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Bits and Pieces from Indian Country - January 2005

2 May 2005

After just one year as head of the Bureau of Indian Affairs, fondly known as the BIA, Dave Anderson is resigning. He is going back to being Famous Dave, America's best cook (his words), and an Indian business man, trying to offer a positive role model and business opportunities. As one of the founders of Grand Casinos, it is not likely the BIA will ever have anyone that understood Indian country and Indian gaming as well as Dave Anderson.

Dave Anderson is resigning as head of the Bureau of Indian Affairs after just one year in the job, saying he can do more to help American Indians by working in the private sector. Anderson earlier removed himself from decisions on tribal recognition and Indian gambling to avoid the appearance of any conflict of interest, because of his past work in the gambling industry. "I have concluded that I can have the greatest impact to improve the future of Indian country not by managing the day-to-day operations of BIA programs, but by focusing my time on developing private sector economic opportunities for Indian entrepreneurs," he wrote in a letter to Interior Secretary Gale Norton that was released Monday. Frederic J. Frommer, Associated Press, Duluth News-Tribune, 1-31-05

Harvard released a study that draws a very interesting conclusion; Indian gaming has not made much difference to the economic situation of individual tribal members. It also pointed out that tribal members were significantly behind the general population. Watching some of the more successful tribes diversify and invest gaming profits, one has to wonder if the results will be the same in anther five or ten years? What will be the impact in Indian country of the continued investment of the profits of Mohegan, Oneida, Seminole and others?

American Indians made significant economic gains during the 1990s, with per capita income rising about 30 percent for gaming and non-gaming tribes alike, but still struggled compared with the overall population, according to a Harvard University study released Wednesday. Although tribes with gambling operations had generally higher incomes and lower unemployment, gaming did not play as significant a factor in economic gains as researchers had expected when comparing census data from 1990 and 2000. …Non-gaming reservations saw an increase of 30 percent in real per capita income, from $5,678 to $7,365. Gaming area incomes rose 36 percent, from $6,242 to $8,466. The unemployment rate dropped from 25 percent to 22 percent in non-gaming areas, and from 19 percent to 15 percent in gaming areas. Nationally, the unemployment rate dropped from 5.6 percent in 1990 to 4 percent in 2000. Associated Press, New York Times, 1-6-05

Those gains don't come without a fight. California is again proving to be a typical battleground. The Lytton Band of Pomo Indians are the focal point of much of the debate. The tribe was recognized and given land in San Pablo, a suburb of San Francisco and Oakland, in a rider to a congressional spending bill in 2000. Recently Governor Arnold Schwarzenegger negotiated a compact granting the tribe as many as 5000 slot machines in exchange for a 25 percent revenue sharing agreement. The governor hoped to use the compact as a model to get other tribes to the table. It didn't work. The major tribes did not roll over and send in their checks, and the California Legislature didn't like the idea either, nor did many others.

Senator Dianne Fienstein has promised to try and reverse the recognition legislation. A group of counties is getting together to fight for their interests. Some other tribes have joined the opposition to the casino that would be in an urban area. A group has been formed to introduce a ballot initiative, Californians' favorite way to create law, and finally a new non-Indian gaming initiative is also being floated. In the last election cycle, $150 million was spent for and against the three gaming initiatives then on the ballot.

Battle lines are being drawn for an epic fight over a move to establish an Indian casino deep in urban California, far from traditional rural reservations. The influential Pechanga band of Temecula this week has joined Sen. Dianne Feinstein, D-Calif., in a last-ditch effort to block a casino in the San Francisco suburb of San Pablo. Pechanga is the latest tribe to raise objections to the casino, signaling a major tribal split over the project and making approval for the project even more difficult to get from an already skeptical Legislature. …Pechanga is questioning the fairness of allowing the Lytton tribe of Sonoma County to build a casino on recently acquired prime, urban real estate. Casinos in densely populated areas would be likely to draw gamblers away from established Indian casinos in the backcountry. James P. Sweeney, Copley News Service, San Diego Union-Tribune, 1-26-05

Sonoma County is teaming up with three other Northern California counties to create an unprecedented coalition aimed at restricting the development of Indian casinos. The agreement between Sonoma, Napa, Solano and Yolo counties will likely be copied in other areas, said Cheryl Schmit, director of Stand Up for California, a gambling watchdog group based in Placer County. …"This is the first one to do so on tribal gaming issues -- it is very cutting edge," she said. "By grouping together, they are going to conserve their resources and can approach many of these issues in a more uniform manner. They are going to have clout." Kerry Benefield, Press Democrat, 1-26-05

