Tax-Free Program Could Increase Impact Of Tribal Gaming Revenues

Written By Derek Helling on September 30, 2022
tribal gaming revenues tax free genwell

Tribal casinos have always been a way for Indigenous Peoples Groups in the United States to support their members. One of those groups is embarking on a new program that will make tribal gaming revenues even more beneficial for its populace.

A 2014 federal law gives members of such tribes the ability to receive payments from gaming authorities without including those payments on federal income tax reports. The payments must satisfy certain parameters to qualify, however.

New method of distributing tribal gaming revenues

According to Holly Kays of Smoky Mountain News, the group initiating a new program for gaming revenue payments is the Eastern Band of Cherokee Indians. The Cherokee Gaming Commission oversees the operations at two casinos in North Carolina, another in Indiana, and one in Virginia as well.

Kays reports that a new program called GenWell was presented at a recent meeting of the Eastern Band’s tribal council. The program employs tenets of the Tribal General Welfare Exclusion Act of 2014.

That federal statute allows members of Indigenous Peoples Groups to receive payments from governing bodies and exclude that cash from their annual tax filings. The act does impose restrictions on both the distribution and use of those funds, however.

Restrictions on tax-free payments

According to the act’s text, the payments must be available to all eligible members of a tribe. Additionally, the disbursements cannot be payments for goods or services provided. Recipients of the payments can only use them to promote their health and wellness.

That’s a potentially broad brush to paint with, though. The money could potentially cover expenses from medical bills to mortgages or even automobile loan installments. Kays says members of the Eastern Band of Cherokee Indians who enroll in the program could expect monthly payments of at least $800, with semiannual overages based on how much revenue the casinos take in.

Thus, each eligible member of the tribe stands to gain thousands of dollars each year in tax-free money from this program. The tribal council still needs to finalize parts of GenWell, but members of the ECBI are already benefitting from gaming revenues.

General benefits of tribal gaming

According to the ECBI government website, members of the tribe currently get per capita payments on a monthly basis. Eligible members start receiving those payments automatically when they turn 18 years of age. While those are taxable funds, those payments don’t come with the same types of usage restrictions.

However, members’ per capita payments through their 18th birthdays are also stored in a trust fund. Another benefit that the ECBI provides to its members includes assistance with higher education. While Kays states the tribal council could give members a choice between per capita and GenWell payments at first, the council might convert all disbursements to the GenWell program in the future.

That could provide members of the ECBI with a way to improve their quality of life even more and become greater stakeholders in the success of the tribes’ gaming operations.

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Derek Helling

Derek Helling is a lead writer for PlayUSA. Helling focuses on breaking news, including legislation and litigation in the gaming industry. He enjoys reading hundreds of pages of a gambling bill or lawsuit for his audience. Helling completed his journalism degree at the University of Iowa.

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