COVID-19 Prompted Tribes to Diversify Their Businesses

COVID-19 has exposed the shortcoming of tribal nations’ overreliance on gambling income. In the wake of the terrible pandemic, more and more tribes are looking to diversify their sources of revenue. The Associated Press analyzed the trends and spoke with tribal spokespeople.

The Pandemic Highlighted the Need for New Revenue Streams

As reported by the news outlet, the pandemic left some tribes pretty anxious. Chair Rodney Butler from the Mashantucket Pequot Tribal Nation noted that disasters can bring casino revenues from millions to zero overnight, affirming the need for additional revenue streams.

The Mashantucket Pequot, a tribe comprised of around 1,000 people, is now trying to expand into the federal government contracting business. The tribe is also planning to build a family resort with a 91,000-square-foot water park that is expected to open in 2025 and would become a major source of revenue. Tribal leaders confirmed that the pandemic showed them that overreliance on casino revenues can get them into trouble.

Meanwhile, the Match-E-Be-Nash-She-Wish Band of Pottawatomi Indians in Michigan, also known as the Gun Lake Tribe, announced a 25-year plan to develop the area around its casino into a housing and hospitality sector with new homes, shops and a new hotel.

The Little River Band of Ottawa Indians, another Michigan-based tribe, has expanded into fast food and is selling NativeWahl burger franchises to other tribes in partnership with Wahlburgers.

The Nottawaseppi Huron Band of the Potawatomi in Michigan, on the other hand, managed to cushion the impact of COVID-19 thanks to its non-gambling businesses.

Setting up New Businesses: Costly but Crucial

The diversification trend was amplified following the pandemic. The Center for Indian Country Development at the Federal Reserve Bank of Minneapolis noted that branching out into new businesses might be costly but is the smart thing to do.

In a report, the center pointed out that many tribes such as the Mashantucket Pequot Tribal Nation are looking to join forces with the federal government. For example, Command Holdings, a non-gambling company owned by the Mashantucket Pequots, recently acquired the Florida-based management consulting firm WWC Global.

Jon Panamaroff, chief executive of WWC Global, praised the Mashantucket Pequot Tribe for expanding into sectors other than gambling. He applauded the tribe for not shying away from diversification.

Diversification Will Not Replace Tribal Gambling

The Associated Press noted that there are other reasons for the tribes’ diversification efforts as well. The news outlet cited the aging of traditional casinos and the growth of online gambling and the proliferation of commercial gambling companies as part of the reason why tribes are now diversifying their businesses.

However, this isn’t to say that tribal entities are giving up on gambling. On the contrary, some are even planning an expansion of their gambling facilities and offerings. The most successful tribal gambling entities are proceeding with the construction of new casinos and resorts, hellbent on competing with their commercial counterparts.

Mohegan, for example, is going international with a casino resort in South Korea that is set to open in a few months. The Chickasaw Nation in Oklahoma is eyeing the construction of a new casino and entertainment complex on Coney Island, New York.

While diversification will not replace tribal gambling, it will be an important safeguard for tribal nations, should another disaster impact the market.