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The increasing commercial gaming development opportunities taken on by Native American Indian tribes and First Nations today is obvious. More than a handful of tribes now have gaming operations located outside their tribal lands, financed by their own private equity funds.

In the following analysis, we explore the history and context of commercialization within indian gaming and its potential future direction, reveal the composition of current tribal commercial properties and portfolios, explore the advantages tribes rely on in commercial environments and consider how commercial tribal assets might fit into the future of the gaming industry.

Background: Tribal Gaming in Commercial Markets

Tribes with investment resources stemming from gaming cash flow initially were focused more on diversification outside of gaming—many had ownership positions in a variety of businesses, but investment capital was limited and risk was quite measured.

More recently, tribes have recognized the disproportionate value they bring to gaming and hospitality developments, and are increasingly comfortable investing in an industry they know well. This has redirected much of that investment back into the gaming industry.

Caesars Southern Indiana hasn’t changed names, but it has changed owners. The Eastern Band of Cherokee Indians, owners of Harrah’s Cherokee in North Carolina, bought it last year and now operates it.

Tribes involved in commercial enterprises have several things in common: (a) highly successful trust land-based operations yielding substantial free cash flow; (b) entrepreneurial and risk-tolerant enterprise structures; (c) communities willing to put otherwise distributable funds to work as investments; (d) long-term views on economic development; and, (e) the desire to be licensed by commercial gaming regulators. Of course, they also must have communities open to commercialization at all. Some, if not all, tribes involved in commercial gaming share these characteristics.

The road to commercial gaming investment by tribes dates back more than 15 years, having gained momentum following the Mohegan Tribe’s entry to the Poconos market in 2005, followed closely by the Seminole Tribe’s acquisition of Hard Rock International in 2006. Mohegan Chairman James Gessner reflects on the tribe’s past in gaming existentially in the emergence of commercial tribal gaming operations:

“We have always challenged ourselves to break barriers, not just for our own tribal members but for natives throughout Indian Country,” says Gessner. “For nearly 30 years, starting in the 1990s, we were the first Native American tribe to go to Wall Street and access public financing. We continued to charter new territories going off-reservation into commercial gaming in Pennsylvania in 2006, and more recently became the first Native American tribe to operate a casino in Las Vegas—all while expanding into international waters with properties in Canada and properties under development in South Korea.

“Our successes have given us the unique opportunity to help fellow tribal nations looking to diversify, offering expert advice and services that enable them to provide critical services to their citizens. And through these successes, we can contribute to the communities in which our tribal members live and in which we operate our businesses.”

Recent Developments and the Future Role of Tribal Commercial Development

The former Sands Bethlehem was bought by Alabama’s Poarch Creek Band, and is now Wind Creek Bethlehem

Given this context, how do moves by tribes into commercial gaming fit into the overall direction of the gaming industry? The answer is found, in part, in the general direction of gaming.

In late 2019, The Innovation Group reported on the palpable introspection surrounding organizational and structural changes among casino operators, and legitimate confusion regarding the strategic direction of the online and traditional casino gaming industries. Uncertainty was the result of several converging influences.

First, traditional growth opportunities through market expansion had diminished. If this was a hinderance for commercial operators, it applied more so to tribes that had typically operated on limited tribal trust land.

Second, generational change combined with the rise of new and disruptive technologies was and still is making it difficult to understand what gaming products and amenities will be most desirable in the future. Since that time, sports betting and online gaming have become potentially even more significant in tribal markets than in commercial ones.

The key trends we highlighted in 2019 included portfolio consolidation, real estate disaggregation (into REITs) and new business combinations. Tribal acquisitions (versus greenfield development) of more prominent gaming assets in commercial markets could have been mentioned as an accelerating trend. If the $300 million investment by Seminole Hard Rock Gaming in 2017 seemed impressive at the time, the more than $1 billion acquisition of the Sands Bethlehem property in Pennsylvania (now Wind Creek Bethlehem) by the Poarch Band of Creek Indians in 2019 set a new bar.

Arthur Mothershed, Poarch Creek tribal member and executive vice president of business development and government relations for Wind Creek Hospitality, commented, “Identifying and taking on projects outside of the tribe’s backyard has been a great way to leverage Wind Creek’s development and operating experience, and unleash tribal investment capacity. These growth opportunities will contribute critically to the long-term economic viability of our community.”

Last year, the Eastern Band of Cherokee Indians (EBCI) acquired Caesars Southern Indiana. “EBCI’s entrance into commercial gaming was calculated and methodical, a maneuver that had been under consideration for some time. All in the spirit of economic diversification for the tribe,” said Scott Barber, CEO of EBCI Holdings, LLC. “EBCI studied the pioneer work of the Mohegan, Seminole and Poarch Creek tribes and determined the best organizational structure and corporate strategy to enter the commercial gaming space.

“The conclusion of the ERI & CZR merger accelerated EBCI’s plans and created the opportunity to pursue Caesars Southern Indiana as our first acquisition. Hopefully, the first of many to come as EBCI’s commercial entity focuses on growth over the next decade.”

