fedgazette

The industry that keeps growing and growing and ...

David Fettig - Editor

Published July 1, 1992  |  July 1992 issue

Minnesota tribal officials acknowledge that the gambling boom will have to end sometime; that at some point the market will become saturated. And some suggest that not only will the boom end, but that the tribes' virtual monopoly of the casino-style market may evaporate entirely as the state comes under increasing pressure to allow casino games outside the reservation.

"Our goal is not necessarily to be in the gaming business," says Roseann Campagnoli, director of public affairs for Mystic Lake Casino, a new $15 million facility in Prior Lake, near the Twin Cities. "This is about economic development and self-sufficiency. We know this is not going to last forever."

Campagnoli says the Shakopee Mdewakanton Sioux Tribe, which operates Mystic Lake, is using the revenues from the casino to raise the quality of life of tribal members and to spur other economic plans. "We intend to never go backwards again."

The Shakopee Mdwewakanton Sioux are in the start-up phase of developing a corporation that will allow the tribe to diversify into light manufacturing. The Mille Lacs Chippewa have recently put their casino profits into a $15 million bond issue to finance construction projects for a reservation school, day-care center, health clinic, water tower, roads and ceremonial buildings.

The Red Lake Band of Chippewas has purchased a resort, created an economic development commission and set aside funds for enhancement of timber lands. Other tribes have used their casino profits for such projects as building a wood chipping plant, creating a low-interest fund for entrepreneurs, expanding forestry staff and creating programs for business training and start-up assistance for new businesses.

If you build it, they will gamble

Regardless of the future of casino gambling, the present is leaving an indelible mark on the Upper Midwest. This is especially true in Minnesota, where 14 tribal casinos employ nearly 8,000 (about 75 percent are non-Indian), pay wages of over $80 million a year and earn revenues of about $900 million (according to 1991 state estimates). One state study predicts casino employment at over 11,000 in two years, which would place the industry at number 5 among state corporate employers, behind Rochester's Mayo Clinic.

What is perhaps most striking about those figures is the speed with which the industry has grown. It has only been since 1988 and the passage of the Indian Gaming Regulatory Act by Congress that tribes have been allowed to move beyond bingo and into casino-style ventures. And most of that growth has occurred in just the past two years. About $70 million will be spent on construction for new or existing casinos in Minnesota during 1991-92, according to a study by Midwest Hospitality Advisors.

Tribes in other states—especially in the Midwest—are also capitalizing on the casino boom. North Dakota is the exception. Large-scale tribal gambling has been slow to develop, although in recent weeks the Standing Rock Sioux Tribe proposed to build a $15 million casino south of Mandan. The state's governor, however, has rejected the proposal.

A governor's signature on a casino deal is crucial to all tribes because of the nature of the Indian Gaming Regulatory Act. The law was passed by Congress in 1988 following years of wrangling among tribal officials and Nevada and New Jersey gambling concerns. A primary purpose of the Act was to provide a statutory foundation for tribal gambling operations as a means of promoting economic development, self-sufficiency and strong tribal government.

The Act affirms Indian sovereignty over gambling, but tribes may not conduct casino-type gambling without a valid tribal-state compact. It also ensures that tribal governments are the sole owners and primary beneficiaries of gaming.

Minnesota's rapid expansion of tribal casinos, made possible by early development of compacts between the state and tribes, means the state may have a lock on its competitive advantage over other states, according to a Minnesota Planning Agency report. The state is the largest center of casino gambling outside of Nevada and New Jersey. Considering that the state is a natural draw for tourists, Minnesota will likely maintain its lead over any others, the report maintains, as long as the casinos continue to improve.

In the end, however, while Little Six's Campagnoli acknowledges the uncertainty of the future of Indian-run casinos in Minnesota, she is also matter-of-fact about the present appetite for gambling: "We haven't seen the peak yet."

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