Gaming Guru

Bits and Pieces from Indian Country - September 2004

While many of the state's industries showed little or no job growth over the last 12 months, employment at California Indian gaming casinos continued its rapid growth, employing 46,400 individuals as of August, 2004. Among industries with 20,000 or more workers, Indian gaming once again had the highest year over year growth, increasing by 9.4%, according to figures just released by the California Employment Development Department (EDD). "…New or renegotiated compacts signed by nine tribes in recent months will add even more jobs in the coming months, not just in new construction but also permanent jobs in expanded Indian casinos… PRNewswire, Yahoo! Business, 9-14-04

The dynamics of Indian gaming in California both frighten and attract operators from other states. MGM Mirage blames tribal casinos for less than stellar operating results and Caesars (soon to be Harrah's) signed up to join the action.

Competition from tribal casinos has likely cut revenue at MGM Mirage casinos by about 3 percent to 4 percent a year over the past several years as Indian-owned properties have grown in scope, according to a top MGM Mirage executive. Liz Benston, Las Vegas Sun, 9-30-04

Caesars Entertainment is expected to announce a final agreement this morning with the Big Sandy Band of Western Mono Indians to develop and manage a $250 million tribal casino near Fresno, Calif., sources close to the deal said. …48 acres of tribal land near Fresno in the central San Joaquin Valley. Rod Smith, Gaming Wire, Las Vegas Review-Journal, 9-16-04

Operating slot machines in California is a very big prize, sought after by many. There are two initiatives on the ballot in California this year: one would expand Indian gaming without the Governor getting anywhere near the 25 percent of slot revenues he dreams of; the other would allow card rooms and race tracks to operate slots. The stakes are high, and even if the polls indicate both will fail, the stakes are too high to just let nature take its course. There will be millions of dollars, maybe as much as $50 million, spent on advertising in the days leading up to Election Day.

With little more than six weeks until election day, a multimillion-dollar donnybrook over the future of gambling in California has begun. The state's big racetracks and card clubs will Thursday launch their big push for an initiative that could give them slot machines with a $3 million-a-week television buy for a new advertisement that takes a jarring swipe at Indian gambling. James P. Sweeney, Copley News Service, San Diego Union-Tribune, 9-17-04

California is not the only state where keeping or gaining a casino operating opportunity is a high stakes proposition. In Michigan the existing operators are working, and spending, together to protect their interests.

The owners of Detroit's MGM Grand Casino and Soaring Eagle in Mt. Pleasant have spent nearly $7 million in the opening rounds of the campaign to win voter approval of a constitutional amendment to limit the expansion of gambling in Michigan. The Saginaw Chippewas, owners of the Soaring Eagle complex, led the way with donations of $3,543,477 to the Let Voters Decide campaign, according to reports filed Monday with state elections officials. MGM was close behind at $3,189,386. Each was among the largest campaign donations in Michigan history. And there are likely more on the way.
Dawson Bell, Detroit Free Press, 9-28-04

As interesting or expensive as either California or Michigan may be for operators, opponents of gaming, or simple bystanders, the most interesting election story for me comes from Florida. Tribes have received a great deal of media coverage this year for the size of political contributions coming from gaming tribes. Since 1990 tribes have contributed $20 million dollars to political campaigns. That is significant and the tribes are only going to become more important. Both presidential candidates have in one manner or another appealed to the tribes and the "Indian" vote.

American Indian tribes, flush with casino cash, are contributing thousands of dollars to candidates in close Senate and House races, including to Senate Democratic Leader Tom Daschle. While most of the money is going to Democrats, Republicans are getting a bigger share than they did four years ago. Indian gaming interests gave 65 percent to Democrats in the last two years, compared to 79 percent in the 2000 election cycle, according to the nonpartisan Center for Responsive Politics. Wealthy tribes who mainly make their money in casino gaming used several events surrounding last week's opening of the Smithsonian's National Museum of the American Indian to build on the $4.86 million they have already poured into the 2004 campaigns. Since 1990, according to the Center for Responsive Politics, they have given more than $20 million to political campaigns. Lolita C. Baldor, Associated Press 9-28-04

Tribal money and the Indian vote, in some states, South Dakota for example, may be the deciding factor. But in Florida, the location of the first presidential debate, it was an Indian tribe and Indian gaming money that paid for the debate. "Who would have thunk it?"

