Gaming Guru

Bits and Pieces from Indian Country - May 2003

The casino issue is simple: who has a right to operate an Indian casino?  The easy answer is a federally recognized tribe with a tribal/state gaming compact.  So what happens if another government replaces the elected government with a separate claim to rule?  The National Indian Gaming Commission says the casino has to close, or can only be operated by the duly elected tribal government.  That is where it stands; the casino is closed, as the case begins to meander through the federal courts.

Under a judge's order, U.S. Marshal and deputies, assisted by local law enforcement, closed the Meskwaki casino shortly before 6 a.m. on May 23. The move put more than 1,000 people out of work, and will cost the Sac and Fox Tribe of the Mississippi in Iowa an estimated $3 million a week in revenue.  The casino will remain closed until the National Indian Gaming Commission decides whether to permanently close the casino, one of Iowa's largest gaming businesses.  Jennifer Hemmingsen, Indian Country Today, 5-30-03

The stakes are high:  1,000 jobs and $3 million a week in revenue.  The high stakes often make for high emotions as factions compete for control.  In Connecticut the rewards are the legends of the industry, the largest and most profitable casinos in the world.  The rewards only fuel the emotions of the opponents, who have not tired nor become discouraged with the fight.  The attorney general and the state's congressional delegation have continually fought to limit and withdraw federal recognition and thereby the right to operate a casino in the state.

Foxwoods Resort Casino and Mohegan Sun both won more than $63 million from their customers in April, a month casino operators characterized as iffy in terms of weather and continued worries about the economy and world events.  …Mohegan Sun's win was $63,787,752, its handle $768.8 million and its hold percentage 8.3 percent. Foxwoods' win was $63,134,149, its handle $781.5 million and its hold 8.08 percent. Mohegan Sun had 6,101 slot machines on its gaming floor, which is 494 fewer than Foxwoods' 6,595 units.  Karen Florin, The Day, 5-16-03

Blumenthal: State to fight against casinos.  That's how Attorney General Richard Blumenthal described the status of tribal recognition in eastern Connecticut Wednesday to Windham County business and civic leaders.  Blumenthal was a guest speaker at the Northeastern Chamber of Commerce luncheon at The Harvest restaurant. He said tribal recognition has caused a great divide between the state and federal government.  As the state's chief prosecutor, Blumenthal is involved in an appeal of the federal recognition granted to the Historic Eastern Pequot tribe of North Stonington, which combined the Eastern Pequot and Paucatuck Eastern Pequot tribes. He said a final decision is expected by the end of the year.  Blumenthal called the recognition process a "scandal."  "It's broken and it needs to be fixed," Blumenthal said. "It is so infected by money and politics."  Douglas P. Guarino, Norwich Bulletin, 5-9-03

Connecticut is not the only state where the opponents of Indian gaming are increasing their efforts.  In the other states with the significant tribal presence and the growth of Indian gaming, the opposition is mounting.  In Wisconsin the governor and the republicans in the state legislation are at war over the compacts; in New York the governor is also in a battle over his authority to negotiate Indian gaming compacts; while in California the opposition at this point is mainly local communities fighting to gain control over activities on tribal land.  And one should not forget the Donald who is suing an Indian tribe and a developer in Connecticut because they cut him out of the picture.  Trump promises to "tell all" and in typical Donald Trump fashion make Indian gaming about him. 

New York State Gov. George Pataki on Monday said the accord with the St. Regis Mohawks tribe he will unveil this afternoon will let them build a new casino about 90 miles from Manhattan and give the tribe cash to buy back land they say was taken from them.  Park Place Entertainment Corp.has been selected to run the $500 million new casino the St. Regis Mohawks plan to build in the Catskills. Located only about 90 miles from New York City, the new resort will compete with tribal casinos in Connecticut and resorts in Atlantic City, New Jersey.  But the plan for the casino, which a draft news release says would give cash-starved New York State a share in slot machine revenues, must be approved by the Legislature.  Joan Gralla, Reuters, Yahoo Business, 5-12-03

The Coast Miwok Indians are offering Sonoma County payments that could exceed $100 million to sweeten reaction to the tribe's plans for a casino in the undeveloped bay lands near Sears Point.  In a 10-point pledge of cooperation distributed to local officials, the Miwoks promise to fund social services, pay the full cost of law enforcement and improve roads related to the proposed casino on traditional tribal lands.  Guy Kovner, Press Democrat, 5-12-03

