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Economic Diversification Will be Key for Long Term Tribal Success

17 August 2005

The recent explosion of Indian gaming in this country has helped many communities lift themselves out of poverty, with prospects for a bright future. However, with the increasing number of casinos, racinos, and the growth of Internet gambling all competing for the gaming dollar, tribes now need to focus on investment and growth of other business opportunities to ensure their long-term success.

Addressing this need, last week the National Indian Gaming Association ("NIGC") announced that it has signed a Memo of Understanding with two prominent Native organizations, the American Indian Chamber of Commerce and the Council of Tribal Employment Rights, to help promote business and economic development in Indian communities across the country.

The memoranda establish a framework for cooperation between the organizations to increase the availability of contractual and procurement opportunities for American Indian-owned businesses both within and outside of the Indian gaming industry.

"American Indian Businesses need thriving relationships with individuals, organizations and companies in order to prosper," said NIGA Chairman Ernest L. Stevens Jr. "Businesses need to be enthusiastic to buy from, work for, supply to and invest in our economies. The more successful Indian-owned businesses we have out there, the more we are able to create opportunities for our people."

Stevens said that small business development is critical in building sustainable tribal economies, and communities are slowly starting to see growth. The latest statistics from the U.S. Census Bureau reported that there were 206,125 American Indian and Alaska Native-owned businesses in 2002. The Census Bureau also reports that 25 percent of American Indian and Alaska Native business owners reported working 60 hours or more per week, higher than the average of all business owners.

"It is evidence that Indian people are out there working harder than ever to provide for our communities and for the betterment of our people," said Stevens. "And through these strategic partnerships, we hope to stimulate economic success and self sufficiency in every Indian community from coast-to-coast by helping foster and promote Native-owned business."

Many tribes have looked to diversify their economies by first focusing on the needs of their own tribal members. Tribal owned, long term care facilities, power plants, gas stations, and convenience stores have seemingly been the initial focus of many tribes. Others have focused on real estate acquisition, such as the Grand Traverse Band's acquisition of the Grand Traverse Resort in Michigan. Numerous other tribes have purchased or built hotel properties to service their nearby casinos.

A major hurdle that tribes face as they seek to diversity and do business with non-tribal entities is the reasonable fear that many business people have sovereign immunity. To overcome this fear, tribes need to reach out and educate the business community, and to work to assure fair dealings in all their transactions. Through proper legal structuring, protections can be created for non-tribal businesses doing business with the tribes to assure a remedy in case of a disagreement.

To diversify operations, the tribes need to reach out to the business communities. Many Michigan tribes have been model examples of how to be successful at this. The key to continued success is outreach and education to the business community. The NIGC's recent announcement is one step in the right direction that hopefully will lead to greater success in the future.

David Waddell
David Waddell is an attorney for Regulatory Management Counselors, P.C. (RMC), which assists businesses in navigating the legislative, regulatory and licensing systems governing Michigan’s commercial and tribal casino industries. He is the co-author of The State of Michigan Gaming Law Legal Resource Book and one of the founders of The Michigan Gaming Newsletter.

David Waddell Websites:

www.michigangaming.com
David Waddell
David Waddell is an attorney for Regulatory Management Counselors, P.C. (RMC), which assists businesses in navigating the legislative, regulatory and licensing systems governing Michigan’s commercial and tribal casino industries. He is the co-author of The State of Michigan Gaming Law Legal Resource Book and one of the founders of The Michigan Gaming Newsletter.

David Waddell Websites:

www.michigangaming.com