- Details
- By Rob Capriccioso
- Gaming
WASHINGTON — E. Sequoyah Simermeyer was confirmed by the Senate to become chairman of the National Indian Gaming Commission in November 2019. Just four months later, the world, including many of the tribal casinos he’s in charge of regulating, shut down.
Want more news like this? Get the free weekly newsletter.
Now, 17 months on, he’s sharing the revenue fallout from 2020 via a new gross gaming revenue report by the NIGC that found a 19.5-percent decline in tribal gaming from 2019 to 2020. Out of 524 submissions and 248 tribes, the total revenue for 2020 was $27.8 billion, down $6.7 billion from $34.6 billion in 2019.
Gross tribal gaming revenues hadn’t been that low since 2012.
Simermeyer (Coharie Tribe of North Carolina) seems generally upbeat about the industry’s prospects for 2021. Anecdotally, he says some tribal gaming ventures appear to be doing well. Even though he’s a regulator, and it’s not really his job to paint a rosy picture, he’s committed a large chunk of his work life to tribal gaming and to Indian economic development and Native policy in general, trying to make it all work better. It makes logical sense that he wants to see the light.
Some people have scrutinized him and his NIGC colleagues for attending recent gaming conferences in Las Vegas and Oklahoma, arguing that now is still not the time for business as usual given the ongoing pandemic. They noted that commission staffers didn’t appear to be socially distancing or wearing masks during portions of at least one of the conferences, as evidenced through videos posted on social media, which ended up being taken down by the NIGC after the criticism. Some believe these actions seemed to run contrary to recent guidance offered by the NIGC itself that says tribal casinos should follow CDC guidelines.
Simermeyer does not have an easy posture to balance, with the delta variant of COVID-19 still a very real challenge for society at large and in Indian Country, where just like everywhere else some people remain unvaccinated, including all children under age 12. And Natives have been shown in some instances to suffer at a larger rate from the very comorbidities that have been shown to make COVID even more dangerous.
At the same time, Native American economies no doubt took a nosedive in 2020, and those effects also account for a major detriment to the health and livelihoods of tribal citizens. Five percent of Indian casinos, approximately 80, are still currently shut, Simermeyer told Tribal Business News.
The NIGC job comes with scrutiny, Simermeyer knows all too well, including recent critiques by former Senate Majority Leader Harry Reid in an interview with Tribal Business News. Some people — before and after Simermeyer was confirmed — have gone so far as to call into question the chairman’s own tribal roots. Having been appointed to the position by former President Donald Trump, he’s also experienced negativities stemming from Trump’s support, with some questioning his loyalty to Indian Country since Trump expressed sentiments against tribes and Indian casinos when he was a businessman in the 1990s. It’s also well known that the former president made comments that many people perceived to be racist toward Indians while he served in office.
Still, Simermeyer says that Indian gaming should not be partisan. Having served on the commission first during the Obama and Trump administrations as an associate commissioner and then in the latter part of the Trump and now Biden administrations as chairman, he’s one of the rare federal political appointees who has served across Democratic and Republican administrations.
At least with the press, Simermeyer plays his cards close to the vest, staying buttoned-up for the most part during our recent conversation. His staff who sat in on the phone interview said they were impressed with what he did share, so perhaps we’ll hear even more from him in the future.
The rest of our interview follows.
The 2020 drop in tribal gaming revenues wasn’t a big surprise, but was there anything interesting about it to you?
During the pandemic with the record amount of closures, which the industry hadn't seen before, it indicated there was going to be an impact on the revenue, and so we expected that. At the NIGC, from a regulator’s perspective, I think we didn’t have any detail on it until we had the end of the fiscal year audits to see how significant it was. One thing we reported this year when we released the report that we don’t usually do is to show the long-term, 20-year growth in the industry. That was significant to us that there had been a steady growth, and it put into context how significant this year’s dip was when you look at it in the longer history.
Different regions of Indian Country had varying rates of decline. Did anything stand out to you about that? Any thoughts on why some regions might have had larger declines?
Generally, we provide the national revenue number that we received, and then according to our different NIGC regions. But in the past, and probably it’s the same with this year, those regions are administratively determined and (do) not necessarily reflect any market consideration.
