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COVID-19 shutdown of Potawatomi gaming exacted “devastating” toll
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COVID-19 shutdown of Potawatomi gaming exacted “devastating” toll

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Potawatomi Hotel & Casino in Milwaukee has reopened with a variety of operational changes due to the ongoing COVID-19 pandemic. Among the changes are slots-only gaming. Table gaming is currently closed.

MILWAUKEE — The protracted nearly three-month shutdown of the Forest County Potawatomi Community’s two Wisconsin gaming facilities due to the global COVID-19 pandemic have had far-reaching impacts on employees, tribal members, and the tribe’s gaming and governmental operations.

The 1,700-member tribe operates Potawatomi Hotel & Casino in Milwaukee’s Menomonee Valley near downtown. Drawing more than six million visitors annually, primarily from Wisconsin and neighboring Illinois, the expansive 1.1 million square foot facility is one the nation’s largest tribally owned and operated casinos, employing approximately 2,700 as one of Milwaukee’s top 25 largest employers.

Jeff Crawford, Attorney General for the Forest County Potawatomi Community, said 66% percent of its Milwaukee casino employees are drawn from area minority communities – black, Hispanic and Native American, among others.

The tribe also employs 200-plus in northern Wisconsin at its Potawatomi Carter Hotel & Casino at Wabeno in Forest County.

The Forest County Potawatomi Community closed its Wisconsin gaming facilities on March 16 in response to the growing COVID-19 pandemic in Wisconsin. Potawatomi Hotel & Casino in Milwaukee held a soft June 8-9 reopening for invited guests only. Beginning June 10, the property was opened on a limited basis to existing Fire Keeper’s Club members only.

Potawatomi Carter Hotel and Casino at Wabeno in Forest County is slated reopen later this month.

Phased reopening underway

The reopened Potawatomi Hotel & Casino is currently only hosting existing Fire Keeper’s Club members, accompanied by one guest, through an online reservation on the property’s website and downloadable app. Four three-hour reservation windows are available to eligible guests daily.

Only invited guests or those who have a reservation will be allowed on the property during the phased reopening. Potawtomi Hotel & Casino encourages guests to have patience during this phase and does not want guests to come to the property unless they are invited or have a specific reservation.

The Potawatomi Hotel & Casino reopened with significant operational changes due to the global COVID-19 pandemic. Its phase one reopening plan included reduced 9 a.m. to midnight casino operating hours and several major COVID-driven health and safety protocol changes that guests and staff were required to observe.

Guests must bring their own masks and staff will also wear face coverings. Guests and employees alike will have their temperatures taken upon arrival. Anyone with a temperature exceeding 100.4 degrees will not be allowed to enter.

Other operational changes include slots-only gaming operations, installation of plexiglass panels to separate slots players, and the closure of spa, fitness center and other amenities. Currently, only 25% of hotel rooms are available for guest occupancy. In regard to restaurant operations, while dine-in service is prohibited, take-out service is available from select on-site restaurants and cafés.

“[Reopening was] more of a science decision versus and economic decision,” said Rodney Ferguson, Potawatomi’s CEO and general manager. “We wanted to make sure that we had all the PPE in place, as well as all the training in place, to make sure that every guest and team member who came back to the property felt safe.”

Impact on employment widespread

Crawford said that while the initial impact of COVID-19 was blunted for employees, the severity of the impacts grew as the COVID-spurred closure of the tribe’s gaming facilities extended into April, May and June.

“The immediate impact to the employees was not that significant,” Crawford noted. “For the employees, we continued to pay them even though they weren’t working for approximately 30 days. After 30 days, however, we did have to furlough just over 3,000 employees.”

Crawford reported that the tribe as a whole employs nearly 4,500 employees – 2,700 at Potawatomi Hotel & Casino in Milwaukee, 700-plus for the tribal government, 400-500 for the tribal economic development corporation, and 200-plus at Potawatomi Hotel & Casino. Around 4,000 of the Forest County Potawatomi’s employees are based in the state, with tribal employees living in 31 of 72 Wisconsin counties.

About 700-750 of the 2,700 employees at Potawatomi Hotel & Casino in Milwaukee are currently back on the job according to Crawford.

