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Gun Lake Economic Report

Titled "Economic Impact Analysis: Match-E-Be-Nash-She-Wish Band of Pottawatomi Indians," the report analyzes the community benefits of the tribe's activities in West Michigan, including the construction and operation of Gun Lake Casino.

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2K views

Gun Lake Economic Report

Titled "Economic Impact Analysis: Match-E-Be-Nash-She-Wish Band of Pottawatomi Indians," the report analyzes the community benefits of the tribe's activities in West Michigan, including the construction and operation of Gun Lake Casino.

Uploaded by

WWMT
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Economic Impact Analysis:

Match-E-Be-Nash-She-Wish Band of
Pottawatomi Indians
Wayland, Michigan

Prepared for:

Gun Lake Tribe


October 2018

Prepared by:

The Innovation Group


400 North Peters Street
Suite 206
New Orleans, LA 70130
504.523.0888
www.theinnovationgroup.com
Gun Lake Tribe Economic Impact Analysis

Table of Contents

GUN LAKE TRIBE ECONOMIC IMPACT ANALYSIS ....................................................... 1


CUMULATIVE IMPACTS ................................................................................................................ 1
ONGOING ANNUAL IMPACTS ........................................................................................................ 2
REVENUE SHARING ...................................................................................................................... 3
METHODOLOGY ........................................................................................................................... 3

The Innovation Group Project #037-18 October 2018 Page i


GUN LAKE TRIBE ECONOMIC IMPACT ANALYSIS
The Gun Lake Tribe has had a major impact on the economy of western Michigan resulting from
the construction and operation of the Gun Lake Casino, which opened in 2011. The casino
employs more than 1,000 people and spends nearly $20 million annually on goods and services
from Michigan vendors. In addition, income from the casino funds Tribal government activity,
local and statewide investment funds for non-gaming development, and local government
mitigation payments.

Cumulative Impacts
Over the past seven years (2011-2017), the Gun Lake Tribe has added nearly $1.5 billion to
Michigan’s Gross Domestic Product (GDP).

This impact has resulted from the construction and operation of the casino and Tribal government
and enterprises, along with contributions to Michigan economic development and local
government.

Operation of the casino and Tribal government and enterprises, along with the effects of revenue
sharing payments, accounts for $1.25 billion of this added economic value. Revenue sharing
payments to the State and local entities have totaled more than $109 million through the first half
of 2018.

Gun Lake Tribe Statewide Impact Summary: Cumulative FY 2011-2017 Operations ($MMs)
Indirect &
Direct Induced Total
Labor Income $253 $333 $586
Value Added (GDP) $620 $629 $1,249
Output $1,400 $1,085 $2,485
Source: IMPLAN, The Innovation Group

Moreover, through 2017 the Gun Lake Tribe has spent more than $236 million on construction of
the casino and Tribal facilities. This investment has directly contributed over $142 million to
Michigan’s GDP, and on a single-year equivalent basis directly supported 1,439 jobs.

Gun Lake Tribe Statewide Impact from Construction ($MMs)


Indirect &
Direct Induced Total
Employment* 1,439 1,128 2,568
Labor Income $90.87 $53.76 $144.63
Value Added (GDP) $142.95 $89.75 $232.70
Output $234.32 $160.83 $395.15
Source: IMPLAN, The Innovation Group. *Note: Person-year equivalents.

The Innovation Group Project #037-18 October 2018 Page 1


Ongoing Annual Impacts
On an ongoing basis, the Gun Lake Tribe contributes the following direct inputs into the Michigan
economy annually from the operation of the casino, Tribal government and enterprises, and
contributions to economic development and local government. Employee compensation at the
casino averages nearly $35,000.

Gun Lake Tribe Direct Effects ($MMs)


Casino Tribal Economic Local Total
Government Development Mitigation
Funds
Jobs 1,088 121 42 30 1,281
Employee Compensation $37.77 $6.29 $2.26 $1.80 $48.12
Spending on Michigan Goods & Services $19.70 $11.39 $5.02 NA $36.11
Source: Gun Lake Tribe, The Innovation Group. Notes: Statewide Effects. Based on 2017 data.

Given its location between Grand Rapids and Kalamazoo, the Gun Lake Casino has a local impact
covering five counties: Allegan, Barry, Kalamazoo, Kent, and Ottawa. More than half of the
casino’s spending on Michigan goods and services occurs in that five-county area.

Gun Lake is estimated to support approximately 1,250 jobs and to contribute $110 million in Gross
Domestic Product (GDP) annually into the local region in direct effects alone (from 2017
operations). From those direct effects, the Gun Lake Tribe’s contribution ripples out into other
sectors of the economy, leading to an estimated 2,500 total jobs and GDP value of $212 million.

