Foxwoods, Mohegan Sun, Harrah’s: these are a few key players in the gaming industry. And many who frequent the craps tables or drive past their billboards know that these casinos (and many others throughout the country) are owned by Native American tribes. Although regulated by the Indian Gaming Regulatory Act, Native American gaming has recently been on the rise, largely due to the government’s limited ability to prohibit gambling on Indian reservations and other lands of tribal sovereignty. In fact, according to a recent analysis by Bank of America Merrill Lynch, Native American gaming represents 43 percent of U.S. gaming industry revenue – with Las Vegas representing only 10 percent and regional commercial gaming the remaining 47 percent. Two hundred thirty-six Native American tribes operate four hundred twenty-two facilities across around twenty states. How does the Native American gaming industry continue to grow in the midst of the down economy while some Las Vegas resorts and casinos have shuttered their doors?

The Way I See It

  •  I see casinos working with agencies to direct creative, which needs to differentiate the casino from any other gambling institution and drive visitors to take their gambling dollars there. To many people, all casinos are the same, so the real challenge is brand development and recognition.
  •  Many Native American gaming institutions are in key localities and thus focus largely on target marketing and securing local attention – and driving tourism. Say you’re driving down the highway through Chicago toward Northwest Indiana, you’ll see billboards advertising casinos to encourage you to get off at certain exits, or if you’re somewhere regionally close, you may see commercials during local programming advertising casinos. For casinos, understanding the local target market is key.
  • The Native American gaming industry has grown into a $27 billion business from almost nothing twenty years ago, alongside the rise of online gaming and Internet gambling, which have only increased the competition. I see casinos using new marketing and advertising tools to reach new target audiences in order to build brand reputation and attract future visitors.
  • I see many Native American casinos taking advantage of social media to grow brand identity and draw new visitors with tactics such as sweepstakes on Twitter and photos of recent parties at various casino locations on Facebook.

The Way The Industry Sees It

I sat down with Jim Diamond, an expert in Indian Law, to discuss the recent rise of Native American gaming and casinos.

 

Being an expert in Indian Law, could you explain the history of Native American sponsored gaming and its regulation?

Many people aren’t aware that games of chance are a part of Native American – Indian – culture and are not a recent invention.  Even before the arrival of the Europeans, American Indians played individual games like dice, or team sports, for example, and wagering was a common element of the activities.  Large scale commercial gaming sponsored by American Indian tribes proliferated in the 1980’s when Reagan-era budget cuts forced tribes to find alternative sources of operating funds. States then ventured into expanded reliance on lotteries.  The result was that a number of tribes like those in Florida and California expanded gaming, first by expanding bingo games.  This met with opposition by the states, who said the expanded gaming ran afoul of state anti-gambling laws.  The tribes sued in federal court and a federal regulatory scheme, Indian Gaming Regulatory Act (IGRA), with permissive Indian tribal gaming was the result.  IGRA forced states to enter into agreements – compacts – with Indian tribes, but under a framework established under federal law.

By remaining on the outskirts of the federal government’s regular gambling jurisdiction, how do you think Native American casinos have impacted gamblers across the nation?

First, states that permit Indian gaming have come to heavily rely on the whopping $1.4 billion tribal gaming contributes to state tax revenues.  Most significantly, Ron, I think the American experience with Indian gaming has led to a change in popular opinion that the social harms feared to result from expanded gambling have been largely unrealized. So, with the reduced fear of gambling addiction or organized crime and the dependence on the tax revenue, gaming is now everywhere.  The popularity of Indian gaming has led states to vastly expand non-Indian casino and other gaming. Around twenty states now have commercial casinos.  The popularity of Indian gaming has also led states to be more open to expand other forms of permissive non-Indian gambling like the popular riverboat gambling, racetracks, and off-track betting.  Charities and religious groups have also benefitted from the permissive atmosphere with expanded “Las Vegas nights” and bingo.  So the overall resulting expansion of legal gambling has meant consumers don’t have to travel as far to gamble.

How has gaming influenced the Native American community as a whole?

The problems facing the Native American population and the impact casinos and gaming have had on the American Indian community cannot be emphasized enough.  Nearly a third of American Indians live in poverty, with an even higher proportion for those living on Indian reservations.  American Indians are true survivors and casinos and gaming enterprises have brought many tribes their first prospect for economic self-determination in over two hundred years.  Gaming revenues have been instrumental in funding Indian tribal government operations, programs, and infrastructure.  Gaming has led to economic development and jobs for gaming tribes. Tribes have begun to invest in non-gaming businesses like the Seminole Indian tribe of Florida, who recently acquired one hundred twenty-four Hard Rock café restaurants, hotels, and casinos.  Gaming money has been used to provide health care and educational facilities for tribal members, funding the building of schools like the College of the Menominee Nation in Wisconsin.  It has been used to foster cultural preservation and revitalized native languages. Some tribes have used gaming money to fund charitable giving, like the Puyallup Tribe of Washington who donated $5.2 million to charity in 2010.  Even with the great economic benefits American Indians have realized as a result of casino gambling, not all Indian tribes have ventured into casino gambling and not all of the tribes that are into gaming have achieved economic success. Unemployment among adult Indians is still about fifteen percent, double the national average.  Native Americans, sadly, still remain America’s poorest people.

By remaining a sovereign nation, how do you think Native American nations have affected other gambling advertisers, or even the marketing world at large?

Well, Indian tribes really differ from one to the next and tribes have a long history of being about the land, so it’s fitting that casinos embody the places where they flourish.  Indian tribal casino marketing tends to emphasize the localness of the place-based experience. Each casino is one of a kind, even if they share the type of games inside.  The ambiance is a reflection of how tribal elders envision the tourist and non-Indian neighbor enjoying the gaming experience. Foxwoods in Ledyard, Connecticut, for example is quite unlike the Agua Caliente Casino in Rancho Mirage, California.  I think this focus on local place and the uniqueness of the experience has had a broad impact on marketing and advertising for other forms of entertainment and tourism as well.

What is the coolest object in your office right now?

My office is in Stamford, Connecticut and I obtained a historic photo, which I’ve had enlarged and framed.  It’s a picture of Homer S. Cummings delivering a speech in 1934 at Stamford High School, a school that still exists.  Cummings was a Stamford lawyer, former Connecticut prosecutor (as I was), and turn-of-the century mayor who had been appointed by Roosevelt to be Attorney General of the United States.  In the photo he has returned to Stamford High to give a campaign speech for Roosevelt and the Democratic ticket.  You can see a photo of Roosevelt hanging from the rafters and the men listening to the speech are studded out in ’30’s attire, including two tone swing-era spectator shoes. It’s a hoot.