The Pokagon Band of Potawatomi Indians announced the start of construction of its Four Winds South Bend Casino in South Bend, Indiana. Last month the Bureau of Indian Affairs approved the 5,200-member tribe’s application to take into trust 166 acres of Pokagon land in a historic decision that restores the tribe’s ancestral homeland—the first restoration of sovereign tribal land in Indiana. Tribal officials said the 0 million Tribal Homeland Restoration project also will include housing, a community center and health services facilities.
The Four Winds South Bend Casino will open in early 2018 and provide 700 temporary construction jobs. It will offer 55,000 square feet of gaming with 1,200 Class II machines, plus new restaurants, a player’s lounge, coffee shop, two bars and a retail outlet.
At a press conference, National Indian Gaming Association Chairman Ernie Stevens, Jr. said, “I am honored to be here with you today as you announce the construction of the first tribal casino in Indiana, and I congratulate the Pokagon Band on this historic 166-acre Tribal Homeland Restoration. The construction of the Four Winds South Bend Casino is another great testament to Indian gaming and all that it brings to our tribal communities. Tribal government gaming is more than operating casinos, it is the mechanism that provides additional revenues to help address tribal governmental services and employment and economic opportunities beyond gaming.”
Stevens added, “While our distant past has its share of challenges, today we walk together moving our economy forward, creating jobs and working together for the betterment of communities. From our $100,000 million dollars in charitable contributions to creating over 300,000 direct jobs and some 650,000 indirect American jobs nationwide, Indian country is doing our part to the success of the economy. Because of the continued development of gaming properties throughout the tribal gaming industry, Indian gaming continues to see revenue growth.”
In July, the NIGC reported nearly $30 billion in Indian gaming revenues in 2015, the largest increase in revenue in Indian gaming in more than 10 years. “This is because of the hard working, dedicated individuals throughout the Indian gaming industry. I am confident that we will once again see positive growth in 2016, as we see indicators to that trend once again,” Stevens said.
The Pokagon tribe operates three Four Wines casinos in New Buffalo, Dowagiac and Hartford, Michigan. Ed Feigenbaum, editor of the Indiana Gaming Insight newsletter, said the South Bend casino will be “a big game-changer.” It won’t be able to offer Vegas-style Class III games until the tribe negotiates a compact with the state. “To the unsophisticated consumer, it doesn’t really vary that much,” Feigenbaum said.
Pokagon Chairman John Warren said last year the Indiana legislature approved a bill that prevented Governor Mike Pence from negotiating a compact with the tribe. Warren said he’ll wait to hear from Governor-elect Eric Holcomb. “We’re always open to have a conversation if anybody wants to have one with us,” he said. Or, Warren said, the tribe could decide not to offer Class III games. “Until we get some history behind us and see how things are going, we may go into a different direction,” he said.
Regarding revenue sharing, South Bend Mayor Pete Buttigieg said the city will receive 2 percent of the casino’s annual net win. If the casino has 850-1,699 games, the annual payments will not be less than $1 million; if it has 1,700 or more games, annual payments will not be less than $2 million. The tribe also will give $5 million to local organizations over five years.
In Indiana, privately owned casinos pay about 30 cents on each dollar of revenue in taxes to the state. But the Pokagon Band, as a sovereign nation, would not be subject to those same taxes and regulations, thereby gaining a competitive advantage. The state’s 13 casinos have been on a 7-year decline, according to the Indiana Gaming Commission. They paid $605 million in wagering and admission taxes on a total win of $2.2 billion in fiscal 2016. In fiscal 2009 they paid $876 million in taxes on a total win of $2.8 billion.
Casino Association of Indiana President and Chief Executive Officer said the group is working on an economic impact study regarding the Pokagon casino. “We think you’re going to see an impact to the properties across the northern tier of Indiana, from East Chicago and Hammond to Gary. Obviously, Michigan City will probably be most impacted,” since the Blue Chip Casino there is the closest casino to South Bend, he said. Central Indiana racinos also will be affected.
Feigenbaum pointed out, “They’re losing one-third of every dollar they earn at Blue Chip to taxes and their local development agreement. The only taxes the Pokagon casino would pay, if you even want to call them taxes, would be what they negotiate with the state. The ability to offer tax-free meals, tax-free gasoline, tax-free cigarettes offers them a significant marketing advantage. They’ll have more to invest in their property, to market their property. They can offer more promotions and give away more for free.”