(EDITOR’S NOTE: Yvonne Lee, CFO for the NIGC, who sat in on the interview, added here: ‘The overall decrease in fiscal year 2020 was primarily due to the pandemic. However, the impact of the pandemic varied, and varied greatly from operation to operation. And the year-over-year gross gaming revenue change by region could also be attributable to other factors, such as new gaming operations, expansion to existing operations, and whether there were temporary or permanent closures or changes in the operation’s fiscal year. So all those factors could also impact the specific regions’ decrease or increase in any given year.’)
Did you suspect it could be much worse than the numbers you ended up reporting? Did you have any sense how bad it would be?
We still try to manage uncertainty from the impact that the pandemic is having, and I think that was the case throughout 2020. But we really didn’t know any kind of data until we received a fiscal year report. We monitored throughout the year, and we provided online an infographic I would say, at least at some points, every week, sometimes, twice a month, that looked at key indicators that we were aware of throughout the year on a number of closures. We tracked the number of criminal history reports that we were issuing compared to past years, which was often a way to indicate where hiring was taking place. It gave us a sense of the impact that the closures were having and the length of time of the closures, but it was really different from area to area, and it was something that we knew. We tried to manage the uncertainty, but with regard to specific numbers, we didn’t know that with any sort of detail until we had the fiscal year reports for 2020.
In terms of what you’re seeing for 2021 with hiring data and anecdotally, does it seem that the situation has rapidly improved? Is that what your hiring data is showing right now?
At this point, it’s just anecdotal. … We don’t track it from quarter to quarter. We work with operations and with the tribal regulatory bodies on their cycles. But we do see, and we noted when we were releasing the report, that there are a lot of investments that are being made there in the areas of public health, but also in workforce development, in terms of developing continuity of operations and other enterprise investments that have a lot of potential for a strong, sustainable recovery. As we track the number of closures, at this point, 95 percent of all operations are open. They’re open in a way that’s modified the operations. That’s a good sign that the operations are returning.
The 5 percent that are still closed, are they ones that have closed recently because of the delta variant, or have they remained closed since the initial pandemic?
There are about 80 operations that have remained closed for six months or longer, since the start of the pandemic. Of those 80, about 30 operations have remained continually closed since about mid March 2020. So that gives an extensive indication of long-term closures. Recently, there are some that have closed to adjust their precautions and measures to make sure that they’re finding local solutions for how they’re managing the risk associated with the pandemic.
Those 80, do they share any common characteristics? Are they in certain regions, or are they spread out throughout Indian Country? Can you generalize anything about them?
They’re not all from one state or one region. They’re from different parts of the country. I think we can assume that it was initiated by the pandemic, but I don’t know that we have insights into (it). … There are other reasons for closures and openings, and there could be other reasons, but they’re not all from one state or all from one region.
The American Gaming Association puts out detailed reports on commercial gaming revenue by type of gaming, and the data are updated more frequently than NIGC’s data. Do you wish the NIGC could do more detailed reporting of tribal gaming revenue? If so, how would you be able to do that? More staff? More resources, more money?
Like I said, we don’t do quarter-by-quarter reporting on the revenues. We’re unique in that, as the federal regulatory body, we work with a variety of operations and tribes. In our regulations’ layout, the process for making the annual independent audits or independent financial reviews that we have and that diversity across Indian Country in our regulations is accounted for with the deadlines we have, because not all tribes operate on the same budget cycles. So our regulations are trying to provide as much insight and flexibility for framework from the regulatory community that’s appropriate. We can highlight and bring attention to those issues from the regulators’ perspective. Economically, if there's improved regulatory capacity with a strong and stable industry, we don’t have a role in terms of developing the market. So our information is intended to give a view of what the revenues are for a particular year.
It sounds like you’re happy with the way you’re doing the reporting now. Would you want it to change at all? You’re being responsive to tribal governments, and obviously, you're putting out some good information on this front. But is there anything you would want to modify?
Sure. I think as a commission, we can and we are doing more of that bringing attention, either through anecdotally what we’re seeing in terms of, particularly, investments that are being made at the regulatory level. I think we can continue to use the commission as a platform to show that. The structure of the agency, our commitment to promulgating regulations that would have a significant impact on the federal-tribal relationship requires us to engage in consultation with tribes if we’re to look at a different way of doing this. But I think as of right now that the regulations, as we look at them, are intended to provide enough predictability for operations and regulatory authorities and tribal lawmakers. And so we couldn’t change that, but we would work with tribes to see what would be the way to make those changes in the regulations.