With the limited partial opening, Crawford said the tribe’s Milwaukee gaming facility is “probably functioning at less than 25 percent of capacity,” though he noted early reports on business volumes with the limited opened were “meeting” the tribe’s admittedly “conservative” estimates.

“We are trying to walk a fine line that every business is trying to walk – can you be open and do it in a responsible manner?” Crawford explained. “We need to make sure that we have our steps and processes in place and people also want to have their comfort level taken care of, they need to be assured that we are taking this seriously and taking their best interests in mind.

With the tribe’s flagship Potawatomi Hotel & Casino in Milwaukee partially reopened and Potawatomi Carter Hotel & Casino coming online later this month, Crawford said he expects the tribe’s gaming business to rebound, but adds the big caveat question is the pace of recovery for the tribe’s gaming business, which is dependent on a host of issues out of the tribe’s control.

“I don’t think we anticipate any permanent losses of jobs in the Milwaukee casino, but it could be several months before we get fully ramped up in calling our employees back,” he noted. “It’s hard to say, because if the demand is there and the health numbers are under control, then obviously that would mean a faster, more aggressive opening, but there are multiple factors. Every tribal casino, every business and government, is anticipating there will be additional waves of COVID that will impact businesses and employees.”

Dividends eliminated

Beyond employment impacts, the temporary shutdown of gaming operations also have had a direct financial impact on the Forest County Potawatomi Community’s approximately 1,700 tribal members – 800-plus living on or near the 12,000-acre Potawatomi reservation in Forest County and northern Oconto County; 500-plus living elsewhere in Wisconsin, particularly in the Milwaukee area; and the remainder scattered across other states. The tribe has 6.95 acres of trust land in the City of Milwaukee

“Tribal members do receive some dividends from the gaming operations,” Crawford said, noting payments of dividends to tribal members has been temporarily suspended due to the COVID-19 pandemic shutdowns of the tribe’s gaming operations. “Those [dividends] have ended. None of our tribal members are getting rich from the dividends, but if they are solely relying on those dividends, they are being severely impacted.”

Potawatomi’s main economic driver

Crawford said gaming revenues comprise the vast majority of tribal government income.

“Gaming for Potawatomi and many tribes is the primary revenue generator for the tribal governments, although we have been diligently working on economic diversification,” he noted. “The vast majority of the tribal revenues come from our gaming operations. Over 90% of the tribal government budget is derived from tribal gaming.”

The Forest County Potawatomi has various revenue-sharing agreements with state and local governments. Crawford reported that the Potawatomi’s gaming compact sees the tribe pay 6.5% of net win to the State of Wisconsin, a number that he noted has “generally been in the $30 million-plus range a year,” a figure that pegs the tribe’s annual net win at around $460 million. In southeastern Wisconsin, the tribe pays 1.5% of net win to the City of Milwaukee and Milwaukee County—an estimated $6.9 million annually to each.

The nearly three month closure of the Forest County Potawatomi’s two Wisconsin gaming operations at Milwaukee and Wabeno has had a devastating impact on tribal government finances and operations.

“When we had to shut the casinos down … it ended all the meaningful revenues the tribe was receiving,” Crawford said. “Our revenue has essentially disappeared since mid-March – we’ve lost at least $70 million net as of the end of May. We’ve had a trickle of federal dollars flowing back to the tribe.”

As a result, tribal government employment and tribal services have seen deep cuts.

“We’ve had to cut our tribal government in half,” Crawford explained. “We essentially don’t have an effective operating budget for providing services. We are down to essential government services to take care of the needs of our members. Approximately 60% of our government employees have been furloughed. We are not giving a full array of government services to our members because entire departments have been shut down, entire services have been shut down.”

While many services have been scaled back or curtailed altogether because of COVID-19, Crawford credited proactive tribal public health and safety response to the global pandemic with sparing Potawatomi tribal members residing on the reservation from infection.

“Fortunately, because the tribe has taken this seriously, to our knowledge no tribal members living on the reservation have been infected,” he said, noting the tribe is prepared to handle any infections that may arise on the reservation.

The COVID-19 pandemic has made budgeting almost impossible for the Forest County Potwatomi.

