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Distributing the Wealth: Tribe Spreads its Casino Revenue to Other Tribes and Charities

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When the Shakopee Mdewakanton Sioux (Dakota) Community became the most prosperous tribe in Minnesota from its casino ventures located in close proximity to the Minneapolis-St. Paul metropolitan area, according to Global Gaming Business Magazine, the tribe, which has faced economic struggles of its own, was eager to share its good fortune with others.

“We recognized groups that had helped us before gaming and we wanted to support them,” Stanley Crooks, chairman of the community since 1992, told Global Gaming Business, which recognized him as one of its "25 People to Watch" in 2011. “We started modestly, sharing our extra revenues with them. I think in the first year, it was something like $3 million. Now our charitable donations reach more than $21 million a year.”

The Shakopee Mdewakanton Sioux Community (SMSC), located in Prior Lake and Shakopee, Minnesota, was able to give $60.8 million in loans and $28,546,620 in direct gifts and services to less fortunate American Indian tribes for fiscal year 2010, which ended September 30, 2010, according to its recently released 2010 Donation Report. Success with Little Six Casino and the Mystic Lake Casino Hotel, now the premiere gaming center in the Twin Cities area, allowed the tribe to distribute its wealth, reported the Minneapolis St. Paul Business Journal. In the past thirteen years, the community has given away over more than $192.7 million dollars in grants and charitable donations, states its donation report. In total, the SMSC has committed over half a billion dollars in loans and grants to Indian tribes, American Indian organizations, schools and educational organizations, charitable organizations, and others.

“As Dakota people, we have a long tradition of sharing with others so it is important for us to give back to the larger community," Crooks said in the donation report. "Before Indian gaming, many of us lived in poverty and struggled to survive. Times were hard. Now we are able to help others."

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Little Six Casino opened in 1982 as a bingo parlor and evolved into a casino in 1988 with the passage of the Indian Gaming Regulatory Act, according to the casino's website. SMSC opened Mystic Lake two years later and virtually hit the jackpot, soon sharing its winnings with others.

While Crooks acknowledges that gaming has been "instrumental" in the tribe's transformation from "a proud but economically distressed Indian Community to becoming self sufficient," he is quick to emphasize that tribes should not rely on the sometimes short-lived success of casinos. “Gaming was always supposed to be a supplemental income,” he told Global Gaming Business. “Tribes that don’t have a big land base or a favorable location must look to diversification, because gaming will sustain them for a period of time, but it might drop off at any time due to political whims or other issues.”

Loans in 2010 went to more than a dozen tribes to fund new casinos, construction of tribal offices, land buy backs, convenience stores, construction of a living center for tribal elders, and much more. Crooks told Global Gaming Business that its loan process is strategic. Tribes must apply for them and submit a proposal and business plan. “We have a law firm that does due diligence for us and evaluates the plan before we go ahead and make the loan,” Crooks said. “If we determine that it’s a solid plan with a good chance for success, then we offer a reasonable interest rate and repayment terms.”

The report states that more than $17 million in economic development grants were provided to 18 tribes, of which 15 received $1 million each. Four of those tribes are located n Minnesota, and the others are out-of-state: in Nebraska, South Dakota, Wisconsin and North Dakota, reported the Minneapolis St. Paul Business Journal.