Las Vegas, the worldwide capital of commercial gaming, now also has become a part of the story with the acquisitions of the Palms by the San Manuel Band of Mission Indians and most recently, the Mirage by the Seminole Tribe of Florida.

Status of Commercial Casinos Owned and/or Managed by Tribes

Hard Rock International, owned by Florida’s Seminole Tribe, has many commercial casinos and hotels, including Hard Rock Atlantic City

By our count, there are now more than 25 properties in commercial gaming markets owned and/or operated by Native American tribes. The table at right demonstrates the geographic reach of tribal commercial portfolios.

The map below lays out the chart transactions geographically. Below, each dot represents a tribal or commercial casino. Each tribe is colored differently, with properties on sovereign land appearing in a light shade and properties in commercial markets in a darker shade. The size of the dot reflects the relative difference in the physical size of the properties measured by gaming positions.

Potential Strategic Advantages for Tribes in Commercial Markets

There are several strategic advantages enjoyed by tribes in the contest of outside investment. First, tribes entering the space have substantial cash availability. While there is a short-term opportunity cost to internal tribal investment or distributions, gaming tribes thinking in the longer term can dedicate significant capital to these projects. In fact, longer-term investments by tribes are a natural fit. Where commercial companies may seek an exit, tribes are investing for multiple generations.

Second, tribes can enjoy very low cost of capital in states with favorable gaming compacts, where EBITDA margins can be in the 50 percent-plus range. Finally, the drive for profitable off-site developments by tribes is, in a way, more personal. Growth to serve shareholders in commercial enterprises is obviously an existential goal; however, investing in assets for the equivalent of a large, extended family can be an even more powerful motivator.

Trend or Phenomenon?

Will tribal expansion into commercial gaming markets be a major factor in the future of the industry? We believe so. We see the expanding enterprise as equally attractive to large tribal operators and large commercial operators. While we have focused on strategic advantages enjoyed by tribes, large-cap commercial operators have their own. Included are scalability, a diverse cross-market customer base, and the ability to shift to an opco/propco, REIT-driven model with relative ease. (REITs are an unproven model for tribes on tribal land and otherwise rare in practice by tribes with the notable exception of the Eastern Band of Cherokee REIT deal with VICI Properties in Southern Indiana.) That said, tribes should continue to have an edge on cost of capital and benefit from the longevity of their enterprises, powerful differentiators that should help shape a successful future for tribes investing in commercial gaming.

Tribal Casinos w/ Mixed Portfolios (Tribal Casinos, Commercial Casinos, and/or Management/License Agreements)
As of March 2022
Click here to enlarge the chart.

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The following map lays out the above transactions geographically. Below, each dot represents a tribal or commercial casino. Each tribe is colored differently, with properties on sovereign land appearing in a light shade and properties in commercial market in a darker shade. The size of the dot reflects the relative difference in the physical size of the properties measure by gaming positions.

Click here to enlarge the map.

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February 25, 2022 marked the 35th anniversary of an important event in the history of tribal government gaming. On that day in 1987, the U.S. Supreme Court issued its opinion in California v. Cabazon Band of Mission Indians, 480 U.S. 202 (1987), a ruling that has come to be known as the “Cabazon decision.”

In that 18-page opinion, a 6-3 majority of the court upheld the right of the Morongo and Cabazon Bands of Mission Indians to conduct poker and high-stakes bingo games on their reservations, and denied the state of California any authority to regulate or prohibit those tribal activities.

The Cabazon decision marked an important tribal victory in what had been a long and contentious legal battle between tribes and states over which government had the power to authorize and regulate tribal gaming. Today we have a large, mature and profitable Indian gaming industry in this country. But 35 years ago, the future of tribal gaming was not at all clear.

From the very beginning, states vigorously opposed any efforts by Indian tribes to offer gaming activities to non-members. While tribes argued that, as governments, they had the right to establish laws, including gaming laws, on their reservations, the first Indian gaming cases from the early 1970s generally favored the states’ position of opposition to tribal gaming activities. These early tribal defeats were bolstered by the strong political opposition to tribal gaming by the Nevada gaming industry and national horse racing organizations.

But in 1976, the Supreme Court issued a ruling in an Indian tax case from Minnesota that offered a new and different method of analysis for certain tribal-state jurisdictional disputes. That analysis, Bryan v. Itasca County, 426 U.S. 373 (1976), proved to be pivotal as later tribal gaming cases made their way through the federal courts.

Cabazon was not the first Indian gaming case, but it was the first to reach the U.S. Supreme Court. The court had been asked to review other tribal gaming disputes in 1981 and 1982, but had declined to do so. By 1985, however, Indian gaming had exploded across the country, with more than 100 tribal gaming facilities nationally, with 25 of those in California alone. So in April 1986, when the state of California asked the court to review the Cabazon Band’s lower court victory, it was not a complete surprise that the court agreed to hear the case.

While the Cabazon case involved only two small tribes from California, both sides clearly understood that the decision would have national implications. As a result, 27 states filed four amicus (“friend of the court”) briefs supporting California’s position. Indian Country responded in kind, with 66 tribes filing eight briefs supporting the Morongo and Cabazon Bands.

