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Best of Ken Adams

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Bits and Pieces from Indian Country - April 2008

1 May 2008

Las Vegas, with the aid of the IRS and FBI, is struggling to get a grip on nightclubs. The clubs seem to have created a world of their own. The atmosphere and the activities are edgy, pushing the limits of age, alcohol and drugs to match the edginess of the décor and entertainment. The clubs are apparently pushing the edges of the law and public standards in some other ways as well, condoning bribing in the guise of tipping. It seems that there are two rules: really hot girls get in fast and free; and everyone else has to pay – and pay every person in a long chain of eager tip takers – to get in the door, find a table, get something to drink and, one suspects, get the opportunity to meet some of those hot girls.

Indian gaming, while sometimes mirroring the broader industry, is characterized by different values – tribal values. These differ from tribe to tribe, but moral values surface in Indian gaming more frequently than in the broader industry. In casinos in general, one strictly follows the laws and regulations, but usually not some local moral value not enacted as law. In Indian gaming, tribal mores can be as significant as codified procedures and controls. Here, Pechanga and Meskwaki are both looking at alcohol as a moral issue as much as they are a legal issue. Pechanga closed a nightclub and Meskwaki has yet to authorize the sale of alcohol at its casino, even if it is the only casino in the state with it. The story is doubly interesting – the vote on alcohol was postponed so tribal members could attend a funeral. Hard to image either story from the Strip, isn't it?

The Pechanga Resort & Casino has closed two nightclubs because of alcohol-related problems. The Eagle's Nest and the Silk club, a popular attraction that featured go-go dancers, were shut down last week because of unspecified alcohol issues. "Tribal leaders have determined that an unacceptable number of incidents involving alcohol consumption have occurred at Pechanga Resort & Casino," said Amy Minniear, president of the Pechanga Development Corp., in a statement. "We are deeply troubled by these incidents and are taking numerous and decisive actions to prevent them from occurring in the future."…The casino pays for three or four officers to work there on weekend nights, he said. The officers' focus usually was on the Silk nightclub, which attracted up to 3,000 guests each night, Williams said. (Michelle DeArmond, Press-Enterprise, 3-26-08)

The Meskwaki Bingo-Casino-Hotel is the only gaming facility in Iowa that does not allow alcohol. Proponents advocating the change say growing competition from 19 other casinos in Iowa have cut into the tribe's revenues. A referendum asking members of the Sac and Fox Tribe of the Mississippi in Iowa to allow the sale of alcohol in the Meskwaki Bingo-Casino-Hotel has been postponed. Tribal officials delayed the vote because of the death of a Meskwaki tribal member who worked for Indian Health Services, a federal agency. Meskwaki tradition calls for four days of mourning. The person was buried Monday, which marked the beginning of that period, officials said in a statement to enrolled tribal members. The vote will be the second for tribal members on the question of whether to allow alcohol sales in the casino. A proposal last year failed, 166 to 143. (Cedar Falls Courier, 3-26-08)

There is another side to tribal business that is not in common with other casinos – the impact of tribal members' personal needs, beliefs and desires. A small struggling casino in Wisconsin is under siege, or at least tribal offices are, because of the casino and other investments. The tribe, Lac du Flambeau, is in a remote location and has struggled to find a successful way to use gaming to improve the fortunes of the tribe and its members. Now some of the members think their financial problems are due to more than their location and questionable investments. They believe the tribe's problems are driven by greed and corruption, and have taken over the tribal headquarters and demanded a federal investigation – which has since been promised.

A group of about 10 disaffected Lac du Flambeau tribal members stormed the tribe's government administration offices around 3 a.m. Wednesday in an attempted coup after previous demands for a new government had been ignored. Officers from several area law enforcement agencies have converged on the scene, and police with guns and riot gear were inside the building, although there have been no reports of violence. Gov. Jim Doyle and state Attorney General JB Van Hollen have been notified of the coup attempt, and representatives of the federal Bureau of Indian Affairs, the FBI and the American Indian Movement (AIM) are said to be en route. "Right now we are holed up in a Tribal Center room basically trying to get help to end the mismanagement, nepotism and corruption that exists within our Tribal Council," said tribal member Brandon Thoms, speaking from a cell phone inside the building. "We've exhausted all efforts. We've called the BIA, the FBI, and the IRS and also the NIGC (National Indian Gaming Commission) and our pleas have fallen on deaf ears. This is the last thing we could do to bring attention to what's happening here." The tribe has been hit hard by a series of bad business investments which anxious tribal members say could take years to correct. Those include three multi-million-dollar off-reservation casino projects. (Ana Davis, Wisconsin State Journal, 3-26-08)

California is leading the way in Indian gaming in the way Connecticut used to be the leader. Connecticut has entered the "real world" and is suffering from the same pressures and problems as any gaming jurisdiction – the economy and competition. California has a large enough population and currently lacks new or emerging external competition. So the latest opportunity to expand in California is being met with expansion. There is a limit and a point of saturation, but it is clear that most tribes in California have not reached that point yet.

