The Pokagon Band of Potawatomi Indians’ Four Winds Casino Resort will open in January in South Bend, Indiana. The 175,000 square foot facility–the state’s first Native American casino–will offer 1,800 slot machines, restaurants, three bars, a coffee shop and retail outlets and provide 1,200 jobs. The rotunda will display the tribe’s native basketry and a continual fire will represent the Potawatomi’s ceremonial flames. Indiana Gaming
The new casino will drive economic development for the Pokagon tribe’s 5,000 members who live throughout southern Michigan and northern Indiana. The tribe also owns Four Winds casinos in New Buffalo, Hartford and Dowagiac, Michigan. Tribal Chairman John Warren said because of casino revenue, many members have been able to return to their ancestral homeland after the U.S. government pushed them west in the 1830s, and it also has allowed the tribe to provide health care and other services. “It’s because of the Pokagon band’s tribal council and also advice and the wants and needs of our tribal citizens that we engaged in gaming. And it’s just a success story from there. Most of the infrastructure and most of the services that were built in the last 10 years is because of Four Winds.”
The Pokagon tribe has an agreement with South Bend to provide the city with $400,000 for water and sewer services, a maximum of $5 million toward community development over the next five years and 2 percent of the casino’s net win, or a minimum of $2 million, toward the city’s budget. South Bend Mayor Pete Buttigieg said, “The tribe was in their rights to go forward with gaming with or without us. Our stance has always been that we are supportive, provided that this can be set up in a way that this is a net win for the community.”
Currently the tribe does not have a gaming compact with the state so it will not immediately offer live table games. As a result, the state will lose out on taxes that would go toward its general fund, economic development, State Fair Commission and Division of Mental Health. A spokesman for Governor Eric Holcomb said it would be “premature” to say whether he would sign a compact with the Pokagon to allow for table games or how much revenue he would expect in return. In Michigan, the Pokagon paid $19.4 million and local governments $6.1 million in 2016. Since 2007 the tribe has shared $51.4 million with local governments, according to a September 2016 report.
Each of Indiana’s 11 casinos contributed an average of $43 million to state and local taxes in fiscal year 2017. In the past seven years, casino tax revenue to the state general fund has declined by $237.4 million, or 35 percent.
Indiana lawmakers have been opposed to any sort of gaming compact with tribes. Many lawmakers want to protect the interests of casinos in their own districts. Others do not want to expand gambling beyond its current level. In 2015 Indiana lawmakers passed a measure requiring that the legislature have final approval of any gambling compacts between tribes and the state.
However, Four Winds Chief Operating Officer Frank Freedman said a compact is not considered vital to success, since offering live table games would not make much of a difference. “In our industry, slots are overwhelmingly the larger percentage of our business. Overwhelmingly. So when you really start to sit down and look at the financial planning data, it was really easy for us to conclude that this is going to be a home run.”
Meanwhile, Indiana state officials and other casino operators are bracing for the impact of Four Winds South Bend. The tribe’s Four Winds Casino Resort in New Buffalo, Michigan, opened in 2007 just four miles from the Indiana border, immediately took away business from the nearby Blue Chip Casino Hotel Spa in Michigan City, Indiana. That operation laid off 165 employees and lost $58 million in revenue in one year.
Four Winds South Bend is likely to drain more business from Blue Chip and cause Indiana to lose millions in casino tax revenue since tribal casinos do not pay taxes. Insight Editor Ed Feigenbaum said, “Nobody in Indiana has dealt with this before. It’s going to be a game changer, and it’s going to be particularly bad news for Blue Chip in Michigan City,” located 40 minutes from Four Winds South Bend.
Keith Smith, president and chief executive officer of Blue Chip owner Boyd Gaming, said in a quarterly call with shareholders, “We’ll be prepared to fight it out and see what happens. We don’t have any predictions, but we’re certainly aware of it, certainly paying attention to it and certainly preparing for it.” Michigan City Mayor Ron Meer said, “It’s important to make sure that Blue Chip does thrive because their success does reflect on our community.” In 2017, Michigan City brought in $10.8 million in casino taxes.
Observers believe Four Winds South Bend could pave the way for more tribal casinos in Indiana, which could emulate Michigan with three commercial casinos and 23 Native American casinos owned by 11 tribes.
Casino Association of Indiana President Matt Bell said, “We don’t believe this will be a one-time event. We think that this is the beginning.” He added, “When you think about Indiana gaming, when it was introduced 22 years ago, we were a monopoly in the Midwest. The competitive environment has changed dramatically.”