"We've got German television in the morning, and then CBS is taping for its morning show at noon, but we can fit you in after that," said Rene Nunez, coordinator for the Miccosukee tribe and the University of Miami, sponsors of Thursday's presidential debate. "It's really busy around here." One million dollars buys a lot of attention. That's been the plan ever since university President Donna Shalala approached the Miccosukee tribe 14 months ago. She needed cash to pull off a debate deal years in the works; the tribe wanted to build its reputation as a political and financial force in the community. …At first glance, the idea of a nation as independent as the Miccosukee -- the tribe never signed a peace treaty with the U.S. government -- hosting a presidential debate seems curious. The Miccosukee name won't even be shown in the debate hall at the school's Convocation Center or to the national television audience. On top of that, the tribe makes almost all of its money from gambling, a bane to Gov. Jeb Bush and the state of Florida for years. … "One of the reasons we're sponsoring the debates is to raise awareness of the environment and educate people about our tribe and its history," Chairman Cypress said Monday. "And we want to make sure the next president knows who we are. That's why this is good for us and for the university. John Holland, Fort Lauderdale Sun-Sentinel, 9-28-04

In Washington D. C. there is another story unfolding that has no up spin possibility. The Senate Indian Affairs Committee is investigating two lobbyists for their activities as lobbyists and consultants for and against Indian tribes. The investigation has brought some emails between the two men to light. The utter disrespect for Indian people, tribes, normal business ethics and the law expressed in those emails is beyond belief.
According to the Washington Post, Jack Abramoff and Michael Scanlon collected at least $50 million from tribes. They collected money to stop some tribes from being recognized, for helping to get an Indian casino closed, and money from the same tribe to reopen the same casino.

"IS LIFE GREAT or what!!!" Washington lobbyist Jack Abramoff dashed off that exuberant e-mail to his business partner, public relations consultant Michael Scanlon…men were angling to get hired by the Tigua Indian tribe…Mr. Abramoff was responding to an e-mail about a report in the El Paso paper that 450 casino employees had lost their jobs. …they collected at least $50 million from Indian tribes that operate casinos and sought the pair's help to stay in business. Although the Tigua never got their $60 million-a-year casino reopened, they shelled out $4.2 million to Mr. Scanlon…What the Tigua didn't know, according to a report by The Post's Susan Schmidt, was that just before the pair hit the tribe up for business, they were actively working, on behalf of rival tribes, to shut down the Tigua casino. "We should continue to pile on until the place is shuttered," Mr. Abramoff wrote in a November 2001 e-mail to Ralph Reed, the former Christian Coalition head who was retained (to the tune of more than $4 million) to organize a coalition to oppose several Indian casinos. …Federal authorities are investigating, as is the Senate Indian Affairs Committee, which plans a hearing tomorrow. Whether the conduct of Messrs. Abramoff and Scanlon constituted a crime remains to be determined. That their actions were loathsome is hardly open to question. Editorial, Washington Post, 9-28-04

Here are a few more quotes from the e-mails published in The Washington Post:

"I wish those moronic Tiguas were smarter in their political contributions. I'd love us to get our mitts on that moolah!! Oh well, stupid folks get wiped out."

"I'm on the phone with Tigua! Fire up the jet baby, we're going to El Paso!!"

Scanlon sent Abramoff a Feb. 19, 2002, El Paso Times story headlined "450 casino employees officially terminated" with the message: "This is on the front page of today's paper while they (Tigua leaders) will be voting on our plan." Abramoff's response: "Is life great or what!!"

"Wow. These guys are really playing hard ball. Do you know who their consultant(s) are?" Abramoff responded: "Some stupid lobbyists up here who do Indian issues. We'll find out and make sure all our friends crush them like bugs."

