The State of Indian Economic Development

Article Index

The Winnebago Tribe of Nebraska, for instance, opened its WinnaVegas Casino on tribal land near the town of Sloan, Iowa, in the spring of 1992. It was an immediate success, providing jobs for more than 100 Winnebagos and generating huge profits for the tribe in its first year of operation.

The Winnebago used the profits for improvements on their reservation – building a senior center and a 12-unit apartment building, funding educational reforms, a daycare center, a podiatry service credited with preventing many diabetes-related amputations, a Winnebago language and cultural program and a tribal college.

High school test scores also rose in the Native student population and unemployment rates fell below the national average.

Then, in 1994, the state of Iowa authorized the expansion of gaming in the tribe’s primary markets.

Tribal leaders quickly realized that their remote gaming operation would be severely affected by new state casinos and voted to expand the tribe’s business operations. Ultimately, the Winnebago Tribe formed Ho-Chunk, Inc. to diversify the tribe’s investments away from gaming.

“Our goal was to develop an entrepreneurial company that was able to recognize and develop various economic opportunities and was capable of making quick business decisions to capitalize on those opportunities,” according to a history section on the Winnebago Web site.

The tribe initially financed Ho-Chunk with income from gaming operations. After a few years, it became a stand-alone operation and went on to start multiple reservation-based companies. Today, Ho-Chunk employs more than 500 people in four major areas of operation, including construction, housing, government contracting, marketing/media and retail/distribution.

It’s just the brand of Indian economic development that pleases Cornish. “Diversification in economic is extremely important,” he reflects, having spent years working with tribes and individuals on developing business plans. “Trying to insulate tribes’ from economic instabilities is crucial.”

Beyond Gaming

While the Ho-Chunk story is dazzling on many fronts, there is no one sure-fire way to achieve successful tribal economic development.

“I don’t think there really is a one-size fits all type of model,” says Begay. “Given the diversity of Indian nations – culturally, socially, politically – the routes to successes are going to be different and should be different.”

The Mille Lacs Band of Ojibwe provides just one of many examples of unique business ventures in Indian Country. In 1996 tribal leaders dedicated a portion of the tribe’s gaming revenue to a small business development program. The program invests in businesses that are at least 60 percent member-owned and within 50 miles of the reservation. As of 2000, 60 percent of the 30 businesses that had received assistance were still in operation.

Likewise, the Mississippi Band of Choctaw offers another example of a tribe focused on developing and sustaining unique tribal enterprises. The tribe has managed through the years to create several thriving manufacturing businesses focused on diverse ventures, ranging from automobile development to greeting card production. The tribe has even now opened a couple of factories in Mexico under the North American Free Trade Agreement.

Today, every Mississippi Choctaw citizen who wants to and can work has a job, rising incomes and standards of living, according to tribal officials.

As the concept of self-determination has taken root across Indian Country, some tribes have created and supported vast tribal enterprises that have nothing to do with casinos, such as the Quil Ceda shopping center of the Tulalip Tribes, or the high-volume FireLake Discount Foods Center and First National Bank and Trust of the Citizen Potawatomi.

“Non-gaming enterprises are proliferating rapidly in Indian Country,” according to Kalt’s research. “Some of these are large and visible – but development is also founded on businesses owned by private tribal citizens – from Burger King franchises and Hampton Inns to paving companies, construction firms, automobile repair shops, and cattle ranches.”

Historically, the governmental sector (tribal and federal) has been the largest employer of most tribes, but today the business sector is growing increasingly large. In 1982, roughly 13,000 small businesses generated $500 million in on-reservation revenues, according to Kalt. Ten years later, the U.S. Department of Commerce identified 102,000 Native owned businesses. By 2002, the figure had more than doubled, to 206,000.

Even at one of the poorest tribes in the nation – the Pine Ridge Indian Reservation – a number of Native-owned businesses have popped up and are now doing well, even without much direct support from the Oglala Sioux tribal government. In this case, a local Indian chamber of commerce is collaborating to foster intra-chamber purchasing and pushing to develop better tribal economic polices.

Cornish believes that all tribes should be looking to make economic developments beyond gaming. “Tribal casinos usually have to share a large percentage of their revenues with states or communities,” he notes. “Plus, there’s a very active program to expand gaming beyond Indian Country.”

Culture’s Role

Upon learning the profits of the few tribes that have enjoyed considerable economic success in the gaming arena, some people, unfamiliar with tribal sovereignty, self-determination and other cultural and political issues involving American Indians, might wonder why all tribes haven’t jumped collectively onto the casino bandwagon.

Beyond the obvious problems that would arise from market competition and saturation, tribal officials interviewed throughout the country say that an immense complicating factor is the unique political and social status of American Indians as a racial group in the U.S.

Tribes not only have inherent rights under the U.S. Constitution, treaties, Supreme Court decisions, Presidential executive orders, and acts of Congress, their members also often have another set of decisions to consider based on their unique cultural beliefs and customs.