As a result of the delta variant, the NIGC recently released guidance to tribes, reminding them about CDC guidelines and the public health safety practices during the pandemic. How do you balance providing that kind of public safety information to tribes when tribes have their own sovereignty and self-determination?
If you look at the resources, the most recent one I believe is that July 30 guidance on the fully vaccinated individuals and tracking the variants, and making federal public health resources available. Throughout 2020, through our outreach and our monitoring efforts — and our communication efforts, particularly with the regulatory community, as well as with the operations and with tribal lawmakers — we focused on what our regulations set forward for compliance with environment and public health safety standards. It’s each tribal gaming regulatory authority in place for each of the over 240 tribes that (work with) the National Indian Gaming Commission (to ensure) that environment, public health and safety standards are in place and that they’re adequate.
One of the approaches in our communication across our regulatory network, as you’ve probably seen on our website, was to put out a number of resources for the Indian gaming industry to help with making that assessment — anything from environment, public health and safety assessments and checklists, to frequently asked questions to help with operational considerations like closures and to help with continuity of staffing in the regulatory community, as well as an infectious disease plan, and in other areas that we saw a need, like in I.T. vulnerabilities and being responsive … the sophistication of the cyber attacks that were taking place in part because of the change in operations status within different parts of the industry.
You've worked at the commission now under the Obama, Trump and Biden administrations. You were appointed chairman under President Trump, and we all know he was famously more a champion of commercial gaming over tribal gaming, especially when he was a businessman in the early 1990s. As a tribal citizen yourself, was his position on that ever an issue for you, or something you thought about?
My experience at the commission since joining the commission in 2015 has been that the independence of the regulatory body, it’s been always respected in my experience. And the importance of Indian gaming to tribal communities, to the jobs it creates, to the ability to provide social, education, and general welfare services to tribal communities to improve regional economies outside of tribal communities, to help tribes work with other jurisdictions in ways that that is in line with their vision for their community, I think that that’s always been respected since I’ve been at the commission.
Do you feel you have been independently respected across the three administrations that you’ve worked under?
Yeah, my experience since joining the commission has been that the NIGC’s role as an independent federal regulatory body has been understood.
Tribal gaming sometimes gets political. Do you feel like tribal gaming should be a partisan issue?
Well, I can only speak from the regulator’s perspective at NIGC, and I think IGRA envisions that the commission would have a diversity of views on this, and it’s been my experience since being on the commission as the commissioner, (and then) as chairman, that from the regulatory role that it plays, we can get our work done in a bipartisan or nonpartisan way.
You’ve made clear that the NIGC is an independent body. How does it interact with the Interior Department? Some people have called the NIGC a quasi-independent body. Help our readers understand, how are you independent from Interior? How does that relationship with Interior work?
The Indian Gaming Regulatory Act lays out certain responsibilities that lie with the Department of the Interior, where the National Indian Gaming Commission has a role under the Indian Gaming Regulatory Act. The appointment of two of the members of the Commission is from the Secretary of the Interior. The compact review and approval processes is a responsibility that was provided to the Secretary of the Interior. Similarly, the allocation plans are a regulation from the Department of the Interior that are in place.
We, as the regulatory body, are an independent regulatory body within the Department of the Interior and have the authority to promulgate our own regulations under the Indian Gaming Regulatory Act. We have the authority to monitor gaming and to review, whether it’s management agreements, or ordinances which receive their own license. And we investigate and bring enforcement actions that may result in a civil fine assessment or a notice of violation or a temporary closure order or a permanent closure order. Those are independent responsibilities within the National Indian Gaming Commission.
If the Secretary of the Interior or the Assistant Secretary – Indian Affairs doesn’t like a decision you come out with, do they have the ability to veto your decision? How does that work?
The agency’s actions are final. But I’ll say that the NIGC, for example, in a temporary closure order that’s received, (it) can be appealed to the full commission. After the appeal of that temporary closure order, if the full commission determines that it’s a permanent closure order, that’s a final agency action. The parties can then bring suit on if they wish, but it’s a final action. I haven’t had the experience of there necessarily being a disagreement. I’m not sure how that would arise in terms of how our responsibilities are divided up. But the decisions that are before the agency, once going through the appeals process, are final agency actions.
You were confirmed as chairman in 2019, just before the pandemic. Has the job been more difficult or challenging or different than you expected?