Opponents of urban Indian casinos….are pushing for a ballot initiative that would try to bar the Legislature from approving tribal gaming halls near population centers. Proponents of the "The No Urban Casino Act" have filed paperwork with the Attorney General's office …The proposed initiative seeks to stop legislative approval of tribal casinos within 15 miles of an urban area as defined by the 2000 census. It would apply to any Indian tribe that did not have a ratified gaming agreement by Jan. 1, 2005. Kate Folmar, Contra Costa Times, 2-1-05

A man…wants to create a gambling utopia of sorts in San Bernardino County, where "facial-recognition software" would track a gambler's every move and casino proceeds would be earmarked for everything from teachers' salaries to helping slaves' descendents. …David K. Johnson, who listed his group as "Prosperity for All," could be cleared to begin collecting signatures in February to get it on the ballot. Jim Miller/ Michelle DeArmond, Inland Southern California Press-Enterprise, 1-31-05

Class II games continue to be an issue. Can they be used to avoid tribal-state limits on the number of games allowed, or to avoid revenue sharing agreements? In Florida and Oklahoma, tribes have successfully used Class II games to build casinos without a Class III compact. In other states it appears to be a promising tactic, both to circumvent limits and revenue sharing. However, this month governors in California and New Mexico won a battle of nerves with three different tribes. All three tribes agreed to pull out the Class II games. In California that amounted to thousands of games pulled off the floor. The real loser, at least in the short-term, is Multimedia, the major game provider in that market and the one most willing to put their games into locations where the legality of the games is still being debated. This is a long ways from being the end of the debate, but for the present the governors seem to be winning.

Indian casinos that challenged the state by using thousands of legally questionable gaming devices have agreed to remove or modify all of the machines. The Morongo Band of Mission Indians in Riverside County promised to make the changes… James P. Sweeney, Copley News Service, San Diego Union-Tribune, 1-4-05

Just hours before a deadline set by the state, a second prominent California Indian tribe announced yesterday that it will unplug hundreds of gaming devices that mimic slot machines. The move by the Pechanga band of Temecula follows a similar decision by the Morongo band of east Riverside County and averts for now a legal battle that could have greatly influenced the pace of gambling expansion in the state. James P. Sweeney, Copley News Service, San Diego Union-Tribune, 1-8-05

Electronic bingo machines, which look and play like slot machines but don't pay dividends to the state, won't be installed on the floor of San Juan Pueblo's casino under an agreement announced Thursday by the state and pueblo governors. The agreement means the state has escaped— at least for now— a potential threat to some of the tens of millions of dollars it gets in revenue-sharing from slot machine players' losses each year. Gov. Bill Richardson had asked the pueblo not to use the 26 electronic machines it imported from a South Carolina company at its Ohkay Casino because the machines are not covered by the revenue-sharing agreements between the state and New Mexico tribes with casinos. - Leslie Linthicum, Albuquerque Journal, 1-21-05

In Florida the Miccosukee Tribe of Indians thinks the whole Class II issue has become a non-issue with the passage of legislation that allows two Florida counties to vote on slot machines. Broward and Miami-Dade counties are going to vote on March 8th. If the referendums pass, there will be slot machines at tracks in Florida, and of course in Indian casinos everywhere in the state.

As Broward and Miami-Dade counties prepare to vote on adding slot machines at local pari-mutuel venues, the Miccosukee Tribe of Indians is convinced Florida voters have already given them the green light for Las Vegas-style slots. In a letter to Gov. Jeb Bush, the tribe argues that passage of Amendment 4 by voters last Nov. 2 radically changed state policy on gaming, and the Indians are hoping to kick-start negotiations that would allow them to install slot machines no matter what the outcome of the local referendums scheduled for March 8. Indian casinos currently have electronic gaming machines that are bingo-style and dispense tickets, rather than cash. The more popular Las Vegas-style slot machines that dispense cash are the type of machines South Florida pari-mutuels hope to install if voters approve. Linda Kleindienst/ Sarah Talalay South Florida Sun-Sentinel, 1-27-05

While Californians fight to keep casinos out of urban areas, mayors around the country are thinking it is a good plan to have a casino downtown. In Wisconsin, New York and Illinois, in addition to California and Minnesota, tribes and cities are talking. The governor of Minnesota, like the governor of California before him, is trying to use the prize of an urban casino to get more out of all the tribes in the state or at least get a larger piece of the pie from the downtown casino. This is an issue that will not be settled in any backroom, especially in California. It will be fought out very publicly with millions of dollars spent by both sides. New York is heating up, the governor is again suggesting five Indian casinos in the Catskills; Ohio and Nebraska have tribes courting; Class III games are going into Oklahoma and probably Florida. 2005 looks to be a big year for Indian gaming as it will be for conventional gaming. The big difference for those of us sitting on the sidelines is that it is harder to buy into the action in Indian country. You can buy slot machine stock and stock in management companies, but tribes aren't selling stock. Too bad, some of them are a sure bet for 2005.


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.