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Tribes in Michigan struggle with decision to shut down casinos for coronavirus

The Kewadin Casino in Manistique is one of several owned by the Sault Ste. Marie Tribe of Chippewa Indians.

Update 03/17/2010: The Sault Ste. Marie Tribe of Chippewa Indians will close Kewadin Casinos by 03/22.

Update 03/16/2020: Bay Mills Indian Community will close Bay Mills Resort and Casino by 03/20.

IPR has compiled a list of coronavirus response actions taken by tribal governments in Michigan — you can find it here.

Gov. Gretchen Whitmer announcedSunday that she’s working to shut down privately-owned casinos as part of Michigan’s efforts to slow the spread of coronavirus.

Whitmer's executive orders don’t apply to casinos owned by Native American tribes, and as sovereign nations, the Michigan Gaming Control Board can’t make them do anything.

Still, some tribes have closed their casinos. Some have not. It’s a complicated decision, as many rely on casino revenue to fund their governments.

An unprecedented situation

The Sault Ste. Marie Tribe of Chippewa Indians is the largest tribe east of the Mississippi River, with 44,000 citizens. One of them, Austin Lowes, wants the Sault Tribe to consider closing its casinos in response to the coronavirus outbreak.

“Medical experts strongly recommend that 250 people or more should not congregate in the same place,” says Lowes. “The casino is that to a T. It's a place where people go, germs are spread.”

The Trump administration is now recommending against gatherings of 10 or more people.

Lowes wants quick action. He’s seen what’s happening in Italy. He knows this could be bad for older adults.

“The Sault Tribe has a lot of people in the community who are elders, who are native speakers,” he says. “To lose one of those, it would be absolutely terrible for our culture.”

However, casino revenue is critical to his tribal government. Sault Tribe Chairman Aaron Payment says casino profits make up an important gap in federal funding.

“Our service area population is funded at about 40 percent of our needs,” he says. “So we substitute the other 60 percent with revenue from our casino.”

The money goes to things like the Sault Tribe’s health department, social services, law enforcement and environmental monitoring.

“One-hundred percent of our net revenues goes for services,” says Payment. “Right now, it's all allocated.”

There could be some relief from the federal government. When President Donald Trump approved $8.3 billion for COVID-19 assistance earlier this month, $40 million of it was set aside for tribes.

Ever since, Payment has been trying to find out when and how tribes will get the money.

“We've been trying to get answers...and this was over a week ago now,” he says. “We wanna be sure that it is maximally flexible and tribes can cater funds to their needs.”

He calls this whole situation “unprecedented.” The Sault Tribe is holding a special meeting of its tribal council on Tuesday, where it will consider closing its casinos.

Limited cash reserves — no reserves

A few miles west along the Lake Superior shoreline, the Bay Mills Indian Community has closed the smaller of its two casinos.

The larger Bay Mills Resort and Casino will be closed starting Friday, March 20.

Bay Mills Indian Community Chairman Bryan Newland says his tribe doesn’t have a rainy day fund, though it’s a long-term goal of his.

"A Tribe like Bay Mills has very little margin on our cash flow, and very limited cash reserves," says Newland. "Full shutdown, while paying workers, could dry us out very quickly."

Newland says it’s hard to tell from the outside how shutting down a casino will impact a tribe. It depends on its debt, revenue, and how many citizens it's providing for.

There are 12 federally-recognized tribes in the state. Austin Lowe thinks they’re likely paying close attention to each other.

“If other tribes close their casinos, I could definitely see the Sault Tribe following suit,” he says.

Lowe also thinks no matter what, coronavirus is going to affect the tribe’s economy. He says it needs to diversify its sources of revenue.

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Kaye is an alumnus of Michigan Tech's environmental engineering program. She got her start making maps for the Traverse City-Based water news organization Circle of Blue, and, since then, she's been pretty devoted to science communication and data visualization.
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