For years, Knute Knudson, Jr. has proudly displayed an Oglala Sioux flag in his office. It was given him in the 1990s by Kevin Killer, then a “skinny kid” by Knudson’s description, but today, president of the Oglala Sioux Tribe.
Knudson, who is vice president of global business development and tribal ambassador for International Game Technology, is as proud of that flag and what it represents as he is of his own induction two weeks ago into the American Gaming Association’s Gaming Hall of Fame.
Of this latter honor, Knudson says he was taken by complete surprise. “The other folks who were being honored were billionaires who ran large companies as the point person, and I’ve always been off of those radar screens for what I’ve done.”
In this, of course, Knudson is wrong. What Killer’s flag represents is recognition for the same reason the AGA named him to the Hall—a career dedicated to the advancement of sovereign Indian nations through tribal gaming.
In fact, one could argue tribal gaming would not even exist today had it not been for Knudson. He and his former company Sodak Gaming (acquired by IGT in 1999) did more to aid in the survival of Indian gaming than any business entity, politician, or even the tribes themselves.
For Knudson, attention to the plight of Native Americans began at an early age in his native Rapid City, South Dakota. “My paper route included many tribal folks, and I would deliver a paper every day to a man named Emerson Quickbear,” he recalls. “Emerson was in an area they referred to in Rapid City, in a pejorative way, as ‘Indian Town.’ He was a wonderful man. There were dirt floors in his house and he heated it with firewood. That was when I first became aware of tribal issues.”
But Knudson’s path to his life’s work really began when, after six years as a South Dakota state legislator representing the Black Hills district, he was tapped by the George H.W. Bush administration in 1989 to join the Department of the Interior, where he became deputy chief of staff to Secretary Manuel Lujan, Jr.
A Defining Moment
Knudson joined Interior only months after enactment of the Indian Gaming Regulatory Act (IGRA), and the agency was knee-deep in setting up the regulations to enable tribes to operate gambling. But he had first become aware of the pending Indian gaming business two years earlier when, as a state representative, then-Governor George Mickelson entered a legislative conference waving the U.S. Supreme Court decision in California v. Cabazon Band of Mission Indians, which opened the door for tribes to operate gambling on reservation land.
“The governor slammed the papers down, looked at us, and said, ‘There are going to be tribal casinos all over this country,’” Knudson recalls. “We all looked at each other in amazement.”
When he became chief of staff at Interior, the prediction became reality.
“Sitting on the secretary’s desk was the Indian Gaming Regulatory Act, and it was our responsibility to begin to execute and administer the act,” Knudson says. “There was no commission yet. There were piles of information stacking up seeking recognition and land-in-trust. Compacts were being considered.”
After four years at Interior, Knudson was tapped by Sodak Gaming to join the Rapid City-based supplier as vice president. Sodak was the exclusive distributor for IGT games in Native American markets.
Growing Tribal Gaming
It was at Sodak that Knudson started his journey to becoming the go-to expert in the U.S. on Indian gaming. First, he was called on to testify before a U.S. Senate committee chaired by Senator Daniel Inouye looking into Indian gaming.
“At that stage of the game, there were still a lot of bills being introduced to reverse the Indian Gaming Regulatory Act, and to prohibit Indian gaming on reservation land,” Knudson recalls. “There was still an amazing amount of hostility out of Nevada to tribal gaming, and various markets were opening.” Knudson was one of a parade of witnesses at the hearing, which was examining potential amendments to IGRA.
After giving the “inside-the-Beltway” view of Indian gaming at the hearing, Knudson began work at Sodak which ultimately would allow the Indian gaming sector to survive and grow. “We sat down and asked what we could do to assist tribes in getting started—regulatory issues, how to form a gaming commission, how a slot machine works, what steps you need for internal controls,” he recalls.
Around this time, Knudson authored the book Getting Started in Indian Gaming, which became a blueprint for the first decade of tribal gaming startups. “We distributed them all over,” he says. In addition to tribal councils, Sodak mailed the book to the Department of the Interior and to early heads of the National Indian Gaming Commission.
Backing the Industry
But what the tribes soon learned was that Knudson and Sodak had their backs in the nascent Indian gaming industry. IGT was the dominant supplier in those days, providing anywhere from 60 percent to 100 percent of the games on a given tribal casino floor. “We had the support of the dominant and financially stable IGT to continue to produce this product and evolve other products,” Knudson says. “This was enormously helpful to tribal governments.”
More importantly, tribes in that era had nothing like the finances they enjoy in the tribal gaming area. Sodak actually set up a financing function to help tribes open casinos. “We financed somewhere on the neighborhood, conservatively, of $1.5 billion worth of slot machines, when they cost an average of between $2,500 and $3,500 apiece,” says Knudson.
“Tribal casinos at that stage could not find financing from banks, from savings and loan institutions or from private equity. So, we financed those machines. We also, in those early days, did some financing for buildings, a lot of the FF&E equipment, and other things needed to outfit the casino, from uniforms to dice to the carpet.
