Tribes harness industry experience to enter new markets

A new analysis of the Center for Indian Country Development’s (CICD’s) Native Entity Enterprises Dataset (NEED) finds that tribes with gaming operations and federal contracts tend to own more businesses than those without a footprint in those industries. But despite the importance of gaming and federal contracting to tribal revenue streams, tribes operate a majority of their businesses in other industries.

Tribally owned businesses boost tribal economies and contribute to local and regional economies across the United States. They foster economic development in their communities, offer employment opportunities, and provide revenue streams to help tribal governments fund public services. And in past analysis of the NEED, CICD has found that many tribes’ business portfolios are varied.

Our new NEED analysis examines gaming and federal contracting—two common tribal economic development strategies—and provides further insight into the types of industries and nature of markets that tribes operate in more broadly. In operating businesses across different industries, tribes may enhance their economic resilience by reducing the risk of sector-specific shocks to their communities.

CICD created the NEED to help address long-standing economic data gaps in Indian Country. Although the NEED is likely an undercount of tribally owned businesses across the United States, we believe it to be the most comprehensive dataset of tribally owned businesses to date. This new analysis of the NEED, and all of our work, supports CICD’s mission to advance the economic self-determination and prosperity of Native nations and Indigenous communities through actionable data and research that inform public policy discussions.

Exploring gaming, federal contracting, and diversification

Tribes operate more businesses in the leisure and hospitality sector, which includes gaming, than in any other sector. Many tribes have gaming compacts with states, enabling them to operate Class III casinos (casinos that offer table games and slot machines, for example) and other gaming enterprises. Tribes can also operate Class II casinos (casinos that offer bingo, for example) without a compact.¹ Gaming revenue for tribes has increased substantially over the past two decades, growing from $22.6 billion in fiscal year 2005 to $43.9 billion in fiscal year 2024, not accounting for inflation.

Since the late 1990s, many tribes have also entered the federal contracting sphere. Federal contracting refers to the provision of services to the federal government through contracts and, as such, spans a variety of industries. Previous CICD analysis found that from 1988 to 2021, federal contracting revenue for tribes grew even faster than revenue from gaming. During that period, the average annual growth rate of federal contracting revenue was 41.6 percent, compared to 16.8 percent for gaming revenue.

To provide additional insights into tribes’ experiences with gaming and federal contracting—and diversification beyond those industries—we used the NEED to categorize federally recognized tribes by their involvement in each. We identified tribal businesses in many major industries, including leisure and hospitality; education and health services; professional and business services; and trade, transportation, and utilities.

Outside of gaming and federal contracting, tribes operate in many industries

According to the NEED, there were 4,096 active businesses owned by federally recognized tribes in 2021, spread across 330 tribes. As shown in Figure 1, nearly half (45.5 percent) of these tribes participated in both gaming and federal contracting, and most tribes with businesses (82.4 percent) participated in at least one of the two. Tribes that participated in both gaming and federal contracting own a majority (75.2 percent) of the tribally owned businesses that were active in 2021. Conversely, tribes with neither federal contracting nor gaming operate only 4.0 percent of all identified businesses. In other words, tribes with gaming or federal contracting tend to own more businesses than those without gaming or federal contracting.

Despite the prevalence of gaming and federal contracting among tribes with businesses, a majority of businesses owned by tribes are in other industries. Among the 4,096 active businesses owned by federally recognized tribes in 2021, 69.7 percent were in industries other than gaming or federal contracting. In other words, tribes commonly use gaming and federal contracting as primary economic development strategies, but tribes also operate businesses in an array of other industries.

Tribes with gaming or federal contracting have more-diversified businesses

To explore business diversification in the context of gaming and federal contracting, we examined how each tribe’s sales were spread across the industries in which it operated. Using six-digit NAICS (North American Industry Classification System) codes, we focused on the most specific industry categories available, building on previous NEED research that provided a higher-level view. The earlier research used two-digit NAICS codes that group industries into broader categories known as supersectors. For example, our current work isolated the casino industry, which in our earlier work fell within the leisure and hospitality supersector.

In 2021, federally recognized tribes operated businesses in 425 industries, according to the NEED.² Figure 2 uses a concentration index to depict the extent to which their 2021 sales were distributed across industries outside gaming and federal contracting. Tribes are considered less concentrated—meaning they have businesses spread across more industries—the closer they are to the “0” value on the index. Tribes are considered more concentrated—meaning they have businesses in fewer categories—the closer they are to the “1” value on the index.

As shown, tribes with both gaming and federal contracting businesses had the least concentration in their other business holdings. That is, these tribes were more diversified in their non-gaming and non-federal-contracting businesses. This greater diversification could reflect these tribes’ ability to invest their gaming and federal contracting revenues into other businesses. Past CICD work has provided examples of tribes and other Native entities leveraging revenue from gaming or federal contracting to grow and diversify their enterprise portfolios.

