Post-Covid recovery for tribal operators

| By Marese O'Hagan
Tribal gaming facilities suffered from the global shut-down caused by last year’s novel coronavirus (Covid-19) pandemic. However, many stakeholders are confident that there is a route to recovery.

The hardships tribes faced and the path to recovery were discussed by a host of industry professionals involved in tribal gaming during an ICE 365 Digital Speakeasy on 19 April.

The quotes below are a selection from the digital speakeasy held on 19 April as part of the ICE 365 Tribal Gaming content series, sponsored by Kambi.

Sense of community

It’s clear that one of the most impactful consequences of tribal gaming is its effect on communities.

The sector, as a source of funding to Native American communities, is more than just a business according to the group.

“It’s much more rewarding,” one participant said. “It has a deeper effect in the long term, so it has a purpose as opposed to just gaming entertainment.

“When that quarter goes in the machine, that’s going to go somewhere and do some good and help the tribes in their government, social services.”

Speakeasy participants also talked of tribal gaming’s impact for them on a personal level, with one describing the sector as “transformational”.

“I can talk about what it’s done for me and my family- my mom, my sisters, aunts, uncles and cousins,” they said. “[…] It’s really pulled them out of abject poverty.”

This sense of community made the reality of the pandemic even more challenging. But tribal members’ stakes, both financial and personal, in their gaming operations and local areas could be a key part of the tribes’ return to normality, speakers explained.

Active recovery and loyalty

With masks and social distancing measures seemingly here to stay, there are worries that it may impact customers’ casino experience.

One participant was particularly vehement about the need to find ways to connect and engage customers in the era of social distancing, to offer an experience as close to what they could expect pre-pandemic.

“I think in tribes when you’ve got a mask on, when you’ve got a partition between you, you have to make a connection in some way to keep that loyalty going. You want those referrals and those recommendations”

“You want people to go away saying, ‘I really still felt that strong sense of community’, so I think it almost becomes even more important.”

Safety protocols have added benefits when it comes to customer comfort. One participant noted that across hospitality industries, customers will spend if they feel the environment is safe.

A combination of being forced to stay home, and an unconscious wish to reward institutions for their rigorous protocols, means that Covid-safe measures have the potential to bring in more revenue, they said.

Nonetheless, the potential issues with in-person gambling experiences became a moot point with participants. Another participant said their tribe used loyalty to encourage gambling at their casinos, even before the pandemic: “When you’re driving to Las Vegas, to California there are billboards all the way saying, ‘Why are you going to Vegas? Turn around, you just passed another casino!’”

Driving the focus towards high-yielding players and groups is a key way to bring in much-needed revenue. One participant described it as the “number one priority” when casinos opened again.

There have already been positive signs of recovery among tribal gaming operators. With casinos now open (though with capacity limits) in most states, revenue is ticking upwards. A tribe member pointed towards the public’s wish to socialise after a year restricted to their homes.

“The numbers for our casino – they’re going through the roof,” they said. “You know all that frustration that we’ve been hearing about, that all that people wanted to do was out and spend the money?

“It’s very real, especially here in southern California. So hopefully we’ll catch up with the rest of the world.”

But the transition is happening at a slower pace for others in Indian Country.

“We saw great reduction in the collection of [customer feedback], because it was just not something that they [tribes] could afford,” revealed one speaker, who works in data collection. “And let’s face it, everybody closed for a long length of time.”

“Some of our tribes didn’t even put the services back in place. Some are still just transitioning.”

Ongoing key issues and the inevitable Covid tie-in

The conversation then shifted to the new industry challenges faced by tribal casinos. One key consideration is the ongoing sports betting boom.

“It’s hard to ignore the tidal wave of sports betting that’s rushing across the country,” one speaker pointed out.

Whether sports betting occurs is one part of the conversation, but where it occurs is what could sway tribal casinos towards success or failure in the post-Covid times.

“My concern is, a lot of these sports betting companies are not really interested in the sports – it’s more about the online casino,” the same participant added. “Look at New Jersey; you look at the numbers and it’s very obvious where the real money is.”

While online casino may be the more profitable vertical, the Speakeasy revealed significant concerns about its potential proliferation, and the impact on tribal properties.

Return on investments and plans for the future

Some tribal operators have looked to ensure gaming expansion benefits their communities by going beyond partnerships or market access deals, to invest in developing their own products and services.

But the speakers agreed that this was not a case of throwing money around. Tribes had to be smart where they put their money to ensure a return on investment.

But with many casinos not yet at full capacity, there may be a longer road ahead.

“I think we’re all in the same boat. We’re all just hoping that the world comes back to normal by the end of the summer,” mused one participant. “But the tribes, like the rest of Las Vegas, are starting to bring in more amenities back online.”

Other forms of casino amenities, such as concerts and conferences, are still being trialed to ensure they are Covid-safe. This means there is still significant uncertainty ahead. However there was broad confidence in the sector’s prospects.

“The fundamentals of the casinos are still very solid,” a participant pointed out. Furthermore, H2 Gambling Capital is projecting that more than half of US casino revenue will come from tribal properties through to 2025.

And the Speakeasy concluded by agreeing that it was less a case of if tribal casinos could recover, and more a case of when this would happen.

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