“Because of the strength of our balance sheet, we would essentially take paper from the tribes at a fixed rate for a fixed time. Our rate was right at prime, and our fixed time was generally three years. In other words, we weren’t abusing those credit relationships with tribes, and they paid us back over time.”
Sodak would also use cash on hand to stock a warehouse of IGT machines in South Dakota. “We bought them from IGT knowing that other tribes would want them,” says Knudson, who adds that Sodak executives made sure they could meet short deadlines for delivery. “I was on the end of a pushcart myself many times, loading machines into semis in Rapid City, and unloading them in some instances. Our VP of sales was doing the same thing.”
In addition to individual tribal casinos, Knudson and Sodak had a big part in enabling the survival and growth of the National Indian Gaming Association. In the early 1990s, then-NIGA Chairman Rick Hill called Knudson to his Minneapolis office and showed him the organization’s finances. “They had shoebox of their debts, and they had a checkbook that showed all zeros,” he recalls. “They were out of money. So, we wrote them a check right there, I think for $50,000, out of Sodak funds.
“Then, over a period of three years, we gave NIGA $1 million so that they could fund the defense and advocacy and advancement of tribal gaming at a time when there was huge controversy surrounding Indian gaming; there was a lot of hostility and a lot of bills being introduced to prohibit it.”
As we all know, the association survived and grew. NIGA gave Knudson its Associate Member Lifetime Achievement Award in 2018 (photo: Knudson with NIGA Chairman Ernie Stevens, Jr., Jodi DiLascio, director of the Tribal Gaming Division at BMM and Russell Witt, director of Class II Operations and Business Development for Ainsworth).
Education and Advocacy
In addition to efforts promoting the very survival of Indian gaming, Knudson became the go-to source for information about tribal gaming to stakeholders, government officials, media and the tribes themselves.
“We helped by educating state gaming commissions, and educating tribes who were in (compact) negotiations with the states,” Knudson says. “We were never at the table with the sovereigns, but whatever help they wanted, we were willing to provide it.”
After IGT acquired Sodak in 1999, Knudson’s role remained essentially the same. For four years, Sodak operated independently within the IGT organization, remaining in South Dakota. Knudson moved to the company’s Reno headquarters in 2004, where he remains the authority on Indian gaming and point man with the tribes, adding the “tribal ambassador” designation to his title.
“In terms of new compacts or compact issues, or in terms of land-in-trust or of recognition, or in terms of sales problems with any of our deals in Indian Country, (IGT) gave me carte blanche to deal with them, (and provided) whatever resources I needed to be involved in the meetings, to represent the private point of view,” Knudson says.
Nowhere did offering the private point of view end up being more important than during the time Phil Hogen was chairman of the NIGC. In the early 2000s, Hogen sought to impose technical standards for Class II gaming machines that many felt threatened to torpedo the entire industry. Knudson was part of the ad hoc group formed to advise the commission on proposed new internal control standards meant to draw a “bright line” between Class II games and Class III casino slots.
“The initial regulations on Class II that (Hogen) approved would have required a 12-second interval for each iteration of bingo,” Knudson recalls. “In those early rules, each machine would have to be daubed—the button would have to be pressed three different times in the sequence of play. The product that would have been generated by the rules that were proposed would not have been financially viable for tribes.
“Those rules had been put together by the official who led the technical branch of NIGC, and he had never been played, looked at or studied slot machines.”
He says the group held “meeting after meeting,” stressing that the tribes would be at a “geographic disadvantage” with Class III commercial casinos nearby, as well as a product disadvantage. “Also, they would have been at a manufacturer disadvantage, because manufacturers weren’t going to address that level of product.” Hogen moved a bit toward the group’s opinions in each meeting, and subsequent NIGC commissioners abandoned the proposed rules.
‘Point of the Spear’
These days, Knudson continues his relationship with tribal clients, and his efforts to advance tribal gaming in general. “I’m still the point of the spear oftentimes with certain tribes where there are issues, or where there are opportunities, or with certain tribes that are evolving where I can be of assistance to them outside of any direct sales.
“My second role is one of mentorship of men and women, internally at IGT and externally within Indian Country. I try to get them to set goals, I try to move them through operations. I love the role of developing tribal folks out there, some of whom we are looking at very carefully for positions within IGT over time.”
Aside from that, Knudson is sought after for his expertise on tribal gaming, having been involved in the sector from the very beginning. He is regularly on panels at the NIGA trade show, G2E and other conferences, spreading the news of Indian gaming.
“A lot of people just see me having dinners with tribes. They don’t know that I have an agenda of 12 things right now that I’m working with these tribes to try to accomplish,” Knudson says. “What I’ve done is work for a long time to seek economic justice and fairness for a group of people who haven’t been treated fairly for hundreds of years.”
It all adds up to the AGA Gaming Hall of Fame—and one totally deserved induction.
