A Vision of Development
Gaming Background: Pursuing Economic Development
The principal goal of modern-day Federal Indian policy is to promote tribal economic development, tribal self-sufficiency and strong tribal government.
On October 17, 1988, Congress passed the Indian Gaming Regulatory Act (IGRA) and this further codified federal Indian policy. A provision of the Act states: "Net revenues from any tribal gaming are not to be used for purposes other than:
- to fund tribal government operations or programs;
- to provide for the general welfare of the Indian nation and its members;
- to promote tribal economic development;
- to donate to charitable organizations; or
- to help fund operations of local government agencies."
The Act does not require expenditure for each category; it only allows expenditures for the listed categories. A further policy limitation is that a significant portion of the revenues must be spent to fund tribal government operations and programs. A formal expenditure plan for gaming revenues is only required if the nation decides to make per capita payments to its members from these revenues. Once such a plan is adopted, its terms must be complied with until modified or cancelled. Available funds, not spent in a particular category in accordance with the plan, must be carried over to the next year until completely used.
As stated in the previous paragraph, the Indian Gaming Regulatory Act allows tribes to develop casinos as means of promoting economic development, self-sufficiency and strong tribal government. However, IGRA requires the tribes to work with state governments to create a compact allowing the tribes to operate casinos within the state. In 1993, the four Kansas tribes (The Potawatomi, Kickapoo, Sac and Fox and Iowa) presented the State of Kansas with a proposed agreement. The State legislature failed to act on the proposal in 1993 and early 1994, which forced the tribes to sue the State for failing to negotiate in good faith. In early 1995, the Potawatomi Nation and the State of Kansas reached an agreement for the needed compact.
In January 1997, the Nation entered into management and development agreements with Harrah's Kansas Casino Corporation to assist the Nation in obtaining financing for the permanent gaming facility, and furnishing technical expertise related to the operation of the facility. Prairie Band Potawatomi Nation assumed management of the casino in July, 2007 and exclusive right to manage, operate and maintain the facility. The ownership and operation of casino gaming is subject to extensive state oversight and tribal regulation. As a condition of obtaining and maintaining a gaming license, the Casino must comply with the terms of the 1995 compact. The facility has created over a thousand jobs, generating millions in wages and revenue. The Nation is the largest employer in Jackson County, through its casino. (PBPN may also be considered the largest county employer, through tribal government.)
Prairie Band Casino and Resort/At-a-Glance Numbers
The current casino entertainment complex encompasses 63,000 square feet, featuring more than 1000 slot machines, 30 table games, a Longhouse Buffet, Gift Shop, Buffalo Grill, and the Three Fires Steakhouse. Adjoining the facility is a 297-room hotel with a beautiful courtyard and two relaxing hot tubs and convention center which includes 1,000, 4,000, 8,000 or 12,000 sq. ft. meeting rooms available with full catering and banquet facilities. Since the casino's opening, it has become a first-rate entertainment destination for customers from South Dakota, Texas, Oklahoma, Nebraska, Iowa and other states, and the Nation has used its profits to improve the quality of life, safety and health care for tribal members. The casino has attracted millions of visitors since its opening.
The casino is located in the southeastern quadrant of the Potawatomi Reservation, near the junction of Highway 75 and Road 150. The casino is approximately 15 miles north of Topeka, KS.
Building on Success
Prairie Band Casino and Resort’s impact is felt both in Jackson County and Shawnee County. Several residents of the counties work for the casino and the local governments and businesses have benefited significantly, as the wages paid casino employees are spent in the area, creating business income and government tax revenues.
Technology Infrastructure Introduction
1995 Economic Base Analysis
A 1995 analysis of the reservation economy, using economic base theory, provides a good explanation of the poor conditions of the Potawatomi reservation. The report stated:
There are very few basic sector entities exporting from the reservation. The basic sector entity most common to other similar economies is the local farmers. Crops, cattle and hay are exported by local farmers to provide income and employment.
Labor services are also provided from the reservation by residents working in Topeka, Mayetta, Hoyt, Holton and other places off the reservation. Many farmers work full-time at other jobs and part-time in farming. The Bingo Hall, Cokely Farms Hunting Club and the Thunderhill Racetrack provide exports of entertainment services to patrons. The two gas stations along U.S. Highway also provide exports of services and products to non-resident customers.
One of the most significant basic sector factors in the local economy, is the federal government. Nearly a million dollars in grants, and aid of various kinds, comes to the reservation from the Bureau of Indian Affairs, Housing and Urban Development, the Environmental Protection Agency and other federal agencies. However, much of this money goes to outside contractors, who perform the work.
The non-basic sector of the economy is even less developed than the basic sector. There are very few non-basic sector entities providing services to local residents of the reservation.
An analysis depicting the location of the non-farming business entities on the reservation indicates that there are too few basic sector businesses and that they are almost exclusively owned by non-Indians. There is no multiplication effect from the non-basic sector. For example, clothing, groceries and other personal needs are all purchased off the reservation.
Updates on Economic Conditions
One of the immediate benefits of gaming revenues for the Prairie Band Potawatomi Nation is the opportunity for new development and improvements to the reservation infrastructure.
A study conducted in 2008 divided technology infrastructure into two main categories: basic and advanced. Basic technology infrastructure includes those services that are considered essential for everyday economic activities and to maintain an average standard of living. This includes telephones, roads, water and sewer systems, basic educational facilities and the like, required to maintain population levels. These services have to be improved for growth to occur on the reservation. This includes more affordable housing and improved water and sewer lines. In addition, the Nation will provide improved recreational services in the form of renovated parks and proposed youth building upgrades. In the Potawatomi case, the early years of casino revenues focused on creating a solid foundation for future business opportunities and on the basic technology infrastructure needs. For years, the Potawatomi had poor roads, telephone service, water and electric service. The financial benefits provided by the casino have enabled the Nation to address many of these basic needs.
Some of the basic technology infrastructure projects include services that might be considered optional or unnecessary for conducting business and living comfortably by a significant segment of the population. Projects have included Internet access, fiber optic, and distance-learning programs. In the Indian community these are considered luxuries, but now they will have become a central requirement for conducting business. In 2004, the installation of a cellular tower to expand cellular service on the reservation has promoted better cellular reception. This has enabled increased emergency services along with individual needs.
Revenue Allocation Plan
A PBPN election held on February 26, 2008 approved the Option 1 revenue allocation plan.
This approved RAP reduces Economic Development to the actual PBPN development expenses. General Welfare includes Social Services, Housing, Education, and other welfare programs for the membership. Government operations includes Health Clinic, Public Works, and other functional government programs. All budgets have been adjusted to reflect the per capita increase to 48%. The revised RAP was submitted to the Bureau of Indian Affairs, and they approved the plan.
The Indian Gaming Regulatory Act requires Tribes who distribute per-capita payments to its members to do so within an approved Revenue Allocation Plan (RAP). The RAP defines each tribe's expenditures for the following purposes:
(a) To fund tribal government operations or programs;
(b) To provide for the general welfare of your tribe and its members;
(c) To promote tribal economic development;
(d) To donate to charitable organizations; or
(e) To help fund operations of local government agencies.