The Cherokee Nation takes another step in a 4,000-year journey

February 20, 2023 7:07 PM
Photo: Cherokee Nation Businesses (courtesy)
  • Ken Adams, CDC Gaming Reports
February 20, 2023 7:07 PM
  • Ken Adams, CDC Gaming Reports

The Cherokee Nation of Oklahoma recently finalized the purchase of the casino operations of the Gold Strike, a hotel-casino in Tunica, Mississippi.

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The tribe bought the casino from MGM Resorts International for $450 million. VICI Properties retains the real estate and physical assets. The Cherokee have agreed to an annual rent of $40 million. The lease is for 25 years with three 10-year renewal options.

In 2021, the Gold Strike generated an EBITDAR of $115 million, which does not include the lease payment. The $450 million is a stiff price given the market. Tunica has been challenged since 2008, but the purchase represents an opportunity for the Cherokee to branch out of Indian gaming and Oklahoma.

The Cherokee are looking to expand their business interests beyond their home state. In Oklahoma, the tribe owns and operates 10 casinos, nine under their brand and one as a Hard Rock. Overall, the tribe has been very successful with its casinos. The tribe also owns companies offering consulting, health-science, real-estate, technology, distribution, engineering, manufacturing, construction, and environmental services. In the tribe’s 45 business enterprises, it employs 11,000 people. Still, the core and most profitable business is casino gambling. The tribe’s casinos have provided the means to develop other businesses, including purchasing the Gold Strike for cash.

The Cherokee Nation is in northeast Oklahoma. It borders Kansas, Missouri, and Arkansas, providing access to customers from those three states and Oklahoma; Dallas, Texas, is close enough to be a viable market. The tribe says it invests 63 percent of its profits in businesses that create jobs and opportunity for tribal members. The tribe has 400,00 members, 145,000 of whom live on the reservation. The other 37 percent of profit is invested in tribal programs and services. The tribe’s stated goal with its casinos and other businesses is straightforward: “The Cherokee Nation is committed to protecting our inherent sovereignty, preserving and promoting Cherokee culture, language and values, and improving the quality of life for the next seven generations of Cherokee Nation citizens.”

The Cherokee are thought to have originated around the Great Lakes about 4,000 years ago, then migrated into what is now North Carolina. In the 1830s, the tribe was forced by presidential decree to leave North Carolina and settle in Oklahoma. The advent of Indian gaming in 1988 provided a mechanism for sustaining tribal culture. As with other tribes, the gaming operations have expanded and evolved from bingo halls into increasingly larger and more sophisticated casinos. The tribe’s understanding of gaming and business has evolved as well. That sophistication and the cash from its casinos have allowed the tribe to move into commercial gaming.

The Cherokee is not the only Indian tribe to use casino gambling as a steppingstone into commercial gaming. The Poarch Band of Creek Indians of Alabama, the Seminole Tribe of Florida, the Mohegan and Pequot Tribes of Connecticut, the San Manuel Band of Mission Indians in California, and the Ho-Chunk Tribes in Nebraska and Wisconsin have branched out into commercial casino gambling, in some cases like the Seminole Tribe with its Hard Rock brand quite successfully. In the last year or so, the Seminole, Mohegan, and San Manuel tribes have taken over operations in Las Vegas. Additionally, the Three Affiliated Tribes of North Dakota have bought three separate pieces of land on the Strip.

Other tribes have concentrated on expanding into other businesses and industries, as the Cherokee have done. For example, the Tulalip Tribes of Washington have built the Consolidated Borough of Quil Ceda Village. The village contains a Walmart, Home Depot, Seattle Premium Outlets, Cabela’s, and Olive Garden and other brand-name restaurants, and of course, the Tulalip Resort Casino. The village has the same legal status as the District of Columbia, a federal municipality. Like the Cherokee, the Tulalip are using gaming funds to create more opportunity and employment for tribal members, to preserve their culture and language, and like the Seminole in Florida to buy back as much of their ancestral land as possible.

The Indian Gaming Regulatory Act (IGRA) was enacted to create a framework for legal gaming in Indian Country and to give states a role in the process. The Act’s official purpose was: “1) to provide a statutory basis for the operation of gaming by Indian tribes as a means of promoting tribal economic development, self-sufficiency, and strong tribal governments; 2) to provide a statutory basis for the regulation of gaming by an Indian tribe adequate to shield it from organized crime and other corrupting influences, to ensure that the Indian tribe is the primary beneficiary of the gaming operation, and to assure that gaming is conducted fairly and honestly by both the operator and players.”

IGRA has been successful in meeting those objectives. The Act has given tribes a means of becoming truly self-sufficient and has produced some totally unexpected or anticipated results. Few people other than tribal members would have anticipated that tribes would use Indian gaming as tool to rebuild tribal cultures and regain tribal lands rather than enrich individual tribal members.

Lawmakers have consistently underestimated the strength of community in Indian Country. For the Cherokee, casinos are just another tool in the 4,000-year journal of a nation.