Nevada gaming community skeptical about deal
How common is the type of agreement struck recently between the United Auburn Indian Community and Station Casinos of Las Vegas?
In the agreement for a $100 million casino-entertainment complex northeast of Sacramento, to be completed in 2002, Station will manage the casino in return for 25 percent of the revenue.
But the United Auburn Indian Community is not the only tribe to have formed an alliance with outside, or “mainstream” gaming consultants. Lakes Gaming Inc. of Minnetonka, Minn., has an agreement to build and manage a casino near Shingle Springs for the El Dorado Band of Miwok Indians. Also, Anchor Gaming of Las Vegas announced a deal last month to manage a casino for the Pala Band of Mission Indians in San Diego.
And Harrah’s manages three tribal casinos :Phoenix; Topeka, Kansas and Cherokee, North Carolina.
“Where it’s legal and well-regulated, we are in support of tribal casinos,” said Harrah’s Tahoe director of information John Packer. “We have been managing a tribal casino in Phoenix for five years, and are ready to sign another five-year deal. We aren’t at odds with the tribes at all.”
These management deals are viewed with skepticism by some members of the Nevada gaming community. If the tribes are striving for autonomy and self sufficiency, why are they bringing in “heavy hitters” from the casino mainstream?
“This is a funny sort of self-help,” said Steve Teshara, executive director of the Lake Tahoe Gaming Alliance. “With all of these management companies on the scene, you have to wonder what’s going on.”
But critics are not seeing the entire picture, says Dick Moody, the tribal spokesman for the Shingle Springs Band of Miwok Indians.
“If we were to go out and buy the Tahoe Tribune, well OK, but then what?” Moody asked. “How would we run it? We don’t know a thing about the newspaper business. And it’s the same with the casino business. We need to bring in experts to get us started.”
The Shingle Springs tribe hopes to break ground in February 2000, on a project that would include a casino with 100,000 square feet of floor space, a 325-room hotel and six restaurants.
The tribe has brought in Lakes Gaming to manage the casino, in an agreement that would guarantee the management company 30 percent of the casino’s net revenue over the first five years.
“This is a five-year contract, with an option for a two-year extension,” Moody said. “But it will not extend after that. The NIGC (National Indian Gaming Commission) must approve all such management contracts, and will not allow any to go past seven years.”
As part of the agreement, there must be one American Indian casino employee for every one Lakes Gaming employee. But when the contract expires, all the Lakes Gaming employees would leave.
“What it is really is a 60-month training course for us,” Moody said. “Lakes will manage every aspect of the casino operation for five (and possibly seven) years, and then it will be up to us.”
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