Californians voted in early February to let four Southern California Indian casinos add a combined total of 17,000 slot machines in exchange for sharing some of the revenue with the state. Each of the tribes was allowed to operate 2,000 slot machines under the previous agreements. An additional tribe, the San Manuel Band of Mission Indians, received permission earlier this year to add 5,500 new slot machines but did not have to get voter approval. The tribe already is advertising that it has 3,500 machines in place -- up from 2,000. The Morongo Casino Resort & Spa is operating 2,910 machines in its main casino and an additional 40 Las Vegas-style slot machines in the building that housed the former Casino Morongo, said Patrick Dorinson, a public-relations consultant for the tribe. Morongo operates its casino near Cabazon. The tribe may add 500 more slot machines in the next few months, Dorinson said. The Pechanga Resort & Casino near Temecula previously operated the maximum number of machines -- 2,000 -- and additional video-bingo machines that were similar to slot machines. The casino has 1,300 new slot machines in place and is converting about 500 video bingo machines to slot machines, said Amy Minniear, president of the Pechanga Development Corp.(Michelle Dearmond, Press-Enterprise, 3-28-08)

It used to be just a casino, but Agua Caliente can soon add "resort" and "spa" to its title. In April, the $300 million hotel addition to the Agua Caliente Casino will finally open after two years of construction. In the meantime, the tribe wants to get the word out to the public. That's where celebrity pitchman and Dancing with the Stars winner John O'Hurley comes in. O'Hurley, a mainstay in past Spa Resort and Agua Caliente commercials, says the fun never stops in the commercial shooting, especially with the new expansion. The new Agua Caliente will have a 10,000 square foot full service spa, new restaurants and clubs, hundreds of new slots and a 16 story, 340 room hotel. The grand opening is set for April 18. (Jason Sloss, News Channel 3, 3-28-08)

The Thunder Valley Resort Casino near Sacramento, just off Interstate 80 on the way to Reno and Lake Tahoe, plans to add a 23-story, five-star hotel plus a nine-story parking garage and a 3,000-seat theater. But the plans don't stop there. The United Auburn Indian resort will also expand its casino floor to 450,000 square feet, add two 30,000-square-foot ballrooms plus a spa, pool and other amenities. The theater will be developed by Montreal-based Cino Plus, the same design firm behind Cirque du Soleil theaters. The hotel tower will compare with the Ritz-Carlton and Four Seasons, General Manager Scott Garawitz said. Several of the suites will be more than 2,500 square feet, rivaling those given to the highest of high rollers in Las Vegas. Although a Thunder Valley spokesman would not say how much the expansion would cost, Reno and Las Vegas gaming experts said the expansion could cost up to $900 million and no less than $400 million or $500 million. (Ray Hagar, Reno Gazette-Journal, 3-28-08)

Some tribes in California, just like many tribes around the country, are located in the middle of the action and an urban population of millions and millions of people. Tribes in more remote locations in California struggle with the same issues as remote tribes in other states – there are simply not enough customers. In Wyoming you might dream of customers driving hundreds of miles to play a slot machine, but that is hardly realistic in California. Oh, wait, that is what casinos in Reno have been hoping for, isn't it?

The financially troubled Santa Ysabel tribe near Julian has hired an experienced gaming manager as its new chief operating officer to run its casino overlooking Lake Henshaw. Don Trimble said he started working at the casino last week and has already started to make changes aimed at improving food service and marketing. In recent months, the tribe fell behind on quarterly payments to the state and the county. Casino officials blamed the problems in part on the October wildfires, which forced the casino to close for a week, and heavy winter storms that led to road closures. There were other problems, Trimble said, such as the perception that the casino is too far from urban centers…In 2004, the tribe hired Majestic Gaming, an upstart Arizona firm, to develop and run the casino. Though the firm was new, its three core executives had worked together for 12 years developing and managing casino properties, officials said at the time. Trimble said those three no longer work for the casino but declined to talk further about their departure… Because of the reservation's remote location, tribal leaders said they decided to keep the casino small. It has only 349 slot machines while most other North County tribal casinos have about five times that amount. Last month, tribal officials acknowledged the casino had failed to generate enough money to cover payments promised in a 2005 agreement with the county for off-reservation impacts. (Edward Sifuentes, North County Times, 3-27-08)

