Gaming Guru

Bits and Pieces from Indian Country -- May 2006

He clearly thinks that, besides being "in charge" of reforming Indian gaming, he has the moral high ground and whatever he believes is right.

Bureau of Indian Affairs is expecting tribes to submit a number of applications in the next two weeks…But with tribes facing a deadline in a bill sponsored by Sen. John McCain (R-Arizona) that would bar such applications, he is preparing for an influx. The BIA currently has 13 applications pending under the two-part determination section of the Indian Gaming Regulatory Act. "That may increase in the next few days because of the April 15 deadline that is included in Sen. McCain's legislation," Skibine said at a consultation session in Albuquerque, New Mexico… McCain warned that he would impose a March 29 cut-off, the date the Senate Indian Affairs Committee approved the measure, if he sees more than he likes. "If there's a flood of applications, on the floor I'll go back to March 29, OK, and we'll have a vote [by] the full Senate." Indianz News, 4-7-06

Sovereignty is a moving target. In some states it is a cigarette sales issue; in others it is a gasoline sales issue. It is very much a gaming issue in most states and even an Internet gambling issue in some. But a recent development promises a new frontier: abortions. South Dakota is leading the country is passing anti-abortion legislation to test the new Supreme Court. The Oglala Sioux have used the opportunity to propose a new test for sovereignty - tribal "family planning" services.

Indian tribes in South Dakota are planning to undermine South Dakota's statewide ban on abortions by offering abortions on a sovereign Indian reservation, not subject to state law. If House Bill 1215, banning abortions in South Dakota, passes, President of the Oglala Sioux Tribe, Cecilia Fire Thunder, said she will try to open a women's clinic on Pine Ridge that will provide abortions and other "family planning" services. Amanda B. Carpenter, Human Events, 4-7-06

Rhode Island has stepped up to the plate to provide this month's gaming entertainment. The Narragansett Indian tribe of Rhode Island and Harrah's have been trying for years to get a casino approved. The process has been slow, complicated, and I would assume expensive for Harrah's. This month, with his usual flare, Donald Trump stepped in - saying that if there is going to be a casino in the state it should be put out to bid and, of course, he would like to make a bid. That struck a nerve - as it always does with politicians - with some opponents of gaming in Rhode Island including the governor.

Drawing cheers and applause from a packed banquet hall, Harrah's Entertainment's senior vice president, Jan L. Jones, last night rejected Donald Trump's call for competitive bidding on a casino venture, saying Trump had been absent during the years Harrah's negotiated with lawmakers and tweaked its proposal to assuage community concerns. Referring to a full-page ad Trump published in yesterday's Providence Journal -- featuring his smiling face and signature -- Jones suggested the bidding process had already passed Trump by. "We have been going through a competitive bidding process for the last eight years. We have been at the legislature. We have put our money where our mouth is," said Jones, a former mayor of Las Vegas. "It's very easy to come at the end and say, 'Oh, I'm serious.'" Her comments came at the start of a three-hour community meeting Harrah's held last night at the West Valley Inn, on Blossom Street. Benjamin N. Gedan, Providence Journal 4-26-06

Harrah's must just love it when the Donald shows up at the end and wants the license without ever having laid any of the groundwork that created the opportunity. But then Mr. Trump is known for just that, showing up late and stealing the show. He did it in Gary, Indiana, and a couple of times in Indian country. He may not be the most successful operator in casino history, but he would qualify for the top ten in making an impression on the decision makers. Following his appearance in Rhode Island he turned up in Dubai, where he promised to build a $600 million hotel (no casino) in the $33 billion airport-resort city to be built there.

The news in Indian country over the past year has been dominated by off-reservation and sovereignty debates - mostly framed in negative terms. In April there were some positive and interesting developments in Indian country. Maybe the most surprising was the announcement by the Mashantucket Pequot tribe of a partnership with MGM Mirage as well as a move to put a casino in Biloxi, Mississippi.

