Not all First Nations reaping casino benefits

More than a decade after the Manitoba government embarked on a plan to create native casinos in the province, many First Nations have received almost no financial benefit.

But one casino pays for 14 people to attend Las Vegas convention

Many Manitoba First Nations have received almost no financial benefit from the province's native-owned casinos. 2:42

More than a decade after the Manitoba government embarked on a plan to create native casinos in the province, many First Nations have received almost no financial benefit.

A CBC News investigation has found that many aboriginal communities have received only a single payment of $13,128 in December 2010.

CBC News series

Tune in to Information Radio and CBC News: Winnipeg this week for our special series on First Nations casinos in Manitoba.

Read our first story from Monday: Management fees eat up First Nation casino profits 

On Wednesday: Assembly of Manitoba Chiefs' grand chief talks about lessons learned.

"I consider it a joke, a slap in the face," said Chief John Thunder of the Buffalo Point First Nation.

His community didn't keep the money. Instead, Thunder sent it back to the Assembly of Manitoba Chiefs, where the casino funds reserved for sharing among First Nations are kept in trust.

"You're definitely not going to see any of the poverty in Indian country being solved," Thunder said.

CBC News has also learned the South Beach Casino and Resort on the Brokenhead Ojibway Nation spent thousands of dollars to send its entire board of directors, as well as some staff members — a total of 14 people — to a casino convention in Las Vegas earlier this month.

"It's always a learning venture for us when we come here, because there's always new inventions coming up, new … technology," South Beach board chairman Furlon Barker told CBC News at the Las Vegas trade show.

Barker says he and the entire South Beach board have attended the trade show several times. 

But Thunder and other chiefs questioned the need to send that many people.

"I don't have a problem with two or three delegates going and getting the job done. But you don't need a whole contingency of 14 people to do that," said Thunder.

Revenue sharing defended

In an interview at the South Beach casino, Brokenhead Ojibway Nation Chief Debbie Chief defends how revenues are being shared.

"What did they get before that? Zero," said Chief.

Profit-sharing obligation reduced

The Manitoba government waived profit-sharing requirements for both the South Beach Casino and Aseneskak Casino for five years, acting on resolutions of the Assembly of Manitoba Chiefs, August 2006.

In 2009, the provincial government signed a new gaming agreement with Aseneskak, reducing the casino's profit-sharing obligation from 27.5 per cent to 7.5 per cent, again acting on an AMC resolution.

Manitoba chiefs are now asking the province to sign a similar agreement with South Beach.

The provincial government launched a proposal call in 2000 to establish as many as five First Nations casinos.

In 2002, a group of six First Nations opened Aseneskak Casino near The Pas, Man. It lost money in its early days, but it has since produced net earnings totalling just under $10 million.

A group of seven First Nations opened the South Beach casino on the Brokenhead Ojibway Nation in 2005. It has produced net earnings totalling $39 million.

Gaming agreements between the casinos and the province initially specified that 27.5 per cent of net income should be shared equally among all 63 Manitoba First Nations.

Since then, the sharing formula has been changed to give those outside the ownership group a smaller share.

"I can't really say they've benefited at all," said Yale Belanger, an associate professor of native studies at the University of Lethbridge and an expert on First Nations casinos in Canada.

"A one-time $13,000 payment is insignificant on so many levels and the hope of what the casinos could become could be lost, just based on the minimal returns that they've experienced," Belanger told CBC News in an interview.

'We had to work for it'

Meanwhile, the seven First Nations that own South Beach have received dividends significantly greater, totalling $2.4 million each.

"You've got to remember, going back in history, how much work went into planning this casino. It didn't just happen 'like that,'" said Chief, justifying her community's larger slice of the proceeds.

"It took years and years of planning. It wasn't just handed to us. We had to work for it," she said.

Brokenhead and its partners in the ownership group have been able to enjoy extra benefits with casino proceeds, such as cash payments to its community members.

For example, Brokenhead provides $100 for each of its band members at Christmas time.   Driving through the Brokenhead Ojibway Nation, along Highway 59 close to Lake Winnipeg, one can see signs of the casino money at work. Heavy equipment has been moving earth around where the First Nation is building a new community hall and improving roadways.

Yet some chiefs outside the South Beach ownership group are critical of casino expenses such as the more than $43-million cost to hire a Minneapolis-based company, Hemisphere Gaming, to finance and manage the casino.

To that criticism, the owners say there wouldn't have been a casino at all without the start-up loan provided by Hemisphere.

Other chiefs said they simply want more casino cash to flow into their communities.

"This whole thing was for all the First Nations. It should be coming to the grassroots," said Chief Ken Chalmers of the Birdtail Sioux First Nation.

Despite repeated requests, CBC News has been unable to get an interview with Dave Chomiak, Manitoba's minister responsible for gaming.