With the opening of a $30 million casino this spring, the Northern Arapaho Tribe is betting that its earlier ventures into Las Vegas-style gambling have whet Wyoming's appetite for more high-stakes slot machines and card games...The Wind River Indian Reservation is already home to three casinos, two belonging to the Northern Arapaho and one belonging to the Eastern Shoshone. The new casino will be called Wind River Casino, while the current casino with the same name will become the 789 Smoke Shop and Casino…About 350 to 400 people are playing slot machines on an average Friday or Saturday afternoon… Conrad said 30 to 40 percent of the casino's customers travel more than two hours to get to the central Wyoming casino. (Matt Joyce, Associated Press, Casper Star-Tribune, 3-29-08)

Yet, there are still tribes in the queue waiting to get an opportunity at the golden gambling goose. Tribes without casinos in 2008, twenty years after the National Indian Gaming Regulatory Act passed in 1988, are very likely to be ones in more remote locations that failed to generate the interest of investors and operators up to this point. These latecomer casinos are likely to find themselves on very edge of survival also.

On March 18, 2008, the U.S. Department of the Interior, Bureau of Indian Affairs accepted the Elk Valley Rancheria, California's Martin Ranch property in trust for gaming purposes. The 203.5 acre parcel will be the site of the Elk Valley Resort and Casino…Chairman Dale Miller stated: "We survived termination and exceeded the expectations of many nay-sayers. We are an integral part of the community and we look forward to continued success and cooperation with the community." "We are excited about our economic future. We successfully completed a process that took nearly seven years. We satisfied the most rigorous environmental review and various changes in federal policy."… The Elk Valley Rancheria, California was terminated in 1962, was restored to recognition through federal court litigation, and formally reorganized in 1994 pursuant to a written Tribal Constitution approved by the U.S. Secretary of the Interior. (Tribal press release, 3-18-08)

The mainstream media treats Indian gaming, indeed gaming in general, as if every operation and every tribe were the same; they are not. Some tribes, like the Seminole in Florida, the Mashantucket Pequot in Connecticut or the tribes around major cities in California, have been very, very successful because of their proximity to major population centers. But others like the ones in Wyoming, upper Michigan and other remote locations struggle with casinos as they have struggled with other commercial ventures because they don't have enough customers. And, as significantly, there are casinos with every amenity known to gaming and others that for cultural reasons shun many of those amenities because they just don't fit into the tribe's life-view. Twenty years into Indian gaming, one thing is certain: every state and every tribe is different – but all are subject to the same forces that other casinos face: the economy, regulation and competition.

But now, that is simply my opinion, isn't it?

Ken

Ken Adams

Ken Adams is the principal in the gaming consulting firm, Ken Adams and Associates. Formed in 1990, Ken Adams and Associates specializes in information, analysis, and strategic planning for Indian tribes, casino operations and gaming manufacturers.

Ken spent over 20 years in the hotel-casino industry, prior to founding Ken Adams and Associates. He held the positions of: Director of Casino Operations, Casino Manager, and Keno Department Manager. During this time, he developed numerous innovative marketing and customer development programs and systems for evaluating casino performance. Some of those programs, such as slot clubs and tournaments, have become industry standards.

Ken is also actively involved in gathering and disseminating information that is important to the gaming industry. He is editor and publisher of and the Adams' Report, a monthly newsletter specializing in identifying trends in casino gaming, regulation and manufacturing, the Adams Daily Report, an electronic newsletter that provides electronic links to the key gaming stories of the day, and the Adams Review, a special report distributed by Compton Dancer Consulting that provides editorial commentary on gaming trends.
Ken Adams
Ken Adams is the principal in the gaming consulting firm, Ken Adams and Associates. Formed in 1990, Ken Adams and Associates specializes in information, analysis, and strategic planning for Indian tribes, casino operations and gaming manufacturers.

Ken spent over 20 years in the hotel-casino industry, prior to founding Ken Adams and Associates. He held the positions of: Director of Casino Operations, Casino Manager, and Keno Department Manager. During this time, he developed numerous innovative marketing and customer development programs and systems for evaluating casino performance. Some of those programs, such as slot clubs and tournaments, have become industry standards.

Ken is also actively involved in gathering and disseminating information that is important to the gaming industry. He is editor and publisher of and the Adams' Report, a monthly newsletter specializing in identifying trends in casino gaming, regulation and manufacturing, the Adams Daily Report, an electronic newsletter that provides electronic links to the key gaming stories of the day, and the Adams Review, a special report distributed by Compton Dancer Consulting that provides editorial commentary on gaming trends.