A gaming slump is eating into the profits of Mohegan Sun, but the 2,000 tribal members who draw benefits from the massive casino aren't feeling the pinch -- not with money coming in from a burgeoning Mohegan Tribe gaming empire.
Under a strategy that began before the downturn hit Connecticut's Mohegan Sun, one of the world's biggest casinos, the tribe's gaming company is running casinos in Pennsylvania and Atlantic City, N.J., and pursuing more projects in states including Washington, New York, and Massachusetts.
"We have to take care of their tribe membership and the benefits they are able to get, and they are not shrinking," said Mitchell Etess, CEO of the Mohegan Tribal Gaming Authority. "If you just were to stay here, you would not have an increasing amount of revenue."
The Mohegans, who opened their flagship Mohegan Sun casino on tribal land in 1996, are among a small number of American Indian tribes -- and perhaps the most ambitious -- to put their gaming expertise to work at commercial casinos outside their reservations. For tribes that can pull it off, it's a way to diversify and protect against losses as the casino boom cuts into profits at individual properties.
Mohegan Sun once dominated the region's gaming market along with the neighboring Foxwoods Resort Casino, owned by the Mashantucket Pequot Tribal Nation, and both tribes moved to expand years ago in anticipation of the competition that now has arrived in force. Mashantucket Pequot chairman Rodney Butler said if not for the 2008 downturn that dried up funding, it would have a presence by now in markets including San Diego and Philadelphia. It is now pursuing casinos in areas including Massachusetts and the U.S. Virgin Islands.
"We knew it wouldn't last forever," Butler said of Connecticut's lock on the market. He noted Foxwoods is also building an outlet center mall. "When you look at the long-term viability as more states are expanding gaming, you're going to have to go beyond the reservation, leverage what you've built."
Nearly 240 tribes operate more than 420 gaming establishments across 28 states.
While some Western tribes have opened multiple casinos on vast reservations, very few have the experience, capital and reputation to manage or open commercial casinos, said Alan Meister, an economist with the Nathan Associates consulting firm. Tribes that do so must deal with the same tax and regulatory issues as any other private company, without the protections of sovereignty.
Others to pursue strategies similar to those of the Connecticut tribes are Florida's Seminole Indians, through their Hard Rock franchise, and Oklahoma's Chickasaw Nation, which has bought racing facilities through its Global Gaming subsidiary.
The Mohegans' expansion began in 2006 with the Mohegan Sun at Pocono Downs casino in Pennsylvania, and in 2012, the tribe's gaming company took over management of the Resorts Casino Hotel in Atlantic City. It is competing with Wynn Resorts for a license to open a casino in the Boston area. In addition, it's part of a group bidding to run a casino in Philadelphia, and it has a contract with the Cowlitz Indian Tribe in Washington state to build a casino. It's also pursuing a project in New York's Catskills and recently bid for the Miami Jai-Alai casino in Florida.
While the tribe's only Indian casino is in Connecticut, Etess said the gaming company reflects the family oriented values of its tribal owners, including a focus on employee culture.
"We have quarterly numbers and everything, but it's more about long-term vision. The tribe likes to say: 'Look 13 generations forward and 13 generations back,'" Etess said.
Despite the new riches, tribal medicine woman Melissa Tantaquidgeon Zobel said only a half-century ago tribal members had to share food to keep from going hungry. She said younger tribal members today are grateful for benefits that allow them to graduate from college without massive loans.
Although the Mashantuckets have halted payments to tribal members that once exceeded $100,000 annually, Mohegan officials say they have never emphasized large cash payments to members. In addition to what they describe as modest stipends for members, the revenue has gone toward education and health benefits, including an elder housing facility, and shoring up cultural institutions.
Tantaquidgeon Zobel said the tribe feels a responsibility to future generations.
"The generation before us had nothing and gave us this," she said.