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Tribal Governments Embrace Commercial Gaming Expansion at G2E

At the Global Gaming Expo (G2E), tribal governments venturing into commercial gaming showcased their ongoing momentum, with no signs of slowing down. Recent acquisitions, such as the San Manuel Band of Mission Indians purchasing the Palms and the Seminole Tribe of Florida acquiring the Mirage, highlight a significant trend of tribes expanding their reach beyond reservations.

A New Era of Collaboration and Competition

The session titled “Indian Gaming Goes Commercial,” moderated by James Klas, featured insights from industry leaders like Erin Copeland, chief legal officer for the San Manuel Band, and Bobby Soper, CEO of Sun Gaming & Hospitality. Klas noted the evolution of the relationship between commercial and tribal gaming over the past 36 years since the Indian Gaming Regulatory Act was enacted.

  • Key Observations:
    • Early relationships were often adversarial; now, collaboration is more common.
    • Tribes are increasingly bringing their capital and expertise to commercial gaming.
    • Approximately a dozen commercial casinos in the U.S. are now owned by Native Americans.

Klas emphasized that this shift has created more opportunities for tribes, with significant gaming operations now under tribal ownership. The growth includes thousands of gaming machines, table games, and hotel rooms, indicating a robust presence in the commercial gaming landscape.

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Diversification Beyond Reservations

Soper shared the Mohegan Tribe’s journey into commercial gaming, highlighting their decision to diversify off the reservation in the early 2000s. This strategic move allowed the tribe to leverage its gaming expertise and expand into new markets, including Pennsylvania, Canada, and South Korea.

  • Diversification Highlights:
    • Mohegan Sun’s acquisition of Pocono Downs Racetrack in 2005.
    • Expansion into international markets, enhancing financial stability.
    • Increased willingness among tribes to explore commercial opportunities.

Soper pointed out that the perception of relinquishing sovereignty has changed, with tribes now recognizing the benefits of diversifying their operations. This shift has enabled tribes to collateralize assets, making them more attractive to lenders and facilitating growth.

Learning from the Las Vegas Experience

Copeland discussed the San Manuel Band’s journey into commercial gaming, emphasizing the importance of learning from Las Vegas operators. The tribe’s investment in hospitality education, including a $9 million contribution to UNLV, has fostered connections that paved the way for the Palms acquisition.

  • Strategic Insights:
    • The influx of talent from Las Vegas has enhanced tribal gaming operations.
    • Long-term perspectives guide tribal investments, focusing on future generations.
    • Realistic goal-setting is crucial for successful acquisitions and operations.

The Palms reopened shortly after its acquisition, but Copeland acknowledged the challenges of rushing to open for major events like the NFL Draft. Setting achievable goals and timelines is essential for managing expectations and ensuring operational success.

The Future of Tribal Gaming

As the gaming landscape evolves, Soper emphasized the necessity for tribes to diversify their revenue streams. He warned that the future of gaming will likely see a shift towards iGaming, which could impact traditional land-based operations.

  • Future Considerations:
    • Anticipated changes in the gaming landscape over the next decade.
    • The importance of diversifying income sources to mitigate risks.
    • A proactive approach is essential for tribes to adapt to industry changes.

Soper’s insights underscore the urgency for tribes to begin diversifying now, as the reliance on traditional gaming revenues may diminish. The need for alternative income sources, whether through gaming or non-gaming ventures, is becoming increasingly critical for the sustainability of tribal economies.

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