At the start of 2020, people weren’t expecting that we’d have these historic levels of closures that we saw during 2020. And so I do think that as the agency navigated our role in that, we worked closer across the tribal gaming regulatory community, particularly talking about environment, public health and safety, ensuring quality standards, and (making sure) they are in place, and assessing procedures to make sure that that takes place. I think that at the start of 2020, a focus on preparedness was a direction that the agency had to go in. Whether that was in responding to critical events, whether that be a cyber attack or a natural disaster or workforce development, particularly, to ensure continuity of operations with regulatory staff, I think that that preparedness focus is something that we’ll continue to have. That is going to build on that network across the regulatory community that has grown during 2020.
Did you attend the recent Reservation Economic Summit and National Indian Gaming Association gathering in Las Vegas?
We had a few speaking events at NIGA, yes.
Some people have expressed concern about these events taking place, especially because of the delta variant. Were you worried at all about attending those events in person?
We’ve had a strong effort internally with our own processes to ensure that we’re tracking and monitoring and using alternative ways to protect our team, our staff, who are working with and complying with federal public health guidelines, and on a regular basis have a team who is assessing our own internal protocols. So we’ve been cautious, and trying to find alternatives that are possible, and trying to make sure that we’re meeting our mission, too. And throughout all of that, complying with the federal guidelines.
Do you understand the feelings of people in Indian Country at large who feel nervous now about attending these big gatherings, gaming-focused gatherings?
I understand. You know, I think that’s definitely a consideration that the event would have to take into account. For example, during 2020, part of our outreach effort we made was to move all of our, at the NIGC, training events to virtual formats, and we continue to do that to not only provide cost savings for tribes, as well as the agency, to manage uncertainty. We do that to make sure that individuals who can’t participate (in person) can and are (more) comfortable with that. So I guess I can speak to it from the way that our operations have adjusted because of the public health needs.
I recently interviewed former Senate Majority Leader Harry Reid. He told me that he’s not really convinced that the National Indian Gaming Commission is strong enough to ferret out organized crime. He wants the NIGC to ‘get more boots on the ground.’ And he said: ‘They need more people who are experts at different aspects, especially now that we have so much gaming done on the internet.’ Of course, that’s all his opinion, but he also played a big part in drafting the Indian Gaming Regulatory Act, so his opinion, in some corners, holds weight. What do you think?
Well, we have a diverse team of subject matter experts in different areas of the industry, both operations and law enforcement. We’ve particularly invested during 2020 in the strength of our technology division. We brought on a strong chief information officer, both to help manage our internal operations, but in particular, to help build out the external I.T. support and guidance that we provide.
We are prioritizing issues, as I mentioned before, about the sophistication of cyber attacks and working to strengthen the regulatory community in that area. I think that that’s been a trajectory that we’ve been on, and we’re focusing on those resources. I don’t want to speak to Senator Reid’s insights, but … we are in those areas of technology growing. We’re looking at opportunities to increase our contact and presence, and so we’re going to continue to do that. Integrity is a focus area for the agency. That’s one of the areas that we focus on, and it looks at it from a broad area of ways that we have always focused on issues in emerging areas like technology.
Monitoring cybersecurity and technology doesn’t necessarily mean you need more boots on the ground, or does it?
Boots on the ground, I don’t know. Like I said, I don’t want to speak to Senator Reid’s comment. I don’t have a response to that, per se. But I appreciate the point about staffing as one approach. We also have enhancements in our partnerships. We have the opportunity to build out the technical expertise we have. So I think that whether it’s in the issue of technology threats that are always present in the industry, or whether it’s in another aspect that’s important to industry integrity, we’re always looking at what’s the appropriate presence that the NIGC has.
Are you allowed, in your position, to have a personal opinion that you can express publicly about a sticky issue like off-reservation gaming?
Am I allowed to talk to my own personal thoughts? I mean, I speak to issues in my capacity as chairman, and so as those issues might be relevant, I can address them. In terms of off reservation, I think that from the regulatory community’s perspective, or within IGRA, it provides for gaming on Indian land. That Indian land definition is laid out in IGRA.
Do you like to gamble?
I don’t personally do a lot of gambling, and that’s me personally. But I think we’re able to help the agency in my role as chairman without that. It’s the case that, particularly within Indian gaming operations, that the leadership of the agency doesn’t, or the members of the agency don’t participate in Indian gaming, gambling at Indian gaming operations.
When does your term end, and what will you do next?
I haven’t been thinking about what I will do next. I’m serving a three-year term, and it started at the beginning of 2020.
This interview has been edited and condensed for clarity.