MGM Mirage Inc. has agreed to license its name to the Mashantucket Pequot Tribal Nation for a planned $700 million hotel and casino expansion at the Foxwoods Resort Casino. MSNBC, 4-25-06

The Mashantucket Pequot Tribal Nation, which owns Foxwoods, the world's largest casino resort, is bringing its brand to Biloxi. Its expansion company, Foxwoods Development Group, plans to invest $400 million for a casino resort at the site of the Broadwater Hotel. Tom Wilemon, Biloxi Sun Herald, 4-26-06

There have already been dozens of articles speculating on the reasons and underlying advantages and future partnerships of mega-casino companies with major casino operating tribes. In Connecticut there is conjecture by the press and the attorney general that something is amiss and that MGM has found a way to sneak through the backdoor of Indian gaming. In Nevada and elsewhere the speculation is the opposite: that super-rich tribes with untaxed gaming revenues from other states will come in and somehow gain an advantage over the local industry. To me it seems a little simpler: a partnership of two very large gaming companies who plan on using their relationship to strengthen their core business and extend into new jurisdictions. Nothing illegal or sinister - just good business - something like Chrysler and Mercedes. Of course, there are those who see the auto merger as Germany invading the U.S.

IGT is testing its server-based gaming in California at Barona. One serious advantage that Indian country has is in the game approval process. It is easier, faster and much less expensive to try new games and new technology in Indian country. Conventional jurisdictions often struggle over the legalities of new technologies, while if a tribe is interested and sees commercial applications, it can test the technology. Eventually the two processes cross, and any technology the major manufacturers develop and market has to be acceptable to major jurisdictions as well. But for a quick test, Indian country is often a better place to run out the early models.

"Barona is one of the real proponents of technology on the casino floor. They have very progressive management and their customers understand new casino technology." To customers at Barona Valley Ranch, the slots in a 20-machine bank don't appear to be much different than any of the casino's 1,980 other games. But for officials of the East San Diego County American Indian casino and gambling equipment maker International Game Technology, the 20 games represent the beginning of a breakthrough in the future makeup of slot floors. Barona is the first California casino to test market server-based gaming developed by IGT. The system could, conceivably, let casino customers change games on a slot machine with a few clicks of a computer mouse…Slot makers said they think server-based gaming could remake casino floors by the end of decade. Slot machine boxes would have pull-down menus of different games, denominations, wagering limits and payouts... Barona was selected by IGT as the California test casino because of its history with IGT. When it opened in 2003, the 300,000-square-foot casino equipped all of its 2,000 slot machines with ticket in-ticket out technology. On the ultrahigh-limit slot machines in Barona's two private gaming lounges, the machines use fingerprint screening to allow for in-house cash transfers from a customer's account in the casino cage directly to the $500 and $1,000 minimum bet machines. Howard Stutz, Gaming Wire, Las Vegas Review-Journal, 4-18-06

Technology and mergers, whether they are in Indian country or not, are more than just a major story for the month - they are the major story of the gaming industry last year and this year. Harrah's and MGM-Mirage announced record results, reflecting the results of last year's two major mergers. MGM and Harrah's have both purchased about all the law will allow, so now both are strengthening their positions in Indian country and making strategic partnerships for new domestic and foreign opportunities. The bidding war over Aztar shows just how competitive the industry has become as other gaming corporations strive to join the giants at the top.

Internet and server-based gaming (aren't they really two sides of the same coin?) are driving change across the board and driving revenues. American gaming companies are going to want to embrace server-based gaming, and just as surely are going to want to embrace the Internet. The major gaming companies also want to embrace Indian gaming. Okay, it isn't exactly the same, but strategic partnerships involving major tribes and major gaming companies make sense. At the end of the day, you'll no longer have an industry where each segment has to be described separately, as if each were a different industry composed of completely different customers and operators. The pieces are Internet, Indian and commercial, but when the pieces are combined, there will simply be gaming, regulated and operated differently in different places, but still one industry - and one industry dominated by very few players. Not much opportunity for the little guy to own or operate any of the casinos, real or virtual, but at least we can still own stock.

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

Ken