Casino executives and consultants said last Thursday that the commercial gaming industry needs to do a better job of working with tribal casinos, earning their trust and developing partnerships that benefit the tribes, if they want to maintain productive relationships.
The conversation about relationships and partnerships with tribes morphed out of a discussion about technology and the future of gaming at tribal properties.
The discussion, at the Indian Gaming Tradeshow and Convention in Las Vegas, came a week after Caesars Entertainment’s announcement on April 13th that it has signed an agreement with the Buena Vista Tribe to create a 71,000 square-foot Harrah’s-branded facility in Northern California near Sacramento. It will open in 2019.
Mike Salzman, senior vice president and head of Americas development for Caesars Entertainment, said there’s been a breakdown of commercial and tribal gaming partnerships because they’re not sustainable. Changes need to be made and trust developed.
“I think the development model is broken, and we are taking a fresh look at that model,” Salzman said. “There needs to be an alignment of interests and lines of creating value instead of destroying it.”
Partners should show their value and participate in the upside rather than drawing from the base of existing revenues, Salzman said. “It’s a mode we are exploring,” he said. “The existing model should fall by the wayside.”
Caesars Entertainment will initially provide brand licensing and consulting services for a new casino of the Buena Vista Tribe, which will be named Harrah’s Northern California Casino. It will be developed and owned by the Buena Vista Gaming Authority. Once operational, Caesars expects to manage, operate, and maintain the property on behalf of the Gaming Authority and the Buena Vista Tribe.
The $168 million casino will include 950 slots, 20 table games, and one full-service restaurant. Caesars, which has worked with tribal partners for 20 years, said the Harrah’s brand and Total Reward network will increase the earnings potential of the property. It will generate incremental revenue for Caesars without a significant capital investment, officials said.
While many tribes have adopted social gaming technology to grow their business, there are holdouts who want to stick to their core business of slots rather than modernize. Jason Wolf Rosenberg, CEO with American iGaming Solutions, moderated a panel on the future of tribal gaming. The panel’s gaming company executives touted social gaming, esports, and mobile technology for helping grow business and lure customers.
Rosenberg said there’s a lot of action in tribes setting up virtual currency and social gaming properties online, outside of Facebook. “What we have learned from tribal casinos that have launched social gaming is that properties can thrive in the same marketplace where real online money is allowed,” Rosenberg said.
Rosenberg said that a client in Pennsylvania that had been operating a social casino for about a year is considering social gaming that it can promote to anybody in the region, in contrast to the real money it can only take from people who are situated within Pennsylvania.
“They have a ton of people that come there from New York, New Jersey, and Ohio, and they are about to launch a satellite property in Pittsburgh,” Rosenberg said. “You do not want to neglect social gaming because real money is coming. You are still allowed to market to all the people in surrounding state and reward them with physical things. That’s why we don’t want to neglect social gaming.”
Rosenberg, who works with tribal and commercial casinos, said not all tribal casinos see the value of social gaming. He cited one small tribal operation with three properties in two states that wasn’t interested in the latest technology, including social gaming. “They are interested in sticking with their current slot model, which is awesome for about 10 to 15 years and then they have to explain to the tribal council why they can’t afford roads and schools anymore because they their revenue will drop significantly,” Rosenberg said.
Social gaming would be perfect because they could engage their customers in both states to bring them back to a casino by coordinating with all three casinos, Rosenberg said. “Their response was the last thing we will ever do is work with other properties,” Rosenberg said. “Some are afraid of losing their job and do what is best for the industry and their tribes. Your competition will be Dave & Busters and GameWorks, and we need to become an entertainment venue that has gambling in it versus to just being a casino.”
Don Zillioux, CEO for Strategic Development Worldwide, said that such a failure to convince a tribe to take a certain action or adopt technology isn’t unusual, and the tribe shouldn’t be blamed. “One of the things we have encountered throughout Indian country is that people come from the outside and most of the time fail miserably because they fail to understand the core culture of who they are. You can’t walk in acting like you are selling to a big organization like Caesars, a corporation with a lot of history. If you want to make a difference in Indian country, you have to understand what folks are all about. I have folks in the Apache nation teach me the language.”
It doesn’t begin with selling a product but with building trust and respect – then they might be interested in listening to you, Zillioux said.