Oddly, as expressive and articulate as Mr. Abramoff seems to be, in front of an American Indian Senator he could only plead the Fifth Amendment. Indian gaming is a high stakes affair; for tribes, operators, states and many others. The stakes are high enough to bring out the worst in people; a person dripping with greed is an ugly sight.

A lobbyist who billed American Indian tribes tens of millions of dollars for work on casino issues refused Wednesday to answer questions from the Senate Indian Affairs Committee. Committee Chairman Ben Nighthorse Campbell, R-Colo., quoted from e-mails in which Jack Abramoff called his tribal clients "morons," "monkeys" and "stupid idiots." Campbell, a member of the Northern Cheyenne tribe, said he was personally offended and asked Abramoff why he worked with tribes if he felt that way. Abramoff refused to answer that and 15 other questions from the committee, asserting his Fifth Amendment right not to testify against himself. A federal grand jury in Washington also is investigating his activities. The Senate committee's staff concluded after a seven-month investigation that found Abramoff and his business partner, Michael Scanlon, had charged six tribes in six states a total of $66 million for lobbying and may have manipulated at least two tribal elections to ensure they would get contracts with tribes. Dee-Ann Durbin, Associated Press, Baltimore Sun, 9-30-04

If Abramoff and Scanlon are the down, then the Tulalip Tribes of Washington are the up. Another slight disclaimer, the Tulalip Tribes were my first client, in March 1990, as a consultant, but no longer is a client. The Tulalip Tribes are located 50 miles or so north of Seattle. In 1990 the tribe operated a small but successful bingo hall and leased some land to Boeing. I asked the tribal chairman, Stan Jones, what the tribe wanted from gaming. He said they wanted to be the first to operate a casino and to be the leader among the tribes in the Northwest. Since then the Tulalip Tribes have opened two casinos, developed an independent village and have led the way for area tribes. The tribes operate 2600 slot machines and are preparing for a new hotel and convention center near a NASCAR track.

The selection by International Speedway Corp. of Marysville as its preferred site to build a NASCAR racetrack has spurred the Tulalip Tribes to accelerate plans for a hotel and convention center. ISC wants to be racing in the Pacific Northwest by 2008. Tribal Chairman Stan Jones Sr. left a board of directors meeting Monday to attend the county news conference. The hotel was discussed at the board meeting. "We were waiting for this," Jones said. "This will really make a difference to the tribe. We're looking at widening roads and having some type of mass transit right to the (racetrack) site." If the track is built, the Tulalips may develop a shuttle system to get people between the racetrack and Quil Ceda Village on the west side of I-5, where people could gamble at the Tulalip Casino or shop. "We would need to be open by the fall of 2007," said state Rep. John McCoy, D-Tulalip. Cathy Logg, Everett Herald

The Tulalip Tribes will reopen today a casino that it closed last year following the debut of its lavish $72 million Tulalip Casino near Marysville. The tribe has spent about $2 million to remodel the newly named Quil Ceda Creek Nightclub & Casino, which will feature about 600 slot machines and 12 game tables. In comparison, Tulalip Casino has about 2,000 slot machines and 49 game tables. The tribe will share profits from the slot machines with four other tribes from whom it is leasing permits for them, said Les Parks, member of the Tulalip Tribes board of directors and project team leader on Quil Ceda Creek. The reopened casino will help the tribes -- Makah, Lower Elwha, Sauk-Suiattle and Hoh -- generate money for uses such as education and health benefits, he said. Christine Frey, Seattle Post-Intelligencer 9-29-04

Indian gaming is not simple, not the law nor the social, economic or political impacts of Indian gaming. But it is here, and many tribes are using gaming as a bridge into the future. Like Tulalip they are building other businesses and expanding their economic base. Unfortunately, there are still people, tribal and non-tribal, who are blinded by greed and willing to do anything to take advantage of the opportunities afforded by Indian gaming. As Indian gaming matures there will be fewer opportunities for the likes of the two lobbyists as more tribal operations like Foxwoods, Mohegan Sun and Tulalip Casino reach out to help smaller, less sophisticated tribes. We can hope that the sleazy snake oil salesmen get their just due and learn a new trade, making licenses plates, leather belts or breaking rocks.