Gun Lake Tribe Local Impact Summary: 2017 Operations ($MMs)


Indirect &
Direct Induced Total
Employment 1,249 1,242 2,491
Labor Income $46.39 $52.94 $99.33
Value Added (GDP) $109.97 $102.21 $212.18
Output $233.92 $173.57 $407.50
Source: IMPLAN, The Innovation Group

The local impacts flow into other counties in the state, leading to a total contribution to Michigan’s
Gross Domestic Product (GDP) of more than $228 million and 2,675 jobs.

Gun Lake Tribe Statewide Impact Summary: 2017 Operations ($MMs)


Indirect &
Direct Induced Total
Employment 1,281 1,394 2,675
Labor Income $48.12 $61.50 $109.62
Value Added (GDP) $112.42 $116.21 $228.62
Output $242.40 $200.41 $442.81
Source: IMPLAN, The Innovation Group

The Innovation Group Project #037-18 October 2018 Page 2


Revenue Sharing
The Gun Lake Tribe makes revenue sharing payments through three primary vehicles: 1) GLIMI,
an economic development partnership between the State and Gun Lake Investments (see below)
that pursues local non-gaming economic development and job creation; 2) Michigan Strategic
Fund (MSF), a State economic development agency; and 3) direct payments to local governments.
Through these three revenue sharing vehicles, the Gun Lake Casino contributed over $15 million
to the local and state economy in 2017. In total since the casino’s opening, the Tribe has
contributed $109 million in revenue sharing.

Gun Lake Casino Revenue Sharing ($MMs)


Cumulative thru 1H
Revenue Sharing Category 2017 2018
GLIMI $2.54 $8.60
Michigan Strategic Fund $8.48 $75.46
Local $3.99 $25.27
Total Statewide Payments $15.01 $109.32
Source: Client provided data

Methodology
Economic impact analyses quantify the benefits from the opening or closure of a business or
industry. Direct impacts are the economic activity that occurs within an industry itself: for
example, the people employed by the Tribal government and at the Gun Lake Casino and its
restaurants, as well as the spending by the Tribe and Casino on supplies and materials. For the Gun
Lake Casino, we have also included slot revenue sharing payments to local governments, the
Michigan Strategic Fund, and GLIMI, a tribally controlled enterprise funding non-gaming
development.

Economic ripple effects were modeled through IMPLAN, a leading supplier of economic impact
data and software used and relied upon by thousands of private developers and government
agencies. Indirect effects reflect the economic spin-off that is made possible by the direct
purchases of the casino and Tribe. Firms providing goods and services to any of the Tribal
operations have incomes partially attributable to the Tribe. Induced impacts result from the
spending of labor income: for example, Gun Lake Casino employees or Tribal government
employees using their income to purchase consumer goods locally.

Economic impacts are expressed in the following categories:

Employment is measured in IMPLAN and by the U.S. Census as headcount, in other words the
number of full and part-time workers supported by an economic activity.

Labor Income is compensation to all workers both employees and owners in terms of wages and
salaries as well as benefits and payroll taxes. Profits from self-employed businesses can also be
included in this category as compensation to the owner. These are known as employment
compensation and proprietor income in IMPLAN.

The Innovation Group Project #037-18 October 2018 Page 3


Value-Added measures the industry or event’s contribution to Gross Domestic Product (GDP). It
consists of labor income (as described above), taxes on production, and other property income
(such as corporate profits, rent payments, and royalties). It is the most appropriate measure of
economic impact because it excludes intermediate inputs, which are the goods and services
(including energy, raw materials, semi-finished goods, and services purchased from all sources)
used in the production process to produce other goods or services rather than for final
consumption. For example, the paper stock used in a magazine publication is an intermediate input
whereas paper stock sold in an office-supply store is the final product sold to the consumer. The
value of producing the magazine’s paper stock is accounted for in measures of GDP within the
Paper Manufacturing sector, not in the Publishing sector.

Output is the total value of industry production; it consists of value-added plus intermediate
expenditures. Output is frequently the total price paid by consumers for a good or service.

The following flow-chart shows how the economic impact model operates.

Direct Spending

Leakages
Direct Economic Benefits Leakages
Economic Output and Value Added
Outside Job Creation
Taxes Spending
Outside the
Geographic
Multiplier Effect Region
(Respending of Initial $)
(National, and State Multipliers) Savings

Labor Goods Services

TOTAL ECONOMIC IMPACT

The Innovation Group Project #037-18 October 2018 Page 4

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