US Tribes Sustained $500m Loss In 2009

Indian gaming revenues declined by $500m to $26.2bn in 2009, marking the first year tribal casinos have lost money since Congress passed the Indian Gaming Regulatory Act of 1988, the deputy executive director of the National Indian Gaming Association said Wednesday.
Jason Giles, who is also NIGA’s general counsel, said Indian gaming lost more than 100,000 jobs last year after reaching a peak of 600,000 jobs in 2008.

Meanwhile, federal tax revenues paid by tribes shot up 30 percent to $9.4bn in order to pay for unemployment benefits given to workers laid off by Indian casinos.

Despite these dismal numbers, the Indian gaming industry, is “staying strong and remains steady,” Giles said.

“It’s not a big hit – certainly not as big a hit as Nevada and New Jersey are taking,” he said.

While gambling tribes in California and Connecticut are bearing the brunt of the devastation wrought by the Great Recession, tribes in Alabama, Florida and Oklahoma are doing extremely well, according to Giles.

Two hundred and thirty-seven tribes in 28 states are operating gambling businesses, and 24.5 million people visit Indian casinos each year.

Giles also noted that NIGA polling indicates 75 percent of Americans believe Indians benefit from tribal gaming -- up from 50 percent 10 years ago.

Giles delivered his remarks at the 17th annual Southern Gaming Summit in Biloxi, Mississippi where participants are paying little attention to the massive oil spill nearby  in the Gulf of Mexico.

Dennis M. Farell, Jr., managing director of gaming, lodging and leisure for Wells Fargo Securities, even speculated Mississippi casinos may benefit from the influx of new workers and volunteers who are helping cope with the disaster.

Paul Alanis, principal and chief executive officer of the Silver Slipper Casino in Bay St. Louis, Mississippi , said the oil slick is just the latest in a string of calamities for the local gaming industry including Hurricane Katrina and the Great Recession.

“We don’t have locusts to worry about yet, but you never know,” Alanis said.  
 
In another Indian gaming development, Peggy Coleman announced she plans to retire July 2 after serving eight years as acting general counsel for the National Indian Gaming Commission (or NIGC).

“I think it doesn’t hurt to change general counsels every now and then,” she said.

Coleman, a non-Indian attorney, shrugged off criticism from some tribal officials who claim she has become too powerful and should step down.

“Ultimately, the power belongs with the chairman, not with the general counsel,” she said.

Jess Green, a Chickasaw attorney from Ada, Okla., praised Coleman for helping tribes cordially resolve their differences over non-casino operations like bingo.

“I don’t know what we’re going to do (when Coleman retires),” Green said.

Both Giles and Coleman expressed concern that President Obama’s nomination last week of Tracie Stevens to be the new chairwoman of the National Indian Gaming Commission might be blocked.

Stevens, 42, is a member of the Tulalip Tribe in Washington state and currently works as a senior adviser to Larry Echo Hawk, the assistant secretary for Indian Affairs at the Department of Interior.

Before she can begin her new job, Stevens must appear before the Senate Indian Affairs Committee for a confirmation hearing. A hearing has not yet been scheduled.

If the committee votes in favor of her nomination, the next and final step would be a vote by the Senate.

“There are ways to put holds on such nominations. It happens all the time,” Coleman said. “So she could be chairwoman within a month or she could be left for months and months.”

Giles said confirmation hearings can easily get bogged down in partisan politics, especially in an election year. “We hope that doesn’t happen because the (NIGC) chairmanship is where policy is directed and that’s where policy is made. We really need someone at the helm there who is going to be permanent,”  he said.

During his confirmation hearing, Echo Hawk “had some very strong words said against him,” Coleman said, so the NIGC staff intends to prepare Stevens “for those kinds of questions.”

Coleman also said the NIGC has gotten off to “a slightly rocky start” this year because it does not have a permanent chairman. George Skibine has been serving as acting chairman since Phil Hogen departed last October.

If confirmed, Stevens will face a host of delicate issues and the most controversial is likely to be Internet gambling, according to Giles.

The National Indian Gaming Association represents 184 out of 237 gaming tribes, and Internet gambling dominated a NIGA meeting last month in San Diego.

NIGA members surprised their leadership by voting 26-4  to reject a resolution expressing opposition to legislation in Congress opposing the Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006.

Many tribes, including some that do not have gambling businesses, consider Internet gambling an economic opportunity that should be explored, Giles said.

In response to last month’s overwhelming vote, NIGA leaders are preparing an economic impact study on Internet gambling, which they hope to unveil to members during a meeting in October.

The possibility that Congress will pass a bill to weaken or overturn UIGEA by October is “not too much of a threat,” Giles said.

Rep. Barney Frank, D-Mass., has introduced a bill to overturn UIGEA and require the Department of Treasury to regulate Internet gambling. Frank's bill is scheduled for a hearing May 19 in the House Financial Services Committee, which Frank chairs. 

A companion bill authored by Rep. Jim McDermott, D-Wash., is scheduled for a May 26 hearing by a House Ways and Means subcommittee.