The COVID-19 crisis has wreaked havoc on the Indian Gaming industry as tribal nations have had to close 100% of their gaming facilities across the United States out of concerns for public health, safety, and welfare in the face of this global pandemic. Tribal governments are voluntarily implementing these closures in coordination with state governors and through tribal government emergency declarations. This effectively constitutes a shutting down of the 12th largest employer in the country.
Prior to the COVID-19 crisis, Indian Gaming constituted a $39.1 billion industry with approximately 250 tribal governments across 29 states operating 520 gaming facilities—with the majority of these operations serving as primary employers and economic engines in rural communities nationwide.
The various iterations of the CARES Act provide billions in new funding for medical research and public health programs to combat the spread of the virus, relief in the form of paid sick, family and medical leave, and free coronavirus testing.
The new law includes $10 billion of support for Indian Country in emergency appropriations, as well as grants, loans, and loan guarantees, for which Indian tribes and tribally owned entities are eligible. In some instances, funds will be available to assist tribes struggling with the ramifications from having to close their gaming facilities. In other instances, agencies implementing certain provisions of the CARES Act have interpreted the Act in a manner that excludes relief for the costs Indian Gaming has endured during this crisis, or for the lost revenue tribal nations have taken on.
Without a tax base to generate governmental revenue, Indian tribal governments must rely on their tribal government-owned enterprises, and in particular Indian Gaming, to generate revenue to fund essential government services to Native communities across Indian Country in the form of health care, education, public safety, housing and social services. In fact, federal law mandates that Indian Gaming revenues be used for government purposes.
Because Indian Gaming, through the auspices of IGRA, effectively subsidizes the federal trust responsibility to support tribal self-determination and tribal economic development, the federal government has a trust duty and obligation to address resulting loss of gaming revenue in Indian Country as a result of COVID-19.
The CARES Act is a good start, but much work remains to be done to ensure the continued stability of our tribal nations. Of course, the implementation of the CARES Act continues to be shaped daily, not only by the enactment of legislation by Congress, but also by the federal agencies who interpret the laws Congress enacts. The below, therefore, will inevitably be updated as developments continue.
This is a fluid and rapidly changing situation and these resources are current only as of the date of publication. We recommend that you contact your local Quarles & Brady attorney regarding the most up-to-date information or with any other questions regarding this subject matter, or contact Jonodev O. Chaudhuri: (202) 780-2635 / [email protected].