Tribal leaders eye expansion into commercial gaming

February 5, 2023 9:17 PM
Photo: CDC Gaming Reports
  • Buck Wargo, CDC Gaming Reports
February 5, 2023 9:17 PM
  • Buck Wargo, CDC Gaming Reports
  • United States

As needs grow for more and better services, tribal nations continue to pursue casino and business opportunities off their reservations.

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Tribal executives and legislative leaders discussed the issue last week at the Raving Next gaming conference in Albuquerque. The closing session focused on understanding the role of the Tribal Council and balancing the requirements of the entire enterprise.

“I believe the next 30 years will not be easy,” said Raving CEO Deana Scott. “Gaming is going to change the structure (of tribal organizations). But all of the other things you’re doing to enhance that are pretty exciting. We’re seeing tribes take ownership of the future.”

Collectively, tribes are the seventh largest employer in the U.S., Scott said. She called that “pretty impressive.” Tribes are serving a major a role in building economies, not only for the nations themselves, but also communities surrounding them.

A survey of people who attended the conference shows that gaming revenues are responsible for more than 60% of funding for tribal programs, she said.

“As gaming executives look forward to the next 30 years, it’s going to be harder. We’ve grown as organizations and programs and there’s a need for more cash,” Scott said. “How do we ensure that we can provide those services? We have to think differently and start collaborating more. We have to do more, because that need isn’t going away. And for smaller tribes outside the big cities, gaming is their only source of revenue.”

The Cherokee Nation in Oklahoma continues to seek out opportunities, both in gaming and non-gaming, according to Tribal Councilor Joe Deere. The Cherokee just approved a $3.7 billion budget for a nation that has 440,000 citizens.

The Cherokees operate casinos and other businesses in 27 countries to take advantage of $3 billion in federal contracts.

In June, Cherokee Nation Entertainment Gaming Holdings, a subsidiary of Cherokee Nation Businesses (CNB), agreed to acquire the operations of Gold Strike Tunica for $450 million in cash. The deal with MGM Resorts International is expected to close the first half of 2023.

Deere said the Cherokee Nation is landlocked, so they’re looking for opportunities to expand CNB to diversify off reservations and into commercial gaming across the country.

Cherokee Nation Entertainment is the gaming and hospitality company of the Cherokee Nation, the largest Indian nation in the U.S. The company owns and operates Hard Rock Hotel & Casino Tulsa and nine Cherokee casinos, including a horse-racing track, three resort-hotels, three golf courses, and other retail operations. The Cherokee Nation and its businesses employ 11,000 people.

The Cherokee Nation was behind a ballot initiative in Arkansas to allow gaming in four counties and was granted a gaming license in Pope County, along with Legends Resort & Casino. In January, a circuit judge ruled the Arkansas Gaming Commission erred in issuing the license. The tribe is appealing.

“We had to expand and diversify to create more funds from gaming,” Deere said. “It will be our first sportsbook, along with Gold Strike.”

The Pueblo Indian Tribe of New Mexico has also benefited from diversification.

In 2019, the tribe’s Laguna Development Corp. and its Ellis Entertainment LLC made a huge investment by purchasing Ellis Park horse track and gaming parlor in western Kentucky for $11 million.

Last fall, it sold the racetrack in Henderson and rights to build a track-extension facility in nearby Owensboro, the fourth largest city in Kentucky at just under 140,000 population, for $79 million.

Maxine Velasquez, president and CEO of Laguna Development Corp., said the diversification in gaming helps pay for education, health care, elders, an elderly home, and natural-resource protection.

“Last year, we hired an architect and contractor and were moving forward with building a beautiful facility, when all of a sudden I got a call and letter in the mail from Churchill Downs saying we want to purchase you guys,” Velasquez said. “We needed to go to the Tribal Council and ended up selling. It was a great experience and the first major deal I did. It took a lot of work.”

Velasquez said the key is not only doing due diligence, but also communicating with the tribal leaders and members.