Pandemic’s bite spurs tribes to diversify beyond casinos
MASHANTUCKET, Conn. — When the COVID19 pandemic shuttered Foxwoods Resort Casino in Connecticut for three months in 2020, its owners, the Mashantucket Pequot Tribal Nation, had to reckon with decades of relying heavily on gambling as the tribe’s main source of revenue.
“The fact that the casino revenues went from millions to zero overnight just fully reiterated the need for diverse revenue streams,” said Tribal Chairman Rodney Butler.
The 1,000-member tribe has since expanded its efforts to get into the federal government contracting business, making it one of several tribal nations to look beyond the casino business more seriously after the coronavirus crisis. Tribal leaders and tribal business experts say the global pandemic has been the latest and clearest sign that tribal governments with casinos can’t depend solely on slot machines and poker rooms to support future generations.
In Michigan, the MatchE-Be-Nash-She-Wish Band of Pottawatomi Indians, or Gun Lake Tribe, recently announced a 25-year plan to develop hundreds of acres near its casino into a corridor with housing, retail, manufacturing and a new 15-story hotel. A nongambling entity owned by the Little River Band of Ottawa Indians, also in Michigan, is now selling “NativeWahl” burger franchises to other tribes after forming a 2021 partnership with Wahlburgers, the national burger chain created by the celebrity brothers Paul, Mark and Donnie Wahlberg.
Some tribes, with and without casinos, have gotten involved in a wide range of nongambling businesses, such as trucking,
construction, consulting, health care, real estate, cannabis and marketing over the past decade or longer while others have been branching out more recently.
“While enterprise diversification can come with costs, its necessity became clear during the early phases of the pandemic, when tribally owned casinos were shut down to mitigate COVID-19 transmission and gaming-dependent tribes were left with little incoming revenue,” according to a new report from the Center for Indian Country Development at the Federal Reserve Bank of Minneapolis.
The report found that many tribes are increasingly doing business with the federal government, especially the Department of Defense.
The Mashantucket Pequots’ nongambling entity, Command Holdings, last year made its largest acquisition to date: WWC Global, a Florida-based management consulting firm that predominantly works with federal agencies, including the Defense and State departments. WWC announced in December that it had been awarded a $37.5 million
contract supporting the federal Cybersecurity and Infrastructure Security Agency.
WWC Global CEO Jon Panamaroff applauded the Mashantucket Pequots’ casino and hospitality business but noted that it can be subject to the “ups and downs of the market,” making it important to branch out economically. A member of the Sun’aq Tribe of Kodiak, Alaska, he credited the Mashantucket Pequots’ tribal leaders with doubling down on diversification efforts during the pandemic instead of “shying away and trying to hunker down.”
Butler said the tribe hopes nongambling revenues, including from a planned family resort with a 91,000-square-foot water park that’s expected to open in 2025, will eventually comprise 50% to 80% of the Mashantucket Pequots’ portfolio, providing “stability and certainty” when another challenging event undoubtedly happens.
“You think about the financial crisis in ’08 and now COVID. And so, something’s going to happen again,” Butler said. “We’ve learned from past mistakes, and we want to be ready for it in the future.”