Bits and Pieces from Indian Country - December 2003

Native American restaurateur Dave Anderson was confirmed Tuesday by the Senate to head the Bureau of Indian Affairs (BIA). He is the first Minnesotan to head a Bush administration agency. Anderson, founder of the Famous Dave's barbeque chain, was approved without dissent as Congress adjourned for the year. "I look forward to setting the stage for a new positive direction in Indian country for our youth, one that is full of achievement and accomplishment," Anderson said in a statement released by the Interior Department, which houses the BIA. "Our youth need to know that there isn't anything that we can't accomplish as Indian people if we start believing in ourselves and start taking full responsibility for our destinies," he said. … Anderson, a Harvard-educated Choctaw and Ojibwa Indian, overcame bankruptcy and alcoholism before finding business success. With two partners, he turned a small bingo hall on the Mille Lacs Reservation in Minnesota into the foundations of Grand Casinos Inc. Kevin Diaz, Minneapolis Star Tribune, 12-10-03

Here is a trend that will continue into next year and after: as tribes generate more cash flow, they need less help from gaming management companies. To start in the casino business, tribes often hired a management company and used the gaming company's resources to finance the casino. Certainly that was one of Harrah's competitive advantages, access to capital. Increasingly, however, tribes are gaining access to capital on their own. The opportunities for management companies will diminish as more tribes gain that access. The kind of consolidation that has taken place in the general industry is not likely to happen in Indian country; there will be a comparable growth of the stronger more successful tribes. They will be the ones that can build bigger and bigger resorts, diversify in other industries and be able to assist smaller tribes.

The Eastern Band of Cherokee Indians on Monday broke ground on a new hotel tower, and this time the tribe is expanding its gaming business without financial support from Harrah's Entertainment. …The tribe borrowed $60 million for the new hotel and has taken over the existing debt on the entire gaming complex. The total debt on the business, with the new hotel included, is $175 million. …The principle investors are Wells Fargo and Bank of America. …Harrah's, under a management agreement the tribe expects to renew this year, operates the casino and hotel for the Eastern Band. The tribe owns the business and pays Harrah's a fee for its services. Jon Ostendorff, Ashville Citzen-Times, 12-2-03

For the second time this year, the Confederated Tribes of Grand Ronde has proposed building a casino to help pay for a big-ticket Portland construction project that otherwise doesn't pencil out. Last spring, the tribe offered to pay for a $350 million baseball stadium in return for a Portland casino, but Gov. Ted Kulongoski said he wouldn't approve an off-reservation casino. But he left the door open for other proposals, saying he would look at them on a case-by-case basis. This time the proposal involves a hotel with a price tag in the range of $130 million in Northeast Portland near Lloyd Center and the Rose Garden. … Although the agency's executive director doesn't sound enthusiastic about the casino idea, the tribe remains among seven development teams that will be asked to submit more detailed proposals early next year. Fred Leeson, Oregonian, 12-6-03

Federal recognition and sovereignty is the golden key, the franchise as it were, to operating a casino. At least that is the way non-Indians often view it. It certainly is much more to any tribe seeking federal recognition. There are many stories and a few books portraying the quest for recognition and a casino franchise as a simple process, one that allows any group of pretenders to succeed. Ask the Lumbee tribe of North Carolina how simple it is to achieve recognition. It is likely they will receive official recognition in 2004, only 115 years after they started the process.

Federal recognition came within reach for the Lumbee tribe in 2003 thanks to a new ally. U.S. Sen. Elizabeth Dole joined the tribe's fight to improve services for its members. Dole, a Republican elected in 2002, submitted the Lumbee Acknowledgment Act in February that would grant full federal recognition for the tribe. …Federal recognition could bring millions of dollars for economic development, housing, education and health care for tribal members. …Congress recognized the Lumbees in 1956, but the legislation denied the tribe benefits and privileges given to other federally recognized tribes. …There are about 55,000 Lumbees in the country. Most of them live in Robeson and surrounding counties. The tribe is the largest east of the Mississippi River. Lumbee tribal leaders began their quest for federal recognition 115 years ago. Venita Jenkins, Fayetteville Observer, 12-30-03

In every state there is opposition, but it is never positioned as anti-Indian. It is often couched in high purpose. Most common is a politician pandering to some special interest. In Louisiana the lame duck Governor is trying to negotiate a last minute compact that includes a state "participation" equal to the revenue from other casinos. On December 24th Governor Mike Foster received a letter from the Bureau of Indian Affairs giving him the power to decide if the Jena Band can build a full casino in Logansport. A Louisiana congressman used the announcement as an opportunity to get some publicity and possibly as a platform to introduce legislation that will give him national exposure. Foster doesn't stand much chance of getting a compact signed, and his successor does not support it; so both he and the congressman just seem to be grandstanding.

A northwest Louisiana congressman says he disagrees with a new federal ruling that opens the way for a new Indian casino in the state and may take measures to overturn it. U.S. Rep. Jim McCrery, R-Shreveport, who has opposed the Jena Band of Choctaw's plans for a casino in Logansport, said he is studying this week's U.S. Bureau of Indian Affairs ruling to see if it was done properly. If it was, then he said he would file legislation to prohibit the establishment of a casino on land not already part of a reservation. "My single objection is this will allow Indian tribes all over the country to go reservation shopping for lands for casinos," McCrery said. Associated Press, Biloxi Sun-Herald, 12-26-03

The casino franchise-like opportunity is valuable, in the right location really valuable. Most tribes are under no obligation to report results. There are, however, few tribes that do report results from casino operations; the numbers that are public, either from reporting or by inference from state fees, are impressive to say the least.

The state Division of Special Revenue reported Monday that Connecticut's casinos maintained steady growth in November…5 percent compared with a year ago….$131.3 million on slot machines for the month.…important "handle" [coin-in]….grew by 6 percent over last November, rising to $1.6 billion. Hartford Courant, 12-16-03

The tribes' share of Washington's gambling market rose from 40 percent to 53 percent in the past two years….commission estimates that tribal net receipts…rose from roughly $422 million in 2001 to $700 million this year, The Spokesman-Review newspaper reported. Associated Press, Tacoma News, 12-4-03

The Choctaw Resort Development Enterprise today announced revenues and results for its fiscal year, which ended September 30, 2003. Net revenues for the year were $298.3 million compared to $248.2 million for the fiscal year ended September 30, 2002. The $50.1 million, or 20.2%, increase in net revenues was primarily due to an increase in gaming revenues attributable to the opening of the Golden Moon on August 26, 2002. Business Wire, Hotel Online, 12-23-03

Bettors have plunked down about $4 billion in slot machines and table games at the Seneca Nation's Niagara Falls casino in the past year, a remarkable level that will provide more than $250 million…numbers were extrapolated from what Seneca officials say will be a check written to New York State….$38 million as part of its share of the casino's slot machine numbers. Tom Precious, Buffalo News, 12-22-03

The Indian gaming industry is maturing, just as the general industry has matured. The growth in revenues has slowed in many areas, but certainly not stopped. Even the numbers are staggering and attention getting. Which is not always a good thing. States look at the revenue and salivate. Governors and state legislators trying to cut themselves in for part of the take was certainly a trend in 2003. At this point, Indian gaming and the general industry are facing a common challenge, increased taxation. They are each facing increased competition also and, therefore, increased cost of operations. While Indian casinos and non-Indian casinos are often competitors the problems are common to each. And the solutions will also often be common. Maturity has a commonizing effect; it may not bring competitors together, though it sometimes does, but it certainly forces each player to study and understand all of the other major players.