Legal Arguments

The author with Brenda Soulliere at the Cabazon Band’s Fantasy Springs Casino Hotel. Soulliere was a cashier in the tribe’s bingo hall when it was raided by California authorities, and eventually led to U.S. Supreme Court’s landmark Cabazon Decision.

The Cabazon case was argued before the Supreme Court on December 9, 1986 and decided on February 25, 1987. While the decision of the court addressed many legal issues, two in particular are worthy of note.

The first was the organized crime issue. Looking at it 35 years later, it seems hard to believe that a major element of the states’ opposition to tribal gaming was the argument that tribes would be powerless to prevent “organized crime” from infiltrating their gaming operations. According to the state of California, “the possibility that the (tribal) bingo operations may be taken over by organized crime is a very serious concern ….”

But when asked by one of the justices at oral argument whether there was any evidence that organized crime had infiltrated the bingo operations of the tribes, the attorney for the state had to concede there was not. Further, the same issue had been argued to the lower courts in the Cabazon litigation and the Ninth Circuit Court of Appeals had earlier found that “there is no evidence whatsoever that organized crime exists on these Indian reservations.”

So, despite the strong efforts of the state to interject the organized crime threat into the case, the Supreme Court rejected that effort by noting that this theoretical concern by the state, while “legitimate,” was supported by no evidence and therefore could not overcome the strong tribal and federal interests it found in promoting Indian gaming.

The second important legal issue addressed by the court in the Cabazon decision was the applicability of the 1976 Bryan v. Itasca County tax decision to tribal gaming activities. In Bryan, the court had analyzed a 1953 federal law that was applicable in Minnesota, California and several other states. The court concluded that this federal law authorized those states to apply their criminal laws (i.e., those laws that prohibited certain conduct) to tribal activities on reservations in those states, but did not give the states the jurisdiction to enforce their civil laws (i.e., those laws that allowed but regulated conduct) against tribes. The issue in the Cabazon case was whether California’s bingo and poker laws should be characterized, to use Bryan’s terminology, as “civil-regulatory” or “criminal-prohibitory.”

At oral argument, this distinction was the subject of much discussion. Justice Antonin Scalia, in his first year on the high court, was particularly interested in this question and eventually made it quite clear that, in his view, California’s $250/game limit on charitable bingo games was “criminal-prohibitory” in nature and, therefore, enforceable by the state against the tribes.

And Chief Justice William Rehnquist—no friend to Indian tribes during his tenure on the court—seemed to want to limit Bryan to its particular facts when he stated that “all Bryan held was that a tax statute couldn’t be applied in Itasca County.”

In the end, however, a majority of the court (including the chief justice) reaffirmed the validity of the Bryan analysis and found the state’s bingo and poker laws to be civil-regulatory. As the court put it: “In light of the fact that California permits a substantial amount of gambling activity, including bingo, and actually promotes gambling through its state lottery, we must conclude that California regulates rather than prohibits gambling in general and bingo in particular. As a result, the court found that the state of California could not enforce its state laws against the tribes’ gaming activities, handing tribes nationally a major victory.”

Still Relevant

So, what is the legacy of the Cabazon decision? Why is it still relevant 35 years later?

First, the Cabazon decision led directly to the enactment of the Indian Gaming Regulatory Act. The three dissenting justices in the Cabazon case made much of the fact that Congress had not expressly authorized tribal gaming through legislation. Congress filled that void the following year. While Congress had considered Indian gaming legislation as early as 1983, no agreement could be reached until Cabazon was decided in 1987. That decision gave renewed impetus to those efforts, and in the fall of 1988, IGRA was passed by both houses of Congress and signed by President Ronald Reagan.

While IGRA was far from perfect and did, in fact, cut back some of the rights that the tribes had won in Cabazon, 35 years of experience has proven that IGRA provided a regulatory framework that has worked reasonably well for most tribes and has allowed tribal gaming to expand exponentially since its modest beginnings in the late 1970s.

Second, the Cabazon decision, coupled with IGRA, has dramatically improved the economies of much of Indian Country in the U.S. While the economic benefits of Indian gaming are not spread evenly among the tribes, the fact is that 250 tribes in 29 states are now operating more than 500 gaming facilities, many of them as large and luxurious as any in the world. Those facilities employ more than 350,000 people nationally and are pumping tens of billions of dollars of revenue into Indian Country annually, revenues that are allowing tribes to provide unprecedented numbers of programs, services and benefits to their members, and in many cases to their neighboring communities as well.

Finally, in addition to their direct benefits, tribal gaming revenues have provided much of Indian Country with the economic and political means to broaden and strengthen their sovereign powers. A number of major gaming tribes have taken their management expertise and financial resources and expanded into off-reservation gaming activities in Nevada, New Jersey, Pennsylvania and even overseas markets. Additionally, in many parts of the country, tribes have become important political players. In addition to campaign contributions, tribal votes can determine close elections in states like Arizona, California and Oklahoma—and politicians know that.

