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Bits & Pieces from Indian Country - July 2007

15 September 2007

Indian gaming is becoming much more of a mainstream news story all of the time. In Florida, Connecticut and California, Indian gaming news is front-page material. The reason is simple: Indian gaming is big business. In Connecticut a report released recently calls Indian gaming "crucial" to the state's economy, accounting for 13 percent of job growth for the last 15 years. California's Indian gaming is even bigger, although a smaller percentage of the state's total economy. It led all states by a wide margin, with more than $7.7 billion in revenues last year, and it accounts for more than 30 percent of the total Indian gaming revenue.

Connecticut's two Indian casinos have played a vital role in the state's economy, creating thousands of jobs and pumping billions into state coffers since they opened more than a decade ago…Mohegan Sun and Foxwoods Resort Casino combined have hired more than 20,000 employees and paid $4.2 billion to the state from slot revenue since they opened in 1996 and 1992 respectively…Expansions by both casinos will add nearly 3,500 jobs…casinos are now among the largest employers in the state and account for about 13 percent of job growth in Connecticut since 1992, Blodgett said. (Associated Press, Hartford Courant, 6-15-07)

Phil Hogen, Chairman of the National Indian Gaming Commission (NIGC), announced today during the United South and Eastern Tribes (USET) semi-annual meeting that net revenues from Indian gaming grew more than 11% from 2005 to 2006, generating $25.1 billion in gaming revenues in 2006. "The continued growth is eye-opening considering the tribal gaming industry is still relatively young. The Indian gaming industry has doubled between 2001 and 2006, going from $12.8 billion to $25.1 billion respectively," Hogen said. "In NIGC Region II, which includes California and Northern Nevada, the revenues have jumped from $1.7 billion in 2001 to $7.1 billion in 2006, which is an increase of four and a half times over a 5 year period." (Press Release, 6-4-07)

The size of the revenues from Indian gaming explains, at least in part, the reason for the acrimonious debate that often accompanies Indian gaming. In California the main opponent to the approval of the new compacts is organized labor – not because labor opposes gaming, but quite the opposite: it is because they want their share. The legislators who oppose the compacts for other reasons also do not oppose gaming; they simply want a greater share for their constituents. There may be some hidden opponents funding, at least in part, the efforts to derail the compacts, and they are simply trying to protect their existing businesses. Card rooms, racetracks and Nevada casino operators might be in that category. Certainly Nevada operators did come up with millions of dollars to oppose the original enabling legislation in California. And of course the supporters, such as the governor, also want to get a larger share of that money.

In the meantime, the tribes simply want to expand their operations to meet market demands.

The Dry Creek Rancheria Band of Pomo Indians announced Thursday its plans to build a new $300 million resort hotel and casino in Alexander Valley…The site is already home to the tribe's River Rock Casino, which will remain open during construction of the new resort. (Associated Press, Mercury News, 6-29-07)

Early designs for a 400-room, 10-story hotel to replace the Spa Resort Casino Hotel in Palm Springs were displayed Tuesday morning for downtown merchants. The Agua Caliente Band of Cahuilla Indians showed the small crowd at the monthly Main Street Palm Springs board meeting drawings of a crescent-shaped hotel facing Indian Canyon Drive near downtown…To use more land facing Indian Canyon Drive and downtown Palm Springs, the tribe had exchanged land where its administration offices sat on Tahquitz Canyon Way with the Santa Ana-based Nexus Development Corp., developers of the Hard Rock Hotel near the Palm Springs Convention Center. (Kimberly Pierceall, Press-Enterprise, 6-6-07)

A booming Indian casino development more than 80 miles northeast of San Francisco announced plans Monday to nearly triple the size of its resort. The Rumsey Band of Wintun Indians, which owns the Cache Creek Casino Resort in western Yolo County, wants to add nearly 500 hotel rooms, a conference center, retail shopping, restaurants and some additional gambling. Tribal Chairman Marshall McKay said the tribe needs more space to accommodate potential business that it is now turning away. The tribe also wants to diversify its attractions for various reasons, among them to better compete with the growing number Northern California casinos, he said. (Patrick Hoge, San Francisco Chronicle, 6-5-07)

The four key compacts that have been at the center of the debate on Indian gaming in California got approval from the tribes and the Assembly in the last week of June. They are not final, but the end is in sight and it required more than a little political compromise. Labor is screaming "sell-out" and some tribes share that opinion, although not for the same reasons. But most of the other forces, the cities, the racetracks and card rooms, seem to be satisfied with the results. The racing interests are implying that they have been promised slot machines and the cities may feel they are getting enough input and compensating revenue.

Tribal leaders seeking approval of revised gambling compacts returned Monday to the Capitol, where they met with Assembly Speaker Fabian Núñez, D-Los Angeles. The five compacts are pending in the Assembly. Núñez has said a number of issues must be addressed before the tribal-state agreements can be approved. (Jake Henshaw, Palm Springs Desert Sun, 6-6-07)

The state Senate Thursday approved a new side agreement between Governor Schwarzenegger and four Indian tribes. The agreement is designed to persuade reluctant state Assembly members to support the largest expansion of gambling in the state since tribes were given the authority to operate casinos. The Assembly's consideration of the tribal compacts stalled for weeks because of labor unions' opposition. Tribes are now promising to change their treatment of employees and those addicted to gambling. A fifth tribe has refused to sign the side agreement. (Associated Press, 6-29-07)

"Now that we've taken that pressure off the tribes, it has been possible for us to continue to engage in negotiations that could bring substantial results," Couto said. "There are no promises, but (not opposing the compacts) was the dynamic that made business discussions possible. We're keeping our fingers crossed." As expansion of gaming for four Southern California casino tribes lurched toward approval in the Legislature June 28, it did so with little interference from the state's racing industry. Rather, the Thoroughbred Owners of California and most of the state's other racing organizations opted to not oppose 25-year operating compacts for four tribes…That's a remarkable change for a racing industry that has fought tribal gaming expansion at nearly every turn. (Jack Shinar, Blood Horse News, 6-29-07)

The California compacts further illustrate the basic theme of this entire report: competition. What the expansion in California will do is raise the level of competition – certainly for Nevada casinos that must compete against casino located much closer to centers of population. But more than for Nevada casinos, expansion in California will raise the bar of competition between tribes. Those located close to major population centers will get bigger and bigger, in the process increasing all of the amenities and ancillary activities in a way the will begin to look more and more like the Las Vegas Strip. The smaller, more remote casinos will be forced to focus on local populations and be satisfied with a much less sophisticated and exciting product; and if their customers want more they will be able to find it by driving a little further. That will make California more like Nevada or New Jersey, Mississippi or Louisiana – states with intense internal population. Most states with Indian gaming lack the population base that exists in California – that means the casinos are not as profitable and the competition is less direct and less intense. Also California, unlike most Indian gaming states, has right on its borders the highest concentration of sophisticated casinos in the world. The combination of those two conditions, the population in California and the casinos in Nevada, is going to make for one of the most competitive and profitable casino jurisdictions in the world.

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

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.