The Nooksack Tribe of Washington last week shut down one of its two casinos, the Nooksack River Casino in Deming. The tribe has financial problems. Earlier this year a judge ordered the tribe to pay .7 million plus interest for failing to honor a loan.
The tribe took out $15 million in loans to fund a renovation but then defaulted on the loans a year later. Lenders had tried to keep the casino open so that it could repay its debts.
Closing the casino, which was the tribe’s first business operation, places 100 employees out of work, but Washington Indian Gaming Association Chairman Ron Allen, interviewed by the Seattle Times, called the action “a simple business decision.” So far, the tribe itself has remained silent on the closure.
People found out that the casino was closing on the morning that it happened. A phone was answered by a security officer, who said the casino was closed.
Later a sign appear on the door to the casino confirming that it had closed and informing people how they could cash in tickets and chips.
The action was not completely unexpected. Last summer tribal Chairman Bob Kelly told a tribal meeting that the River Casino might have to be shuttered. This aroused such criticism that the council did not act then.
The Great Recession hurt the River Casino, which was also battered by competition from other casinos in the region and in Canada.
The tribe’s newer casino, the Northwood Casino, has appeared to be better equipped to compete in this environment, and has made more money and brought in more customers.
Besides being troubled by being unable to pay its loans, many in the 3,000-member tribe have been embroiled in proceedings for “dis-enrolling” 300 members, a controversy that has dragged out over three years. One critic told the Seattle Times, “If they weren’t so focused on putting all their energy into disenrollment, they could have put more energy into the business.”
Normally tribal governments that move to take members off the rolls do so in order to create a pie that fewer members will have to divide. But the effect is also to create such political storms that casinos often suffer, losing money as a result.
In 2013 Indian Country Today published an article entitled, “Disenrollment is Bad for the Bottom Line.” Since then the publication has come up with more examples of how this happens. One of its examples was the Nooksack Tribe, whose efforts to disenroll 306 members for three years, “has brought the Nooksack government’s operations to a screeching halt, and impaired all of the Tribe’s businesses.”
The article noted that, “In 2013, the faction fired dozens of dis-enrollees who, over the last decade, had helped build the Tribe’s two casinos and keep Nooksack gaming operations in the black.”
The article also cites the example of another tribe whose casino closing has been much in the news, the Picayune Rancheria of Chukchansi Indians, which, the article states, “has been dis-enrolling members for decades,” and is “in the same financial purgatory.”
Another feature of tribes that become preoccupied with disenrollment, says the article, is “disenrollment seems to attract entrepreneurs of chaos: investors, lawyers, and consultants willing to do business with regimes that terminate their own members for profit. Self-styled “enrollment auditors” will examine a Tribe’s membership records, for a price. Ask the Eastern Band of Cherokee Indians, which expended $900,000 for an enrollment audit and in turn put over 300 members on the disenrollment chopping block.”
Increasingly tribes are coming under criticism from within Indian Country for the practice, which, the article states, “sends the wrong message to investors, especially as Indian public opinion against the practice increases.” Some potential investors are reluctant to put their money into such a risky environment.
It also has health care ramifications and recently the National Native American Bar Association linked the practice to human rights violations.
The article concludes, “Tribes looking to cut members should take the long view. What may be increased per capita payments today, will be the crippling or bankrupting political chaos of tomorrow. The expedient dismemberment of tribes is not worth it.”
