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Best of Ken Adams

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Bits & Pieces from Indian Country - October 2007

2 November 2007

Indian gaming is not escaping the competitive costs of gaming, nor can it hope to avoid the taxation levels gaming is experiencing. Tribes cannot be taxed by a state, just as the states are not taxed by the federal government. But to get expanded compacts and additional games, tribes are forced to make some kind of revenue sharing agreement with the host states. And even then, there is increasing resistance to tribal gaming; just in the last couple of weeks, movements are developing in California, Florida, Maine and Mississippi to prevent expanded Indian gaming.

-Talks between Governor Charlie Crist and the Seminole Tribe of Florida resume today over the expansion of casino-style gambling, but lawmakers are about to weigh in. Crist said he feels compelled to strike a deal to allow Class III gambling, including slot machines and blackjack, in tribal casinos or risk losing hundreds of millions of dollars a year for the state. House budget chief Ray Sansom told reporters last week that his chamber would oppose any deal to expand gambling in Florida. House Speaker Marco Rubio has even asked for a nonbinding advisory opinion from Attorney General Bill McCollum stating that Crist's negotiations aren't necessary. The dispute is likely headed for court. (Jim Ash, Pensacola News Journal)

Jackson County supervisors set 9 a.m. on Sept. 27 as the time and date on which they will meet with the Mississippi Band of Choctaw Indians to hear the tribe's proposal for a casino resort project along Mississippi 57 near Interstate 10. They set a time in which all the supervisors could attend. The board doesn't regularly meet on the last Monday of the month, so the next formal meeting would have been Oct. 1. Jackson County voters will indicate in the referendum [in November] whether they support having a casino in the county that voted against having gambling when the other two Coast counties voted it in. (Karen Nelson, Biloxi Sun Herald, 9-4-04)

Granted the movement in California is ongoing, almost since the first compacts were signed by the last governor of California, Gray Davis. A great deal of money has been spent on both sides trying to convince voters to vote for or against Indian gaming, and it continues to be a very expensive prospect. This year tribes with new compacts that allow for significant expansion of gaming in exchange for significant revenue sharing are fighting again on two fronts. The first battle was for approval of the compacts by the state legislature, and the second is to defeat a petition effort aimed at putting gaming on the ballot again.

The tribes which support the new compacts are going to work very hard to prove that gaming is good for Indians and good for Californians.

Tribal gaming in California has significantly reduced poverty and improved employment, incomes and educational attainment in communities near the casinos, particularly in the poorest regions of the state, researchers at the University of California, Riverside have found. Their report, "Lands of Opportunity: Social and Economic Effects of Tribal Gaming on Localities," is presented in the September issue of Policy Matters, a quarterly series of reports that provide timely research and guidance on issues of concern to policymakers at the local, state and national levels. Authors Mindy Marks, assistant professor of economics at UCR, and Kate Spilde Contreras, managing director of UCR's Center for California Native Nations, found that gaming operations have beneficial effects on the tribes, on communities near gaming reservations and on California generally. Because these casinos must be located on existing tribal trust lands, which typically are located in poorer regions of the state, economic activity resulting from tribal government gaming tends to concentrate employment and other benefits in counties that need economic development the most, they said. (University of California, Riverside Press Release, 9-4-07)

Indian gaming is not a backwater issue. Across the country Indian gaming and the increased visibility of successful gaming tribes is front page material. Even on Wall Street? Even on Wall Street.

The leaders and finance officers of five Tribal Nations made history recently when they became the first Native Americans to preside over the ringing of the opening bell at a global financial exchange. Maurice "Moe" John, President of the Seneca Nation of Indians, Richard Bowers Jr., Vice-Chairman of the Seminole Tribe of Florida and President of the Seminole Board of Directors, and Deron Marquez, former Chairman of the San Manuel Band of Mission Indians, sounded the start of trading at the New York Mercantile Exchange, accompanied by cheers and applause from traders on the floor and over 100 Tribal Council members and finance professionals packing the audience for the occasion. (Native Time, 9-4-07)

However, there are still backwater locations -- the reservations located a long way from major population centers. Tribes in those locations are not as rich and successful as their more urban brethren. But those remote locations place as much hope in their casinos and their possible benefits for the tribe as the others. Gaming is the first major opportunity for many tribes to escape the economy and life imposed on them by the federal Indian policies of the last 150 years.

Wyoming's Eastern Shoshone Tribe Monday opened its first casino, the first of two Vegas-style gaming halls the tribe plans to build on the Wind River Indian Reservation. Around 500 enthusiastic tribal members, area residents and tourists turned out for free plates of hamburgers and potato salad, and to try their hand at the Class III gambling machines. The 7,000-square-foot casino near Lander opened with about 100 slot machines. Another 50 will be installed soon, including 40 in a separate nonsmoking wing…The casino, while employing about 75 full-time workers, also features a self-serve restaurant and free coffee and sodas. It is located about five miles north of Lander on Wyoming Highway 287. Operating hours initially will run from 10 a.m. to 2 a.m. and will later be expanded to meet demand…The Shoshone tribe has plans for another larger casino about eight miles north of Riverton on State Highway 789, but is still negotiating for the land. The Northern Arapaho Tribe operates the Wind River Casino near Riverton, which also offers Vegas-style gaming, including table games such as blackjack. The new Shoshone casino does not have table games. The Arapahos also own a smaller casino near Ethete, and have plans to open a 40,000-square-foot casino just south of Riverton in the coming months. (Jared Miller, Casper Star-Tribune, 9-4-07)