Tribes are also asserting their rights to surface and groundwater resources in ways and places not seen before. And many tribes, recognizing that gaming need not be an end to itself, are actively diversifying their tribal economies in important and creative ways, including clean energy projects, expanded agricultural efforts and the retail/commercial development of reservation lands.

Thirty-five years ago, no one could have predicted the dramatic impact the Cabazon decision would have on Indian County. February 25, 2022: an important anniversary in the history of tribal government gaming.

This article is dedicated to the citizens of the Cabazon Band: a small tribe that made a big difference.

Bring back the aggressive gaming approach.

Tribal leaders and design firms say the “be-safe” phrase is morphing into “go-big” for the new post-pandemic world. Pent-up demand meets the resumption of competition, requiring tribal leaders to perform a balancing act. Operators seek the sweet spot incorporating must-see attractions, comfortable environments and realistic budgets.

As the American market emerges from Covid-19, projects become more forward-looking, far-reaching and sophisticated. Some of the nation’s most prominent companies help tribal leaders step forward.

Project Optimism

HBG Design unveils several operations with tribal leaders positioning themselves both for near-term and long-term success. Dike Bacon, principal, notes that U.S. commercial gaming revenues set an all-time record in gross revenue of $53 billion in 2021.

If this is any indication of the health and vitality of the Indian gaming industry (NIGC has not released 2021 figures), business is booming, he says. “Visit any casino in almost any domestic market and customer traffic is extraordinarily strong—inflation notwithstanding—and you see that demand is there,” he says.

Drivable trips are answering the call of most travelers’ curiosity, which has fueled the need to create fresh and exciting offerings in regional markets where many tribal casinos are located, he adds.

“Competition and location are often the driving forces behind whether a property needs a ‘must-see attraction’ as a differentiator and a draw, but any such ‘wow factor’ has to align with the property’s brand and target audience,” Bacon says.

“I’ll give you an example—we’re designing a distinctive feature attraction for events, music, daytime leisure and active nightlife, as part of a tribal casino resort expansion. The property has a formidable reputation as a leading entertainment and gaming destination, located within 30 miles of a metro feeder market of over 1 million people.

Four Winds South Bend, South Bend, Indiana, hotel tower (abv.) and sportsbook

“Properties like this are able to support large-scale, high-impact, must-see attractions when their location combines a vibrant, diverse local population base and access to an equally strong destination customer who is willing to drive farther and stay longer to experience a distinctive amenity that is unmatched in the regional market.”

Bacon says HBG seeks innovative ways to help clients do more with less.

“This challenge covers a lot of ground, from designing public spaces and guest rooms that are easier and faster to clean and service to moving towards automation in concierge and casino hotel check-in,” he says. “Clearly, one of the biggest challenges for operators is to capitalize on current demand while still offering a great entertainment and hospitality experience with impressive customer service. Staffing in the entire hospitality industry (not just gaming) has been incredibly challenging.”

HBG designers work alongside owners to address these pressing issues. This includes creating more efficiently designed spaces that are exciting and entertaining but can also be operated with less staff.

“We’re creating more efficient kitchens and more diverse means of providing F&B to customers, including self-service and take-out venues. Valet parking is another key service area affected by staffing shortages,” says Bacon.

“More customers may be encouraged to self-park instead of valet, which means designing and locating parking garages that are more convenient, secure and customer-friendly. It also gives rise to designing more elevated and exclusive VIP entrance experiences reserved for a property’s best players, creating a smaller staffing pool to focus service on the largest contributors to the casino’s bottom line.”

Nathan Peak, AIA, LEED GA, practice leader/principal of HBG Design, says pent-up demand for entertainment and hospitality experiences motivate tribes to upgrade underperforming areas of their facilities.

“Given the performance of the industry and how it is bouncing back from the pandemic, we are confident that owners will remain in expansion and renovation mode for a while,” Peak says. “A client recently told us that their gaming resort property will likely be in a continuous state of evolution, renovation and building over the next several years to stay fresh for guests and maintain relevancy in the market.”

Another major influencer of the “continuous state of evolution” mindset is the continued passing of new legislation that drives change in tribal—and commercial—gaming properties, says Peak. As more states pass sportsbook legalization, that sets up new priorities for gaming properties who need “must-have” amenities to compete.

Tribes Take Assertive Stance

“Tribal gaming is definitely staying aggressive in terms of maintaining market share, especially in areas of the country where commercial gaming is growing and evolving,” adds Joe Baruffaldi, AIA, principal/project manager at HBG Design, and leader of HBG Design’s San Diego office.

Emerald Queen Casino Resort, Tacoma, Washington

“Tribes realize that knowledge is power; it’s what fuels a competitive edge,” he says. “There’s a greater need today for tribal casino owners to understand the nature of their customer base and harness the power of that knowledge—appreciating and leveraging not only where guests are coming from, but who they are as consumers.

“We partner with tribal gaming clients by helping them envision what the ‘tomorrow of their market’ looks like. When we’re able to anticipate changes in the marketplace, we can proactively respond by leading our clients to more competitively positioned design solutions.”

One of the highlights for HBG over the last few years has been its involvement in in the Four Winds South Bend casino in Indiana. The property is owned by the Pokagon Band of Potawatomi Indians, which operates three other casinos in Michigan.