“One thing it (COVID) is having an immediate impact on is budgeting,” Crawford said. “The current fiscal year budget has been destroyed. Tribal governments are generally on the federal government fiscal year, ending Sept. 30. Tribes are going through their budgeting processes right now and I think most tribes are having to anticipate revenues being down, at least through the next fiscal year, and then making adjustments accordingly to your programs, your number of employees, some of your activities. We are anticipating not hitting our prior full-year revenue number.”

With more than 500 recognized tribes – individual sovereign governments – in the U.S., Crawford noted there’s not a one-size-fits-all economic scenario for COVID-19 impacts on tribes.

“Not everyone’s positioned the same,” he said. “Some tribes are better positioned economically to weather the storm, others are not. Every tribe has been negatively impacted – the question is how long will it take for tribes to recover and get back to where they were pre-COVID. I think that’s going to be the big unknown. Some tribes are going to take a longer time to get back where they were pre-COVID than others.”

Crawford estimated that it will take the Forest County Potawatomi Community an estimated 1-2 fiscal years to recover from the economic impacts of COVID-19.

Diversification important

For the Forest County Potawatomi Community, diversification of tribal business enterprises beyond a singular reliance on gaming revenues has been an important area of focus for the tribe under the aegis of its Potawatomi Business Development Corp. (PBDC).

“We’ve been diversifying our economy since 2002,” Crawford noted. “We do have non-gaming businesses. We own and operate a data center, we have a cybersecurity firm, we own a construction management company and these types of businesses have not necessarily been as impacted [by COVID-19] – and that’s good.”

While non-gaming tribal enterprises include 1Prospect Technologies, Advancia, Advancia Technologies, Advancia Aeronautics, Potawatomi Training, Potawatomi Federal Solutions, Silver Lake Construction, Greenfire Management Services and Redhawk Network Security, Crawford noted that tribal gaming operations at Milwaukee and Wabeno still comprise 90% of the tribe’s annual governmental revenues.

Said Crawford, “The COVID pandemic has brought into clearer focus that we need to … increase our diversification.”

Moving forward, two things are immediately crucial for the Forest County Potawatomi Community.

“Getting our gaming operations going is absolutely necessary and diversifying our economy is critical to our future,” Crawford noted.

COVID to likely spur changes

Among the hard lessons coming out of the economic devastation left in the wake of the global COVID-19 pandemic is the need for changes in tribal government budgeting and services operations.

Among the areas of focus for tribes, Crawford said, are creating new or growing existing rainy day emergency fund set-asides.

“I think a lot of tribes are going to be looking at their budgeting processes and reevaluating keeping cash reserve emergency funds,” he said. “A lot of tribes are going to be asking, ‘What’s our emergency fund?’”

Tribal governments have to pay their way as they go, Crawford explained.

“Tribes have to have a balanced budget every year,” he said. “We do not have the property tax, income tax structure that mainstream state, federal and local governments have. We can’t tax our way out of COVID-19. We can’t run a budget deficit to get us out of COVID-19. We can’t print money to get out of COVID-19.”

Moving toward self-sufficiency

Helping somewhat soften the COVID-19 blow for the Forest County Potawatomi and other tribes, Crawford said, have been initiatives in recent years toward gaining self-sufficient food security.

In 2017, the tribe started Bodwéwadmi Ktëgan (Potawatomi Farm) in Forest County at Blackwell, with a mission of providing a natural, sustainable source of vegetables, fruit, greens, fish and animal protein to the tribal community.

To date, the Forest County Potawatomi Natural Resources Department has built four greenhouse-type high tunnels – with two more under construction—to allow vegetable to be planted earlier and stay in the ground later than its northern climate would typically allow. The tribe also planted apple, pear and plum orchards, brought in pigs, beef cattle, bison, chickens and turkeys, and planted strawberry, raspberry, blueberry and honeyberry patches. An aquaponic facility was established to provide year-round vegetables and fish. Honeybees were brought in to pollinate crops and provide honey. And a retail store has been established to sell to the general public.

“One of the things we’ve been doing, and what some other tribes have been doing, is focusing on food sovereignty — we would produce all the food that we would need,” Crawford explained. “That’s been a wise decision on our tribe’s part. We have our own farm and during the [COVID-19] pandemic we’ve been able to use food production from our farm to provide food for the tribal members in need, especially the elders. That effort will … continue into the future.”

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