Tribes build business beyond casinos

Marketplace Staff Aug 27, 2009

Tribes build business beyond casinos

Marketplace Staff Aug 27, 2009


Tess Vigeland: Foxwoods Casino was long one of the biggest in the northeast U.S. But the Connecticut resort has been down on its luck in recent years. Yesterday, the Mashantucket Pequot Tribal Nation decided to restructure its debt because it took a card on 16. The National Indian Gaming Association says the tribes that own casinos ring up $26 billion in gross profits each year. But a growing number aren’t betting on the black jack tables or slot machines to fill their coffers indefinitely. Brian Bull reports from Wisconsin Public Radio.

BRIAN BULL: The Lucky Eagle Casino is a 90 minute drive south of Seattle. It’s run by the Chehalis Tribe. And tribal chairman David Burnett says gambling’s been good to his people. It rings up nearly $15 million annually, for health care, education, and roads.

DAVID Burnett: As recently as 1999, the tribe was functionally bankrupt. We’re in a much better position today than we have been in a long, long, time.

But the Chehalis didn’t want to bank on gambling forever. Last year, they decided to diversify their portfolio, with what you could say were more liquid assets.

Five minutes drive away — at the Great Wolf Resort — tourists ride rolling waves at a sprawling water park. The resort cost $100 million to build. Burnett recalls the grand opening of the water park last spring.

Burnett: I got to be one of the first to go down the big waterslide. And it was a little humbling when I had some 16-year-old in a lifeguard suit tell me that if I didn’t stop horsing around he’d kick me out of the park.

Burnett says some tribal members were skeptical, but over the last year the resort has kept afloat just fine.

Other Native American tribes across the country have started similar ventures that don’t bank on gambling. There are tribes running shopping malls, chocolate factories, and golf courses as well.

Joe Kalt co-directs the Harvard Project on American Indian Economic Development. He says this trend has says sprung – in part — from casinos.

JOE KALT: Gaming operations have turned out to be fairly good training grounds. So you’re starting to develop a lot of managerial talent out there. And of course, it manifests itself as a little bit of entrepreneurship!

Kalt says casino revenues started to flatten out even before the recession, in part because more and more casinos sprung up around the country. That’s why tribes like the Forest County Potawatomi of Wisconsin started looking for new ventures. The tribe launched a business development corporation in 2003. Based in Milwaukee’s historic district, its plush offices sport frosted windows and leather seats. Pepi Randolph is its VP for sales and marketing.

Pepi Randolph: Tribes have to be aware that gaming’s not going to last forever. And it’s going to be subject to some of the same impacts that affect economies every day. What we hope to be able to do is be able to make wise investments. To build our portfolio, to grow our base, so that we’re going to one day be able be that strong sibling to gaming for our tribe.

Randolph says they have 15 different companies nationwide. The Potawatomi say they make cautious, low-risk investments. And while not the sexiest portfolio, Randolph credits their investment strategy for a 42 percent growth in revenue last year.

JAMES Crawford: The sky’s the limit for us, we continue to expand.

That’s James Crawford, a former chairman of the development corporation. He says tribal enterprises aren’t just expanding beyond the reservation but across the globe. Right now, one of their design firms may score a deal constructing streets and buildings in India.

Crawford: I can remember getting off the plane in Mumbai when we got there, and I was like, “Whoever woulda thought this small town Potawatomi boy would be standing in the streets of Mumbai, looking to do business?”

Who would’ve bet on that?

In Wisconsin, I’m Brian Bull for Marketplace.

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