In Arizona and New Mexico, more than 1,100 workers at Navajo Nation-operated casinos were temporarily laid off on New Year’s Day due to prolonged closures caused by the ongoing coronavirus pandemic.
The decision was announced on Thursday night by the federally recognized tribe’s business arm, Navajo Nation Gaming Enterprise, saying that the lack of revenue caused by the casino closures left it with no choice other than to go forward with the layoffs.
“Due to the extended closure, since March 17, 2020, our business operations have been severely impacted and as a result, we must make very difficult financial and personnel decisions,” Brian Parrish, the tribal casino operation’s interim CEO, said in a statement.
The tribe operates four casinos in Arizona and New Mexico and together they employ more than 1,200 people, including more than 775 tribal members. The Gaming Enterprise plans to keep 165 employees on the payroll to ensure essential functions are maintained at the casinos.
Officials had repeatedly warned that layoffs would become necessary if the casinos weren’t allowed to reopen at least with limited capacity.
But officials also warned Thursday that permanent closure of the entire operation is possible by the end of January if casinos are not allowed to reopen or if more funding isn’t allocated to keep the operation running. The tribe allocated nearly $25 million in federal virus relief funding to the casino operation in August but that money has run out.
The tribe invested $460 million in the casinos and that would be lost if they closed. Closure also would lead to ongoing yearly losses of about $220 million in revenue and economic activity, Parrish said. He said he believes it’s possible to safely reopen with reduced capacity even amid the pandemic.
“The Nation’s vision took years to build, but the Nation has been successful,” Navajo Gaming Board Chairman Quincy Natay said. “If it allows its gaming industry to fail, a permanent closure will cause a long-term setback for Navajo economic development, even if it eventually reopens.”
The Navajo Nation spans parts of Arizona, New Mexico and Utah.