This weekend [10-6-07] marks the first anniversary of the Blackfeet Tribe's big casino, but officials are reluctant to say whether their $7 million bet is paying off. "Our financial position at the end of 2006 was not as strong as we had hoped it would be," said Dennis Fitzpatrick, manager of the Glacier Peaks Casino. "Our revenues were very good, but our expenses were even greater, so we let our managers go," said tribal Treasurer Joe Gervais… "They've had well over $10 million in revenue this year and they've turned a small profit, but they're in a rather large hole due to their debt load," he said. Fitzpatrick agreed, noting that payroll expenses peaked at $278,676 during the first two weeks of October last year, but dropped to $94,200 for the last bi-weekly payroll this month after the casino cut two-thirds of its staff. (Eric Newhouse, Great Fall Tribune, 10-2-07)

And when those hopes are fulfilled, the tribes quickly move into new businesses to broaden their revenue streams and protect the gains they have made. The Muckleshoot tribe of Washington is one of those tribes that 15 years ago had little hope for economic development or even basic employment for the majority of its tribal members. Today they are bidding on building and operating a National Basketball Association arena, a role that is reminiscent of Japanese businesses flush with success in a booming Japanese economy just a few years ago.

The Muckleshoot Tribe announced its willingness Monday to donate a 26.5-acre parcel of land to any group that wants to build an NBA arena in Auburn. But is Sonics owner Clay Bennett interested? Bennett and Gov. Chris Gregoire received copies of a now-complete feasibility study showing the property adjacent to Emerald Downs racetrack as a viable site for a multi-purpose arena, as well as the tribe's offer of free use of their land and parking for the project… The Muckleshoot offer is contingent on someone stepping up with a financing plan for a potential 18,500-seat arena that would cost about $415 million in current dollars. (Greg Johns, Seattle Post-Intelligencer, 9-4-07)

The agreements between Gov. Arnold Schwarzenegger and two Indian tribes to allow an off-reservation casino to be built in Barstow expired at midnight on Monday leaving the future of the project in doubt. The Big Lagoon Rancheria and Los Coyotes Indian tribes had signed casino compacts with the governor's office on Sept. 9, 2005, but those agreements would have had to have been ratified by both houses of the state legislature by Sept. 17 in order for the project to go forward. The legislature has since adjourned for the 2007 regular session. Tom Shields, spokesman for the casino's developer BarWest, LLC., said that despite the expiration, the tribes still hope to continue with the project. "Both tribes are still interested in pursuing Barstow," he said. He said the tribes and BarWest thanked the unions, environmental groups and city officials for their lobbying efforts for the project but said more efforts were needed. (Jason Smith, Desert Dispatch, 9-4-07)

The most obvious examples of tribes taking gaming profits and moving outside of Indian gaming are provided by three of the most successful tribes in gaming--the Seminole in Florida, who recently purchased the Hard Rock Café franchise, and the Mohegans and Pequot from Connecticut. Those last two tribes are currently operating the two largest casinos in the world, but they are also bidding for or exploring opportunities everywhere gaming is being discussed. Currently both tribes are involved in Kansas, Massachusetts and Pennsylvania. And it appears they will be competing for licenses and then later competing as operators once they have a license. Their expansion is not out of gaming, but it is out of Indian gaming. In any jurisdiction except Connecticut, both tribes are simply corporate entities operating under the same laws as any other corporation.

The Mohegan tribe is hoping to develop a casino and resort in northeast Kansas, not far from a south-central county where its rival, Foxwoods Resort Casino, is putting in a bid of its own. The Mohegan Tribal Gaming Authority, which owns the Mohegan Sun casino in Uncasville and recently developed the Mohegan Sun at Pocono Downs near Wilkes-Barre, Pa., is joining forces with two other partners to develop a potentially massive "Mohegan Sun-style" resort in Wyandotte County, Kan…If selected from a field of five other candidates in Kansas City and still more in the towns of Bonner Springs and Edwardsville, the Mohegan project's $770 million first phase could include a casino, 350-room hotel, 250 apartments lodged over 200,000 square feet of stores, and a 35,500-square foot convention center, said Jeff Hartmann, the Mohegan tribal authority's chief operating officer…The Mohegan's competitor in Connecticut, Foxwoods Development Co., an arm of the Mashantucket Pequot Tribal Nation, which owns and operates Foxwoods, has joined Chisholm Creek Ventures, a limited liability company, and the Iowa Tribe of Kansas and Nebraska with similar hopes of building a casino in Sumner County at the state's southern border. (Patricia Daddona, New London Day, 9-27-07)

Connecticut's Mohegan Sun already has a deal of its own, with plans to bid for a license to build a $1 billion gambling resort in the southwestern Massachusetts town of Palmer. Wonderland racetrack and Boston restaurant owner Charles Sarkis is talking with Foxwoods executives as he explores plans to develop a casino on his Revere track. Sarkis and representatives from Foxwoods, the nation's largest casino, huddled Tuesday at Sarkis' Back Bay eatery, Abe & Louie's. The Boston businessman has already signaled his interest in bidding for one of three casino resort licenses Gov. Deval Patrick has proposed auctioning off to bring in hundreds of millions of dollars for state coffers. The meeting may be the first serious sign of interest by Connecticut's Foxwoods in the emerging Massachusetts casino market, potentially adding a powerful industry player to the mix. (Scott Van Voorhis, Boston Herald, 9-4-07)

The bidding strength of the two Connecticut tribes under their casino names, Mohegan Sun and Foxwoods, puts them in the same class as Harrah's, Las Vegas Sands, and MGM Mirage, and a step above Stations and Boyd, which have both limited the jurisdictions and the number of new projects they are willing to approach. Mohegan Sun and Foxwoods have the cash flow, access to debt and equity financing, experience, and reputation to bid against any American gaming company which further illustrates the point that "only the largest need apply." It doesn't mean that small casinos don't or won't exist or that small companies can't succeed; it just means they will only be in jurisdictions that are too small to attract the bigger players.

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.