Michigan Tribal Casinos Bounce Back After Years of Dwindling Revenue

The casino industry in Michigan is witnessing quite the windfall, especially with online casinos shattering revenue records. Interestingly, one largely overlooked section of the gambling sector in the state—tribal casinos—is also experiencing some sort of boom. These tribal casinos are affiliated with local communities and through their revenue, they provide tribe members with basic amenities.

During the pandemic, these tribal casinos, like all of Michigan’s gambling industry, took a financial hit, reducing their positive impact on the community. But as recent records now show, tribal casinos are back to pre-pandemic times and so are payments to local communities.

The US Congress introduced the Indian Gaming Regulatory Act back in 1988 which allowed local tribes to establish casino operations. Revenue generated by tribal casinos were targeted at providing amenities like medical care, education and housing for local community members. The National Indian Gaming Association also revealed that tribal casinos are an employer of labour, with half the employees at the casinos being Native Americans.

As a result of their contributions, regulatory agencies have generally excluded tribal casinos from taxes. In Michigan, there are about 12 tribes owning a total of 23 retail and online casinos in the state. Back in 2019, these tribal casinos contributed immensely to the development of their tribes. Reports show, however, that these financial contributions dropped significantly until late 2021 when tribal casino revenue began to bounce back.

At the end of 2019, Michigan tribal casinos made $30.48 million in payments to local tribes. This figure dipped by a whopping 18.7% in 2020, also impacting the total revenue of tribal casinos. Recently, the Michigan Gaming Control Board published the 2022 Tribal Gaming Report which showed that in 2021, Michigan tribal casinos made a record payment of $31.5 million to communities.

The Saginaw Chippewa Indian Tribe was the largest contributor both in 2019 and in 2021. Saginaw Chippewa are the owners of Eagle Casino & Sports Michigan and Soaring Eagle Casino & Resort. The tribe contributed $6.1 million and $7 million in 2019 and 2021, respectively, despite not being the highest grossing online casino or sportsbook across those years.

A few months ago, the Grand River Bands of Ottawa Indians were denied federal recognition by the Department of Interior. This decision has so far stopped the tribe from building a casino in the local township. Such recognition will mean an addition to the number of retail casinos in the state. But most importantly, tribal members will benefit from assistance programs in healthcare, education and housing.

In the event that Grand River Bands fails to successfully appeal, Little River Band, the operators of BetRivers Casino MI, are also looking to build a second resort location. The project at Fruitport township will further help Indian tribes by providing as many as 3000 jobs and up to $1.5 million in payments to local authorities.

Online casinos have so far been more financially productive than their retail gaming counterparts. So far since inception, Michigan online casinos have pooled over $3 billion in revenue. Despite these impressive results, many believe that online casinos could harm retail resorts, especially those that are fully owned by local tribes.

Scott Herioux, Chief Financial Officer of Hannahville Indian Community made similar assertions in a recent interview. The tribe lost its online partner, TwinSpires, last year and has only recently launched Sports Illustrated Casino and Sportsbook.

However, statistics reveal just the contrary. In 2022, the American Gaming Association reported that land-based casinos generated over 65% total gaming revenue in the country. More importantly, the report showed that retail casinos have grown at a similar upward trend as online gaming in the state. Besides, the physical thrill of a casino resort with its meals and accommodation plan will continue to keep land-based casinos in business for a long time.

Hannahville itself saw a 13.1% boost in its payments to local authorities between 2019 and 2021, the second-highest of all tribal casinos. The Saginaw Chippewa tribe also made the largest payments despite being one of the lowest tribes in terms of online casino and sports betting revenue. This clearly suggests that for tribes, retail casinos and resorts are doing well and may continue to do so.