When I was remodeling my 160-year-old London house, the chimney was in desperate need of attention. After the bricklayer crawled up the fireplace, he found a yellowed and somewhat singed envelope addressed to Santa Claus.
Thinking it was placed there by my kids, he handed it over to me. In it was a letter penned in a childlike scrawl, written with a quill and ink, dated Christmas, 1910 asking for a Red Indian suit.
Europeans have long had a fascination with our Native Americans. So in preparation for my upcoming European strategy luncheon tour I thought I would get myself up to date about our earliest North American residents.
Business is booming on Indian reservations these days, or it isn’t, depending on where they are located. Of the country’s 565 reservations, some 239 have moved into the casino business and the cash flow has followed.
In 2010, Indian gaming reaped some $26.7 billion in revenues, or some $9,275 per indigenous native. That is a stunning 44% of America’s total casino revenues.
Some, like the Pequot tribe’s massive Foxwoods operation, just two hours from New York City, now the world’s largest casino, once had money raining down upon it. But the casino grew so large that it entirely occupied the diminutive Connecticut reservation allocated to it by an obscure 17th century treaty.
During the salad days, the profits were so enormous that an annual $250,000 stipend was paid to each officially registered tribal member. A poker boom helped. No surprise that the tribe grew from 167 to 665 members during the last 30 years. Today, the operation is burdened with $2.5 billion in debt, thanks to some bad investments and an ill-timed expansion.
Casinos in more rural locations in the far west, distant from population centers, have fared less well. Those that contracted out for professional management from Las Vegas and Atlantic City firms, like Harrah’s, MGM, and Caesars, earn a modest living.
But the reservations attempting local management on their own fall victim to inefficiencies, incompetence, corruption, nepotism, over hiring of locals, and outright theft. Believe it or not, it is possible to lose money in the casino business, and some have had to shut down.
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