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Michigan Tribes Wrestle With Decision To Close Casinos Amid Coronavirus Outbreak

The Governor has ordered all casinos closed in Michigan to close to slow the spread of coronavirus, but casinos owned by Michigan tribes don't have to obey because they're sovereign. Some are closing, and some aren't.
"Casino" by Dwight Menke is licensed under CC BY-NC-ND 4.0
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The Governor has ordered all casinos closed in Michigan to close to slow the spread of coronavirus, but casinos owned by Michigan tribes don't have to obey because they're sovereign. Some are closing, and some aren't.

Gov. Gretchen Whitmer announced Sunday that she’s working to shut down privately-owned casinos, following her executive order Friday that temporarily bans gatherings of 250 or more people throughout the state.

It’s all part of Michigan’s efforts to prevent the spread of coronavirus. However, Whitmer’s ban doesn’t apply to casinos owned by Native American tribes. As sovereign nations, the Michigan Gaming Control Board can’t make them do anything.

Still, some tribes have closed their casinos. Some have not. It’s a complicated decision, as many rely on casino revenue to fund their governments.

An unprecedented situation

The Sault Ste. Marie Tribe of Chippewa Indians is the largest tribe east of the Mississippi River, with 44,000 citizens. One of them, Austin Lowes, wants the Sault Tribe to consider closing its casinos in response to the coronavirus outbreak.

“Medical experts strongly recommend that 250 people or more should not congregate in the same place,” says Lowes. “The casino is that to a T. It's a place where people go, germs are spread.”

To be clear, now the CDC is recommending against gatherings of 50 or more people for the next 8 weeks.

Lowes wants quick action. He’s seen what’s happening in Italy. He knows this could be bad for older adults.

“The Sault Tribe has a lot of people in the community who are elders, who are native speakers,” he says. “To lose one of those, it would be absolutely terrible for our culture.”

However, casino revenue is critical to his tribal government. Sault Tribe Chairman Aaron Payment says casino profits make up an important gap in federal funding.

“Our service area population is funded at about 40 percent of our needs,” he says. “So we substitute the other 60 percent with revenue from our casino.”

The money goes to things like the Sault Tribe’s health department, social services, law enforcement and environmental monitoring.

“One-hundred percent of our net revenues goes for services,” says Payment. “Right now, it's all allocated.”

There could be some relief from the federal government. When President Donald Trump approved $8.3 billion for COVID-19 assistance earlier this month, $40 million of it was set aside for tribes.

Ever since, Payment has been trying to find out when and how tribes will get the money.

“We've been trying to get answers...and this was over a week ago now,” he says. “We wanna be sure that it is maximally flexible and tribes can cater funds to their needs.”

He calls this whole situation “unprecedented.” The Sault Tribe is holding a special meeting of its tribal council on Tuesday, where it will consider closing its casinos.

Limited cash reserves — no reserves

A few miles west along the Lake Superior shoreline, the Bay Mills Indian Community has closed the smaller of its two casinos.

The larger Bay Mills Resort and Casino will be closed starting Friday, March 20.

Bay Mills Indian Community Chairman Bryan Newland says his tribe doesn’t have a rainy day fund, though it’s a long-term goal of his.

"A Tribe like Bay Mills has very little margin on our cash flow, and very limited cash reserves," says Newland. "Full shutdown, while paying workers, could dry us out very quickly."

Newland says it’s hard to tell from the outside how shutting down a casino will impact a tribe. It depends on its debt, revenue, and how many citizens it's providing for.

There are 12 federally-recognized tribes in the state. Austin Lowe thinks they’re likely paying close attention to each other.

“If other tribes close their casinos, I could definitely see the Sault Tribe following suit,” he says.

Lowe also thinks no matter what, coronavirus is going to affect the tribe’s economy. He says it needs to diversify its sources of revenue.

Update 03/16/2020: The Bay Mills Indian Community, Gun Lake Tribe, and Nottawaseppi Huron Band of the Potawatomi have since announced closures of their casinos. But many of the state's 23 casinos owned by Michigan tribes still remain open. 

Interlochen Public Radio has compiled a list of coronavirus response actions taken by tribal governments in Michigan — you can find it here.

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