THE PANDEMIC IMPACT AND INDIAN GAMING
THE PANDEMIC IMPACT AND INDIAN GAMING
April 1, 2020
THE REGIONAL IMPACT AND INDIAN GAMING
The damage caused by the lost revenue from tribal gaming due to the Coronavirus extends beyond the bottom line. Hundreds of tribal gaming resorts and casino talent buyers have felt the devastating blow and even when the $18 billion dollar stimulus package from the government kicks in, the lasting damage will be immeasurable. The stimulus may help some tribes regain composure operationally, but it won’t also cover the interest of all the loans that are in default. Many tribes do not own their gaming facility outright, and there are operational loan provisions that must be followed.
Example (a) – A large financial institution like BOA or Chase will not give your tribal membership or business council a loan if your casino does not have a qualified CEO in place.
Example (b) – All tribes with multimillion-dollar loans are expected to generate a certain amount of profit and revenue annually.
According to the American Gaming Association, in 2016 tribal casino employment reached an all-time high. At the time, the industry employed over 676,000 employees and paid $36,218,147,304 in wages. The combined annual tax revenue was $15,257,612,388.
To put this into perspective, let’s look at the top 4 performing tribal gaming states in 2016 and see what happens if we remove their annual sales output, jobs and close their doors for an entire two years.
TOP 4 TRIBAL CASINOS IN 2016
- California – Sales Output = $19,959,932,884 – Jobs 124,274 – 69 Tribal casinos
- Oklahoma – Sales Output = $9,586,889,121 – Jobs – 74,723 – 102 Tribal casinos
- Florida – Sales Output = $6,146,819,954 – Jobs – 45,962 – 82 Tribal casinos
- Washington – Sales Output – $5,393,834,983 – Jobs 26,882 – 35 Tribal casinos
As you can see, financial and demographic impact is devastating. Watching 271,841 jobs $41,087,476,942 in sales output disappear would be difficult for any economy to withstand.
Some tribes have have laid employees off while hundreds of other tribal casinos are paying wages for staff that isn’t physically working. This method, while generous, isn’t sustainable for casinos long-term. At some point, the tribes will not be able to continue.
For now, the approach is helping to retain team members who may otherwise resign in search of alternative work.
LOSSES IN INDIAN COUNTRY
The people who are most impacted are the members of each tribe. Casino profits are used to fund benefits for tribal members and their communities.Casino profits also help provide stability for economic development, housing assistance, grocery assistance, medical services, aid for public programs and millions of dollars in charitable contributions annually.
THE CURRENT RELIEF EFFORTS
On Friday, March 27th, 2020 president Donal Trump signed the historic $2 trillion Coronavirus stimulus bill. According to Indian Country Today, within the bill was a $10 billion package that fell short of the $18 billion target previously requested by the National Indian Gaming Association. Of the $10 billion offered to tribes, more than $1 billion will go directly to community welfare and Indian Health Services. Nearly half of that $1 billion will be allocated to tribal communities that have agreements with the federal government to run their own health care facilities. The remaining $8 billion will go towards current virus-related expenses.
PERSONAL AND SOCIAL IMPACT
The social and economical impact cannot be determined by any one person or entity at this point in time.
From a casino talent buyer’s viewpoint, one thing we know for certain is that concerts continue to be affected by the changing of the times and world events.
This was apparent during the active shooter incident in vegas and it continues to stay relevant through these challenging times.
Bottom line is, we know that perceptions of live entertainment have changed over the last 50 years.
Of course, we hope the economy will rebound and come back stronger than ever, but for now, the future of tribal gaming and casino entertainment remains uncertain. Presently, the world is waiting to get out and to enjoy themselves again. It is possible that they will return to the exciting world of live entertainment and the gaming floor of their favorite tribal casino. It is also quite possible that people will remain fearful of social contact due to the prior emphasis on social distancing.
Reflecting across history, we see that progress towards spiritual and cultural healing following the devastation of a pandemic is gradual. For example, Native American populations declined to less than one percent in part from exposure to infectious diseases introduced 400 years ago. Time has helped to improve the wellbeing of tribes, and through our collective efforts, we will see the world recover from the impact of the Coronavirus as well.