Four Winds Casino embarks on a large-scale expansion of its South Bend property, designed by HBG, offering approachable luxury within a new 23-story, 317-key, 83-suite hotel tower.

The project includes a mix of vibrant amenities, to include a spa, convention area, meeting space, a ballroom, lounge, bar and grill, an outdoor rooftop swimming pool, and terraces with spectacular views.

The design incorporates regional elements and warm, rustic details with special attention and references to tribal influences and symbolism.

Combining Finance and Intelligence

“To remain competitive, tribes must make sure their facilities are an attractive destination as well as a local favorite,” says Brett Ewing, AIA, principal and executive director at Cuningham Group.

Swinomish Casino and Lodge, Anacortes, Washington

“Tribes should invest in dynamic spaces that allow for flexibility during changing times. Fantastic must-see attractions are compelling (and can be expensive). However, they must also have long-term benefits that entice guests to return time and time again. To achieve this, tribes should consider working with well-known entertainment brands that offer multi-event experiences.”

Leveraging new technology that is exciting for younger customers is another approach, he adds. Comfort and excitement can also be combined to help tribal gaming facilities remain competitive. Spaces should incorporate lasting materials and engaging services that make sense for customers to visit for years to come.

“Cuningham’s tribal gaming clients are not afraid of upgrading their spaces to create innovative and exciting spaces for customers,” he says. “Yet, we never encourage clients to create environments out of fear of not being able to compete. Rather, we ask them to consider what resonates with them and what experiences they want to share with their customers.

“For instance, we are designing the largest Gordon Ramsay Hell’s Kitchen restaurant to date for the Rincon Band of Luiseño Indians (in San Diego County), because the tribe had closed their buffet during the pandemic and they had the perfect opportunity to reimagine the space into an amazing restaurant. The project is scheduled to open this summer.”

The Emerald Queen Casino Resort in suburban Tacoma, Washington balances the eye-catching flash of a Las Vegas-style resort with memorable references to Puyallup tribal culture, he says.

Cuningham worked closely with the Puyallup Tribe to relocate the tribe’s existing gaming operations to a highly visible site along Interstate 5 near downtown Tacoma.

“Together, we found an innovative solution to fitting a large gaming facility gracefully into the urban city fabric,” Ewing says. “Due to site and infrastructure constraints, the gaming floor and amenities are strategically placed four levels above the ground floor, spanning over the city streets and supported structurally by two parking garages.

“This approach creates a breathtaking building that is visible from the highway and provides panoramic views to downtown and to the culturally significant Mt. Rainier and Puget Sound. The destination totals 310,000 square feet and includes approximately 100,000 square feet of slots and table games, a 2,000-seat event center, five food and beverage venues, two parking garages, and a 12-story, 155-room hotel.”

Cuningham’s work on the expansion of the Spokane Tribe Casino in Airway Heights, Washington is part of a larger, multimillion-dollar economic development plan that incorporates a hotel, convention center, dining, retail stores, entertainment venue, and a cultural center on the 145-acre site on U.S. Highway 2.

The casino expansion, which is currently under construction, will double the size of the casino floor. With 20,000 square feet of additional gaming space, the casino will be able to add more than 300 new slot machines and six table games. It also brings a large area for nonsmokers, a dedicated poker room, a sportsbook area, and new dining options.

In Lemoore, California, Cuningham collaborates with the Tachi-Yokut Tribe on an estimated $90 million, 24,000-square-foot expansion and remodel of the existing Tachi Palace Casino. The overall design goal is to modernize the entire gaming floor and give the property a fresh look.

After completion, it will include an expansive sports bar with the flexibility of both indoor and outdoor dining options, an expanded food market, and a new high-limit room. The layout will feature a more open plan, and symmetrical space with a new sculptural porte cochère that provides a sense of entry. The design is reflective of the Tachi tribe and their historic landscapes.

The guest arrival experience and flow into the building are inspired by the sloughs that run through the tribe’s native lands. This provides a strong connection to the nature of the landscape and the conceptual design developed by the Cuningham team.

The renovations also enhance improvements necessitated by the pandemic, including new HVAC and air purification systems, contactless technology, sanitizing stations, and additional space between gaming machines and tables. The buffet space has been replaced with a high-limit room and a grab-and-go market.

Boom Time

“The outlook for casino gaming resort properties is more exciting than ever,” says John Hinton, the director of Native American projects for Bergman Walls & Associates (BWA).

Event Center, Apache Casino, Lawton, Oklahoma

“While changing consumer tastes and the pressure to attract new and different types of customers have always and will continue to drive casino facility design decisions, it also presents a world of possibility. Today’s properties can feature both fantastic must-see attractions and exciting amenities that attract new patrons, as well as environments that are comfortable and familiar for existing patrons.

“If there is anything we have learned in recent years, particularly since the pandemic, it’s that flexibility, both in design and being open to new offerings, is key.”

Many of Bergman Walls’ recent and current projects have included designing flexible casino floors, as well as conference, event and entertainment spaces that can be easily be adapted or modified to meet ever-changing needs and demands.

