Turning Gaming Dollars into Non-Gaming Revenue: Hedging for the Seventh Generation

There are four levels of diversification that tribes engage in: level one consists of amenities to gaming facilities; level two consists of tourist-reliant non-gaming businesses; level three involves on-reservation businesses that export products off the reservation; and the most sophisticated level involves acquiring off-reservation businesses in order to access more diverse markets. Historically, tribal economic development has been hindered by lack of access to capital markets, limitations placed on federal funding, federal Indian policy that requires creation of jobs on the reservation, information asymmetry and conservative investment strategies that are holdovers from how federal agencies invested tribal funds. This article provides a roadmap for cutting-edge tribal economic development that focuses on off-reservation investment by mobilizing investment banks and private equity in order to diversify tribal investment portfolios.