Longtime observers of the Las Vegas casino scene might have been stunned to see the May announcement that the shimmering Palms Casino Resort had been purchased from Station Casinos for $650 million.
It wasn’t the price tag that was surprising, but the buyer: the Highland, Calif.-based San Manuel Band of Mission Indians.
Although the transaction was heralded by some as a new chapter for the tribe, the deal itself wasn’t unique. Back in March, the Mohegan Tribal Gaming Authority of Connecticut opened the Mohegan Sun Casino at Virgin Hotels Las Vegas (formerly the off-Strip Hard Rock Hotel and Casino).
Meanwhile, the Seminole Tribe of Florida has also expressed interest in making its presence felt on the Strip. At a time of substantial transition in Las Vegas, that’s a very big deal. In May, the Seminole signed a 30-year gaming compact extension with Florida that promises to generate billions for the state and further expand the tribe’s remarkable casino success story. (It also enables former President Donald Trump to pursue a casino plan for Trump National Doral golf club and gives the green light for real estate billionaire Jeffrey Soffer to do the same at the legendary Fontainebleau in Miami Beach.)
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It all has the potential to start a new chapter in the Las Vegas gaming story as outside bankrolls and players come to try their luck in the casino industry’s historic center of the action. Although having a Las Vegas property is always good for a casino brand, I think it’s also important for Las Vegas to have a diversity of operators who bring fresh ideas and a willingness to invest in a place at a symbolic moment in that history.
Tribal casinos and business models have evolved mightily since the passage of the 1988 Indian Gaming Regulatory Act. Today, tribal casinos generate nearly half the gaming industry’s profits.
That has led to dramatic quality-of-life improvements for some tribes, to in-fighting and disappointing results for others. As Randall K.Q. Akee, Katherine A. Spilde and Jonathan B. Taylor observed in the Journal of Economic Perspectives, “While on average there have been large improvements, the effect of Indian gaming varies tremendously across tribes. Some tribes have had spectacular successes; others have found gaming to be a small part of their economic portfolio and of limited importance to their tribal government revenues and communities.”
But even small improvements have been superior to many of the attempts by the federal government to act in the tribes’ best interests. As the authors of the economic study put it, “Federal programs did not put things right.”
The Mohegan Sun Casino at Virgin Hotels Las Vegas awaits its first guests prior to its March 25 opening
As Tim Hyde offered in the American Economic Association a few years ago, “Gaming helped jumpstart economic development in Indian Country, but tribal governments still need to diversify their economies and defend tribal budgets. Hopefully, the new tribal institutions and administrative expertise that have grown up around the Indian gaming economy will help achieve these goals.”
Increasingly, experienced tribal operators with impressive success records are looking for new markets to conquer.
The devastating impact of the COVID-19 crisis on some tribal lands gained heightened public awareness in recent months and sent a terrible reminder that many basic improvements are still needed in Indian Country.
While it’s clear that casino profits aren’t a panacea for the tribes, economic diversity and off-reservation investment are more important than ever.
The tribes’ Las Vegas gambits give us a glimpse at a possible future for other Native American casinos that are fast-approaching a growth wall on the reservation. By taking the skills gained and the bankroll amassed to new markets, the potential to expand, prosper, and diversify is possible.
The recent transactions by Native American casino operators in Las Vegas are investments in the future of all concerned.
It gives gaming industry observers a reason to celebrate at a time when we can all use something to cheer about.