Petaluma Joins Casino Opposition.  A much smaller crowd than the 400 that gathered in Sonoma last month met Thursday night in Petaluma to learn more about the Graton Rancheria tribe's proposed resort casino at Highway 37 and Lakeville Road.  …Cheryl Schmit, director of Stand Up for California, a gaming watchdog group, explained that an Indian resort casino would not be required to pay taxes - including property or hotel.  "As tribal gaming continues to grow, it is anticipated to be a $10 billion industry in the next 10 years," Schmit said. "Additional allowable slot machines that may be approved by Gov. Gray Davis means this number could be reached sooner."  Gaming is fast becoming a large industry in California, which primarily benefits 36,600 enrolled tribal members, Schmit added.  "This is a black hole in your community which will not be putting back what it's taking out," Schmit said.  Tami Casias, Sonoma Index-Tribune, 6-3-03

Donald Trump's lawyers promised Wednesday to knock the lid off the secretive world of casino investors and Indian tribes, with a multimillion-dollar lawsuit pitting high-society millionaires against each other.  For the first time in Connecticut, Trump's suit will reveal the money backers have spread around as they try to become the developers of the state's next mega-casino. In the process, the case could also provide a welcome assist to the state, which is fighting the recognition of the Eastern Pequots because it doesn't want another casino here.  Trump, though, has a more basic beef: He wants the $10.1 million he gave the Paucatuck Eastern Pequots, plus additional damages.  "I've been treated very unfairly. I was the one that put the Indians in the position they are in by spending millions and millions of dollars. What they did to me they should not be allowed to do to anyone," Trump said in a telephone interview Wednesday. "I am so angry that a thing like this could happen to anyone," Trump said. "It's shocking."  Rick Green, Hartford Courant, 5-29-03

Casinos are not the only place that conflict is found in Indian country.  There is an ongoing debate about taxation.  Similar to operating casinos, tribes claim that state tax laws don't apply on tribal land.  In Washington, the Tulalip tribe wants to collect its own, but not local, sales tax.  In several states, tribes want to tax gasoline, but not collect state gasoline taxes; and cigarettes have been a major issue.  A few years ago in New York, the governor called out the state militia and the tribes closed some state highways running across tribal land.  That one ended in a stalemate, but the New York legislation is bringing back new taxes meant to be collected on tribal land.  This month in Washington and Idaho the feds got into the cigarette business.  Cigarette sales and taxes are a separate issue from gaming, but they have implications for gaming.  Both cigarettes and casinos are issues of sovereignty.  Both question the state's authority on tribal land and both can be very contentious.

Feds Seize Smokes at Tribal Shops.  Federal agents raided tribal smoke shops across Washington and Idaho yesterday, reopening a lingering dispute over the taxation of cigarettes sold on Indian reservations.   Jonathan Martin, Seattle Times, 5-21-03

And finally, a study from Oregon that says a great deal about the state of gaming in general.  In the study fewer people in Oregon gambled, but spent more.  The economy and war caused people to be more cautious.  Travel was reduced, so that local Indian casinos benefited and Reno casinos felt the pinch.

A new study says fewer Oregonians gambled at the state's eight tribal casinos last year, but that those who did spent more per capita than in 2001. Oregonians last year spent $357 million gambling at tribal casinos in the state, up almost 15 percent from the $310.7 million in 2001, according to a study by Bob Whelan, an economist with ECONorthwest, a Eugene-based economic consulting firm.  Whelan, who has studied gambling in Oregon for more than a decade, directed similar studies in 1998 and 2000.  Despite the spending increase, Whelan found the number of Oregonians going to casinos is falling. In a survey of 800 residents, only 17.4 percent said they gambled at a casino in Oregon, down from the 24.5 percent reported in 1998.  "The tribal casinos aren't new anymore," Whelan said.  Whelan found that the casinos last year were helped by the weak state and national economies. "When the Oregon economy weakens, consumers opt to spend more of the leisure time dollars locally," he said.  "This came at the expense of Las Vegas and Reno." KVAL 13 News (Eugene, Oregon), 5-22-03

That is a snap shot of the gaming industry today.  The economy has kept people closer to home.  There are less people going to casinos, though they may be spending slightly more.  Casinos that have cropped up closer to home have cut into the business of the traditional destinations or put another way, the market area of every casino is shrinking.  The situation might change, but with the likelihood of increased taxes and competition and fewer people willing to take a risk, the near-term prospects for gaming operators are not as bright as they were five or 10 years ago.  Gaming has matured; it is now a very competitive industry, where the largest, best-capitalized and best-managed companies have a significant advantage over the rest of the field.