Native American tribes hail newfound casino eligibility for PPP

Tuesday 28th April 2020

Lower 48 tribes also win ruling temporarily blocking funds from going to Alaskan tribal companies

In tiny Harlem, Mont., located about 40 miles south of the Canadian border with a population of 851, the Fort Belknap Casino is a big deal. It employs 21 workers and nets about $600,000 annually for two tribal nations on a nearby reservation.

But its doors have been closed for weeks now, due to coronavirus fears. And unlike other small businesses, casinos were ineligible for the government's Paycheck Protection Program to retain employees. Until last week.

The Small Business Administration has reversed its original stance disallowing casinos and other gaming establishments from getting PPP money and a later limit on the amount of allowable gaming revenues for a business to retain eligibility.

In an updated rule released Friday, the SBA said a business otherwise eligible for a PPP Loan would no longer be left out because of legal gaming revenues. "On further consideration, the Administrator, in consultation with the [Treasury Secretary Steven Mnuchin], believes this approach is more consistent with the policy aim of making PPP loans available to a broad segment of U.S. businesses," the SBA said.

Rob Williams, the general manager of the Fort Belknap Casino, said the decision was welcome news, as it would help defray some costs. "It will cover some," he said, including utilities and payrolls.

But he estimated the revenue lost in the past eight weeks at about $220,000, as the February through May season was usually the casino's busiest.

"People come from 100 miles in any direction to gamble, sometimes even further than that," he said, before the closure. "It's really slowed things down," Williams said.

Donovan White, chairman of the Sisseton Wahpeton Oyate tribal nation in North and South Dakota, said every job saved by the PPP change counts. "Indian gaming is our top job creator. Tribal governments are responsible to our people and our communities, and we had to shut down to protect the public, like other hotels, restaurants, and entertainment venues."

The PPP eligibility was also welcome news for non-Native casino operators.

"I'm grateful to President Trump and his administration for recognizing that commercial and tribal gaming industry employees deserve the same support available to other small businesses," said Bill Miller, president of the American Gaming Association. The group includes industry heavyweights like MGM Resorts International MGM, +3.80% and Wynn Resorts WYNN, -0.73% as well as tribal casinos, gaming suppliers and payment transaction companies.

Another thing that may help tribal finances is a ruling late Monday by the U.S. District Court for the District of Columbia that will keep part of the $8 billion in relief money for tribes in the coronavirus bill passed by Congress last month from going to for-profit Alaskan companies, at least temporarily.

The Treasury Department, after consulting with the director of the Bureau of Indian Affairs in the Interior Department, had planned to include Alaska Native Corporations, which are state-chartered companies with Native shareholders. This distribution upset many tribes in the contiguous U.S. states, who feared it would dilute the amounts available to them. The tribes say the Alaskan companies don't qualify as tribal governments to which lawmakers wanted the money to go.

"Because the court finds that Plaintiffs have made a clear showing that they are likely to suffer irreparable harm in the absence of preliminary relief, that they are likely to succeed on the merits, and the balance of the equities and the public interest favor an injunction, the court grants Plaintiffs' motions -- but only in part," wrote U.S. District Judge Amit Mehta.

In granting the temporary injunction sought by a number of tribes in three different lawsuits, Mehta said he wasn't ordering the Treasury to distribute all of the $8 billion to tribes, just that none of the money could be immediately disbursed to the companies.

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Still, the decision cheered many Indian Country advocates. The National Congress of American Indians, the oldest and largest intertribal group, tweeted: "Tribal nations should not have to wait any longer to receive relief funding as they battle the #coronavirus pandemic. We again call on Congress and the Administration to shift focus back to providing much needed funding to #IndianCountry."

Oklahoma Republican, Rep. Tom Cole, and one of four Native Americans in the House of Representatives, said before the decision was issued language to clear up the dispute could end up in another bill to deal with coronavirus. Alaskan Natives make up only about 5% of all Native Americans, he said. "They can't get 25% or 50% of the money. That's just not fair," he said.

After the court ruling, Sen. Lisa Murkowski, the Alaskan Republican, said she was very disappointed the court didn't agree the companies were eligible. "This is an issue of making sure that those costs that have been incurred on the benefit and for the behalf of Alaskan Natives, to cover those related costs to the coronavirus, can be reimbursed," she said.

Jonathan Nicholson is a Washington D.C. journalist who has covered economic and budget policy for more than 20 years.