Tribes dealt severe economic blow as pandemic squeezes casino revenues

Note: This article is part of the project: "Indigenous Impacts: How Native American communities are responding to COVID-19." We invite you to view the entire project here .

MAHNOMEN, Minn. — The Shooting Star Casino was a logical choice as a site for drive-in coronavirus testing on the Ojibwe White Earth Reservation.

The sprawling casino, hotel and convention center serves as a primary gathering place for residents of the reservation and surrounding communities. It’s kitchen prepares meals daily for 680 elders and school children.

But the coronavirus pandemic has sharply reduced business activity at Shooting Star and other tribal casinos throughout Minnesota, North Dakota and South Dakota. Early in the pandemic they were forced to close for an extended period, then reopen with restrictions that significantly limited their capacity.

The pandemic, in fact, has dealt a severely unlucky hand for tribes — delivering the greatest financial blow in decades — for whom casinos serve as powerful economic engines that support social programs and create jobs for members.

Lots of jobs. Before the pandemic, Indian gaming employed 23,517 in Minnesota’s 42 gaming sites, 4,440 at 10 casinos in North Dakota and 3,090 at 14 sites in South Dakota.

Shooting Star in Mahnomen normally employs 700 to 800, but now is operating with about 400 employees, said Scott Stevens, the casino and resort’s general manager. Shooting Star closed March 18 and reopened in mid-June.

“We’re not back to normal conditions at all at this point,” he said. Capacity has been reduced significantly to maintain safe distances between customers and staff members. Plexiglass dividers separate players and dealers at tables.

Shooting Star’s hotel has 371 rooms, but has been operating with 200 to 250 during the pandemic, Stevens said.

Normally, tour buses line up outside tribal casinos, including many from Canada, which has closed its border because of the pandemic. Concerts were canceled or postponed.

“We haven’t had any tours at all,” he said. “Tours haven’t been happening.” Still, Stevens added, “There’s a few travelers coming through.”

Not only are casinos the largest employer on many reservations. They also are big business enterprises. Indian gaming in Minnesota generated $1.5 billion in gambling revenues in 2017 and $260.3 billion in 2016, the most recent figures available, according to Casino City’s Indian Gaming Business Report.

In North Dakota, Indian gaming tops a quarter of a billion dollars, ringing up $249.6 million in 2017 and $42 million in non-gaming revenue in 2016, according to Casino City’s figures.

“It’s been the big revenue source for each tribe and the biggest employer,” said Scott Davis, executive director of the North Dakota Indian Affairs Commission and a member of the Standing Rock Sioux Tribe.

The pandemic has challenged tribes to reopen safely to help sustain programs and employment. “The tribes are doing all they can to make the right decisions,” Davis said. Federal assistance, even in normal times, fails to meet their needs. “Anything the tribes get from the feds, it’s never enough.”

In North Dakota and Minnesota, all of the tribal casinos closed in March, as the pandemic struck and governors ordered business closures to slow the spread of the virus, bringing reservation business centers to a halt. “It’s really hit them enormously,” Davis said. “But it could be worse.”

At Standing Rock, Prairie Knights Casino and Resort looms from its perch on a bluff, a beacon that draws visitors for gaming, concerts and fishing tournaments at the nearby marina.

Revenues from Prairie Knights and smaller Grand River Casino located across the Missouri River from Mobridge, S.D., are by far the tribe’s largest sources of revenue.

The two casinos provide a case study in the importance of gaming to a reservation economy where average employment earnings are two-thirds of the national level and 31.4% of households rely on food stamps.

Prairie Knights generated revenues of $36.5 million and Grand River Casino $9.2 million, according to a 2018 economic development report by the tribe. Those dwarfed the $522,346 in revenues from the tribe’s farm.

Altogether, tribal businesses accounted for 41.5% of the $111.5 million in revenues generated at Standing Rock, with the vast majority generated by the tribe’s two casinos. By comparison, private native agriculture, including cattle and buffalo ranching, generated revenues of $10.3 million. Federal, state and foundation payments totaled $52.4 million, or 47% of the reservation’s revenues, according to the report by the tribe.

Spirit Lake Casino, which overlooks Devils Lake, a major sport fishing destination in North Dakota, is an important source of revenues to support a slate of tribal programs, including youth recreation and support for the elderly, said Doug Yankton, chairman of Spirit Lake Nation.

“It helps fund a lot of those programs all over the reservation,” he said. “The tribe is really depending on it. Since COVID happened, it’s really put a damper on a lot of our needs.”

Also, he said, “It is our major employer,” providing about 300 jobs, with about half of those working during the pandemic.

Between 2014-2018, 61.8% of adults were employed and 19.6% of the population lived below the poverty level, according to census figures.

A spike in cases on the reservation even had tribal officials considering shutting down the casino again to help control the outbreak, he said.

“It has been discussed a couple of times,” Yankton said.

The casino closed its bingo hall and table games, but slots remain open, though reduced in number to enable distancing, he said. “Right now, it’s just limited to slot machines,” Yankton said.

Casino revenues have plunged by more than half.

“It’s really affected not only that business, but other businesses as well,” Yankton said.

The prolonged shutdown will force budget austerity when the tribal council meets soon to shape the new budget, he said.

“In my lifetime, I can’t recall anything this dramatic to our tribe and our reservation,” said Yankton, who is 53.

Some have compared tribal casinos to the buffalo herds that once sustained tribes on the Great Plains.

“It is a big component to our survival,” Yankton said of Indian gaming, “as was the buffalo to our grandparents and great grandparents. It’s just a different form of survival.”