselves and our creating economies begins by all of us coming together and seeing that we have more in common than different. Many more touch points unite us than divide us. We must continue to build on our connection — not our division — and to teach resilience through unity to the next generation of our Native people.