The BWA design team has extensive experience conceptualizing, master-planning and designing gaming, entertainment, hospitality and mixed-use projects for both commercial and tribal gaming clients, he says.

One of BWA’s recent projects, Swinomish Casino and Lodge in Anacortes, Washington, added flexible event and entertainment spaces, along with a casino floor expansion that can easily accommodate future updates, a hotel tower renovation, and dynamic new dining and retail options.

For the Apache Casino Hotel in Lawton, Oklahoma, BWA remodeled portions of the existing casino and designed a major new event center that can be divided into smaller rooms for conferences or special events.

“As trusted advisers to our tribal gaming clients, what is essential now and in the future is being able to effectively identify trends they may not be aware of, or where we see opportunities at their properties,” Hinton says. “Can a simple renovation or refresh project create renewed interest? Can a fast-casual or upscale food hall and food trucks be a more cost-effective alternate to the traditional buffet, while creating new dining excitement?

“Can other buffets be updated with high-end finishes and upscale food offerings that transform tired spaces into destinations that keep diners and their dollars on site? Is their property prime for incorporating family-friendly or non-gaming amenities that make it a regional destination, while creating new revenue generation opportunities?”

BWA, in conjunction with Kenneth-Ussenko Design, completed an expansion at Morongo Casino Resort & Spa in Cabazon, California. It included a 65,000-square-foot casino gaming floor expansion that increased the size of the gaming floor by 30 percent, with new slots and table games, and a number of new bars and restaurants.

BWA also is currently working on tribal gaming projects in California and Washington that include master planning, sportsbook lounges and sports bars, hotels, a variety of dining and entertainment options, and other new amenities.

“What is also exciting for both BWA and our clients is that even though engagement in today’s sports betting and esports games can take place from virtually anywhere, sports fans and younger patrons are showing they want the experience of being engaged in a more communal setting with like-minded fans and players, with digital and virtual, interactive experiences,” Hinton says.

“And while these demographics are coming for the sportsbooks and esports lounges, they are enjoying other amenities on the properties, including live entertainment, spa experiences, and even traditional table games (albeit electronic ones) and slot machines that will continue to bring in the traditional casino customer who expects the familiar, but elevated offerings.”

This is a game-changer, he asserts, because it shows that today’s casino resort environment can offer something for everyone, with careful thought, strategic master planning and design execution, and effective marketing.

Throughout the industry, an awareness has returned that it’s time to compete. The pandemic left a huge financial and emotional footprint on all businesses, but the spirit of renewal has arrived. The sun has come up again.

Time to be aggressive.

The establishment of the Indian Gaming Regulatory Act (IGRA) and the National Indian Gaming Commission (NIGC) set the stage for widespread tribal gaming across the U.S. More than three decades in, that industry has transformed a number of indigenous nations, in some cases lifting them from poverty to the halls of power and even global influence.

Looking back, the triumph of tribal gaming seems almost preordained. But it wasn’t a sure thing, especially in the early days. The road was strewn with obstacles: opposition from states and lawmakers, resistance from commercial operators, pushback from tribes themselves, and the dauntingly slow march of legislation at the federal level and in dozens of jurisdictions.

The NIGC was the hub around which it all turned.

Pre-IGRA

In the early days, tribal gaming in California consisted of bingo halls and poker rooms that generated money for reservation services.

“It didn’t take a lot of capital to get it going,” says attorney George

Forman, who would later represent the Morongo Band in the landmark Cabazon v. California case. “You could get a steel Butler building for $100,000 or so, buy a bunch of cheap chairs and tables and have a high-stakes bingo game. The business was relatively low-risk, but also quite profitable. And with it came a measure of economic self-sufficiency and the resource with which to diversify the tribal economy.”

As tribal gaming grew—from a handful of operations in 1980 to more than 100 by the middle of the decade—California lawmakers began to take notice. “The facts on the ground changed,” recalls Glenn Feldman, who argued the Cabazon case before the Supreme Court. “Tribal gaming wasn’t going away. On the contrary, it was expanding dramatically.”

In Riverside County, home of both the Cabazon and Morongo Bands of Mission Indians, police and SWAT teams raided tribal operations, sometimes masquerading as customers before drawing their guns. They shut down gaming halls, arrested tribal members and seized their cash. Together, the tribes sued, and a federal district court ruled in their favor, holding that neither the state nor the county had the authority to impose or enforce their gambling laws on the reservation.

The original members of the National Indian Gaming Commission
(l. to r.): Joel M. Frank, Jana McKeag and Chairman Tony Hope

Later that year, when the Supreme Court reviewed the case, “the conventional wisdom in Indian Country was that the high court would overturn the lower-court decision,” says Feldman.

In his argument, he impressed upon the justices the urgency of the case. “Until there’s a commercial market for sand and sagebrush, these two tribes don’t have anything to offer,” he said. “And gaming is the way in which they can begin to provide for their own economic needs.”

The court considered a longstanding argument against tribal gaming—that it would be infiltrated by organized crime—but the claim didn’t hold water, says Feldman, and “the tone of the argument gave me considerable hope that maybe we could win this thing.”