Tribes with neither gaming nor federal contracting businesses were the most concentrated, meaning they had less diversification among their other business holdings. This likely reflects the smaller number of businesses operated by these tribes overall.

Tribes operate businesses in less-concentrated markets

Despite incentives to diversify, tribes may face challenges in entering competitive markets. In addition to exploring the extent to which tribally owned businesses were concentrated in certain industries, we explored market concentration within those industries. This helped answer the question, Are tribes generally entering industries in which a variety of businesses thrive, or highly concentrated industries dominated by a smaller number of firms?

Figure 3 depicts the market concentration of industries in which tribally owned enterprises operate, compared to industries without such enterprises, based on businesses documented in the NEED. Market share is the percentage of overall industry sales accounted for by the top 50 firms. A concentration index is used to illustrate the level of market dominance among the top players. Values below 0.1 indicate an industry is unconcentrated, values between 0.1 and 0.18 indicate moderate concentration, and values above 0.18 indicate high concentration.

Industries with tribally owned businesses had a median of 54.8 percent of their sales, or market share, going to the top 50 businesses, compared to a median market share of 81.9 percent for industries without tribally owned businesses. Just under half (42.1 percent) of industries with tribally owned businesses had concentrated sales among those top players, compared to 45.8 percent of industries without tribally owned businesses. In other words, tribes tended to operate in industries less dominated by the top 50 businesses and whose sales, even among those top 50 businesses, were more evenly distributed.

With less-concentrated markets, these industries might present more opportunities for businesses to enter and profit. Over time, establishing business portfolios in more-accessible industries might also enable tribes to gain the market experience needed to enter more-competitive industries. Programs such as the U.S. Small Business Administration 8(a) Business Development program were designed to provide training and technical assistance to help experienced small business owners who are socially and economically disadvantaged compete in the economy.

Continuing to diversify business portfolios

Economic diversification can help tribes brace against economic shocks and identify additional revenue streams. Tribes have made substantial inroads in federal contracting and gaming but also operate enterprises in many different industries. By investing in gaming and federal contracting, tribes have gained experience in many sectors that can be leveraged to enter new industries, including those that complement their existing businesses.

Individual tribes also have their own distinctive advantages based on their populations, locations, and other attributes, which may affect the industries in which they would most succeed. Further research into location-based advantages could help tribal leaders consider which business ventures might be most fruitful for their communities.

Appendix: About the data

The NEED reflects businesses owned by federally recognized tribes in the lower 48 states. The dataset was primarily assembled from mid-2021 to mid-2023. In this latest analysis of NEED data, we use an updated version of the dataset (v2025Q4, last updated on December 17, 2025) that focuses on businesses in operation in 2021 based on sales data in the 2022 National Establishment Time Series (NETS), a subscription data source. Notably, sales information available in NETS has often been imputed—that is, subjected to a statistical process that estimates missing data points—by the data vendor using a non-public methodology rather than measured directly. Previous Federal Reserve work has documented important caveats for researchers—particularly in analyses of change over time—of other types of NETS imputation. To lessen the impact of potential sales-data-quality issues, our analysis is static and relies on ratios rather than absolute amounts.

For purposes of this analysis, tribes with federal contracting businesses were defined as tribes that owned a business that received a federal contract. To link tribal businesses with federal contracts, we cross-referenced businesses in the NEED with federal contracts in USAspending.gov. Gaming tribes were defined as those that owned businesses containing a NAICS industry code starting with 7132 (i.e., “gambling industries”) or 72112 (i.e., “casino hotels”).

When working with NAICS codes, we used six-digit national industry codes.

To explore industry diversification and market concentration, we used the Herfindahl-Hirschman Index (HHI). While the HHI is typically used to look at market concentration, we also used it to examine the concentration of tribally owned businesses in each industry. We defined a tribe’s HHI as the sum of the squares of the share of total tribal business revenue in each industry. Gaming and federal contracting businesses were excluded from the tribes’ HHI scores to provide a measure of business concentration in industries outside these sectors.

Based on our industry concentration index, if tribes were perfectly unconcentrated in their industries, then roughly 0.2 percent of their total enterprise revenue would be in each industry in which they operate, and their associated cross-industry score on the concentration index would equal 0.002. If tribes owned businesses in a single industry, then 100 percent of their enterprise revenue would be concentrated in that industry, and their associated concentration index score would equal 1.0. On our market concentration index, a value of 1.0 indicates dominance by a single firm, and a value of 0 indicates that sales are spread evenly among the top 50 firms. In the context of our analysis, data from the 2022 U.S. Census Bureau Economic Census were reweighted from a range of 0 to 10,000 to a range of 0 to 1.

Endnotes

1 Tribes can also engage in Class I gambling (that is, social games played for prizes of minimal value) without a compact.

2 We omitted the “public administration” industry code (NAICS code 92) to exclude government functions.