And win they did, in a groundbreaking, game-changing decision that opened the doors to economic self-sufficiency for tribes across the U.S. The Cabazon decision directly led to the formation of IGRA, and in turn to the NIGC.

Not everyone was happy—including some tribes. Ojibwe leader Roger Jourdain of Minnesota’s Red Lake Band of Chippewa, along with “red capitalist” Wendall Chino of New Mexico’s Mescalero Apache Nation, considered IGRA an affront to the concept of tribal sovereignty, because it gave states a say in tribal gaming. As proof, they cited the commerce clause of the U.S. Constitution, which said Congress had “no power to regulate commerce with foreign nations… and the Indian tribes.”

They had a point, and they took it to court. But ultimately, they lost the challenge.

“IGRA did not come from Indian Country,” noted Ernie Stevens, Jr., chairman of the National Indian Gaming Association, in remarks made in 2018. “The act was a compromise that sought to balance tribal, federal and state government interests.

“While Indian Country never appreciated the compromise, we’ve made it work for our governments, our communities and our people.”

Logjams, Bottlenecks & Legal Snafus

Though IGRA became law in October 1988, the first NIGC commissioners—Jana McKeag, Joel Frank, and Chairman Tony Hope, a former Mutual of Omaha vice president and son of entertainer Bob Hope—were not installed until 1990 and 1991. As McKeag remembers, “It was not a priority at the time, for the Congress or the Department of the Interior,” the federal government body charged with overseeing the commission.

The initial commission staff, about 12 strong, was shoehorned into offices at Interior, near the General Accounting Office. (The space was so cramped, McKeag remembers, Hope jokingly posted a sign in the window with the plea, “GAO, help us!” The staff later found roomier accommodations on M Street.)

“In meetings with everybody from AGs, Nevada resort owners and senators like Harry Reid, the NIGC was being asked to use the regulations as a weapon to suppress Indian gaming—limit it to bingo.” —Jana McKeag, former NIGC commissioner

Meanwhile, the forces that would fight the growth of tribal gaming were gathering. Nevada Senator Harry Reid faced pressure from constituents in Reno and Lake Tahoe to keep California gaming at bay. Richard Blumenthal, then Connecticut attorney general, “did all he could to suppress the growth of tribal gaming” in that state, says McKeag; later, as senator, he would fight a proposal to simplify federal recognition for other tribes.

Underlying it all was a prevailing, patronizing view of Indians: that they were incapable of managing their own affairs, and that any cash-rich tribal business would be easily overtaken by criminal elements.

“As day follows night,” says Feldman, “organized crime would be there, and the tribes would be incapable of running it. That was the thinking.”

In 2000, when New York state considered expanding tribal casinos in the Catskills, an ad campaign openly accused the St. Regis Mohawk Tribe of mob ties. Those ads, complete with images of drug syringes, asked: “Are these the new neighbors we want?” The campaign was funded by Atlantic City casino owner Donald Trump.

The Mashantucket Pequots’ compact negotiations with Connecticut was a fits-and-starts process that took years. Trump again weighed in, telling a congressional committee that Foxwoods would be “a disaster,” and “the biggest scandal since Al Capone.”

“At the end of his testimony, all our mouths were dropping,” recalls McKeag. “He ranted and raved about how (the Pequots) weren’t ‘real’ Indians, that they were going to bring in prostitutes, that the mafia was running the show. Trump was petrified that the Connecticut tribes would take business from his New Jersey casinos. Which they did.”

While Chairman Hope was not beloved by the tribes, behind closed doors, he was a champion for their rights and for the letter of the law as laid down in IGRA.

“In meetings with everybody from AGs to Nevada resort owners and senators like Harry Reid, the NIGC was being asked to use the regulations as a weapon to suppress Indian gaming—limit it to bingo,” McKeag remembers. “To this day I can see Tony’s face as he said, ‘But that’s not what the law says.’”

At one highly charged meeting at the Hart Senate Office Building, New Jersey Senator Robert Torricelli argued against tribal gaming on the grounds that it would destroy Indian culture and bring an unsavory element to the reservation. Also in the room: Arizona Senator John McCain and Hawaii Senator Daniel Inouye, both longtime advocates for tribes.

When Torricelli left, an outraged McCain exploded, shouting expletives that reportedly were heard up and down the hallways, until Inouye managed to calm him down.

The tenor of the times may have best been captured in a 2013 speech from Rick Hill, chairman emeritus of the National Indian Gaming Association. Hill said federal and state governments weren’t afraid of organized crime, “they were afraid of organized Indians.”

Class Wars

As tribal gaming grew, there were endless debates about the definition of Class II and Class III casino games. The distinction was critical: per IGRA, tribes needed to negotiate compacts with the states before they could offer Class III, Vegas-style games.

“States were against gaming until they were for it. If tribes were going to get gambling, they figured they might as well be a partner of some sort, work with the tribes rather than fight against them.” —James Maida, founder and president, Gaming Laboratories International

Decisions on classifications depended “on where you were in the country and what judge you got,” says James Maida, founder and president of Gaming Laboratories International (GLI). The testing lab worked with tribes in a number of states, starting with Minnesota, then Wisconsin, South Dakota, Louisiana, Oklahoma and so on across the country, testing and reviewing the games, based on the jurisdiction. Maida, who is also an attorney, consulted with tribal attorneys “to bridge the gap between technology and the law, so everybody kind of knew what they were getting into as they navigated their new compacts.

“The lawyers did the lawyering, and I talked them through the technology—what the state was proposing and what the tribes were trying to propose.”

IGRA included the requirement that states enter into “good faith” compact negotiations with tribes that wanted to offer Vegas-style gaming. But in the ongoing fight against the industry, some states simply ignored that mandate.

In 1991, the Seminole Tribe sued the state of Florida for its refusal to bargain. The tribe won in district court, but a court of appeals tossed the decision, citing Florida’s immunity from legal actions under the 11th Amendment. That ruling, according to one tribal attorney, effectively “neutered” IGRA’s good-faith clause, gave the advantage back to the states, and stymied the tribes.

Frustrated, many tribes decided to do an end run around the resistant state governments. “They basically said, ‘If you don’t want to negotiate, we’re going to just use Class II games, so we don’t have to split any money or revenue-share,’” says Maida. This was a language state lawmakers understood.

Florida and other states were “against gaming until they were for it,” Maida adds. “They became pragmatic. If tribes were going to get gambling, they figured they might as well be a partner of some sort, work with the tribes rather than fight against them.”

NIGC Now

Starting in the 1990s and over the past three decades, the NIGC has gone from an understaffed, overworked and sometimes overlooked agency to a mature body presiding over a powerhouse industry. It now employs some 100 legal staff, compliance officers, auditors, accountants, IT and security experts, occupying eight regional offices and the headquarters in Washington, D.C.

“Until there’s a commercial market for sand and sagebrush, these two tribes don’t have anything to offer. And gaming is the way in which they can begin to provide for their own economic needs.” —Glenn Feldman, attorney who argued the Cabazon case before the U.S. Supreme Court

Collectively, they monitor and support an industry that generated overall revenues of $34.6 billion in 2019. While 2020 was a different story—due to Covid-19, tribal casinos generated $27.8 billion, on par with 2012—things apparently rebounded in 2021; according to American Gaming Association research director David Forman, tribal gaming likely brought in $35 billion to $40 billion last year, and “there’s every indication” the industry has “had a strong recovery.”

Through the ups and downs, the NIGC, in keeping with its statutory responsibility and mission, “has made our training and our outreach broader, using virtual formats to make it more efficient,” says current Chairman

Sequoyah Simermeyer. It worked with other federal agencies, including the Centers for Disease Control and Prevention and the U.S. Department of Health and Human Services, on its pandemic response, working on a peer-to-peer basis to protect tribal operations and communities.

“Today, we have a strong focus in four areas,” says Simermeyer. According to the website, they include:

• Industry integrity. Protecting the valuable tool of Indian gaming that in many communities creates jobs, is the lifeblood for tribal programs, and creates opportunities for tribes to explore and strengthen relationships with neighbors.
• Agency accountability. Meeting the public’s expectation for administrative processes that uphold good governance practices and support efficient and effective decision-making to protect tribal assets.
• Preparedness. Promoting tribes’ capacity to plan for risks to tribal gaming assets including natural disaster threats, the need to modernize and enhance regulatory and gaming operation workforces, or public health and safety emergencies.
• Outreach. Cultivating opportunities for outreach to ensure well-informed Indian gaming policy development through diverse relationships, accessible resources, and government-to-government consultation.

“We’ve learned a lot over the last two years about the strength of tribal regulatory bodies, tribal lawmakers and operators working together, and the NIGC providing support and participating in that conversation,” says Simermeyer. “Today there are 500-plus operations and 248 licenses on Indian lands in 29 U.S. states.”

Tribal gaming has grown beyond the reservation to markets including Las Vegas, Atlantic City, and even Europe and Asia.

“The tribes are taking the expertise they’ve developed on the reservation and the resources they’ve been able to generate from on-reservation gaming,” says Feldman.

George Forman concurs. “Tribal gaming is the singular economic development approach in Indian Country that has truly worked. More than anything else, it’s made tribes an important part of our country’s fabric in ways they weren’t before. If not for the Cabazon v. California decision, there would not have been the Indian Gaming Regulatory Act. And without IGRA and the NIGC, you wouldn’t see what you see today in Indian Country—but not just in Indian Country. In California alone, tribes probably employ 50,000 or 60,000 people,” including many non-tribal members. “In their casinos, they generate billions of dollars in economic activity that extends far beyond the reservation boundaries.”

Building an economic pipeline “was a real challenge for tribes,” agrees

McKeag. “If we hadn’t done what was intended under the act, gaming tribes would still be doing bingo.”

Simermeyer adds, “It’s important to note that not all tribal communities have had the same level of success” as the Shakopee Mdewakanton, the Seminoles, the Mashantucket Pequots, the Mohegans and other industry leaders. “Some operations are modest. They are really focused on creating jobs and building the local regional economy”—just as they did at the dawn of tribal gaming.