Dealing In Differences
BITAC Casino Panel Touts Contributions Of Tribal Properties To Local Communities
With an emphasis on their contribution to the local communities in which they operate, a trio of gaming executives touted some of the benefits of tribal casino properties and commented on how the segment has evolved since it got its start in the early 90’s.
Speaking at BITAC Casino Resorts Live 2021 last week in Las Vegas, the panelists shared their opinions during a panel entitled “Dealing In Differences: The Nuances Between Tribal Properties And Traditional Casino Hotels.” The panel was moderated by Brett Magnan— executive director/principal, CherryTree—who pointed out there are some 500-plus tribes in the U.S., roughly half of which currently have casino operations.
Referring to casino hotels as a “business that sustains a people,” Magnan asked the panelists to detail what they see as the benefits of working for tribal properties.
Steve Neely, general manager, Rolling Hills Casino—which is located in Corning, CA—offered his perspective.
“I enjoy doing it on the tribal side simply because we’re truly changing people’s lives. I’ve been on the corporate side; the share price goes up, they buy a new vacation home or a new car. But it’s pretty exciting when you go watch them [tribal communities] turn on a new well that you were able to help them generate revenue to build or the sewage treatment plant that they’ve never had before. It fulfills me beyond just the financial side,” he said.
Mike Engel, vp, hospitality innovation, Minnesota-based Mille Lacs Corporate Ventures (MLVC), reinforced the point as he shared the story of the MLCV and the Ojibwe tribe’s some 4,700 members.
“We’re serving a family and that’s why we’re in business. We’re not making money so the CEO can buy a new car every year. We’re actually paving the roads, building hospitals, and improving our schools. We’re doing all the things that normal governments do and we’re doing it to self-sustain. We’re doing it for our communities and it’s not just for the tribal members. Our hospitals are open to the community, our schools open to the community. So it’s about being better people in your communities,” he said.
Troy Longwith, vp, hotel operations, Tulalip Resort Casino & Spa—which is located in Marysville, WA—also noted that as a sovereign nation the tribe provides for those that live on the reservation as well as others in the local community as he detailed a demographic shift within the tribe.
“The uniqueness of Tulalip currently is that of that 5,100-member enrollment almost a little over half are under 18 so there’s a generation that’s coming up. Their needs and wants and their experiences are going to be different than those who negotiated these compacts and were the forefathers of the destination and the business. So part of going forward is providing for that next generation those businesses for them to learn and grow into as the tribe grows because the growth has really been exponential in probably the last 8 to 10 years in terms of enrollment,” he said.
The panelists unanimously agreed that the competition among tribal properties has picked up considerably in recent years.
Longwith acknowledged that Tulalip keeps tabs on competition, particularly a nearby casino some 15 minutes away.
“There’s going to be competition in a lot of different areas. There is competition for that local gamer and there is competition for the employees. So one thing we carefully monitor is different positions and pay scales for those positions. We want to be the employer of choice for our area,” he said.
Neely agreed and noted the segment has evolved since its inception nearly 30 years ago.
“We see it picking up too, particularly when you think about the fact that these businesses are extremely successful. The competition is more fierce now than it’s ever been within this space, a lot more tribal properties also have great resources. This industry has just matured to a point now where a lot of your growth is starting to come from someone’s loss,” he said.
According to Engel, “tribal gaming, at least in Minnesota, has plateaued and now it’s about getting more of that market share from your competitors and everybody’s going after it.”
That competition certainly manifests itself when it comes to slot machine licenses. With many states imposing limits on slot machine licenses, tribes often are in a position of having to negotiate with each other for additional licenses.
Longwith commented on their need for additional slots operating within Washington state where there is a 500-slot limit for each property.
“We have the ability to build a resort/casino that will have easy access to visitors. Smaller tribes, such as the Chinook tribe, don’t have that ability to use those 500 slot licenses to sustain themselves so our tribe will negotiate directly with the leaders of Chinook tribe for those slot licenses to add their 500 and give us a 1,000 slot machines on the floor. We’re close to 5,000 so we have agreements with other tribes as well. Not every tribe will give all their allotment to one, some will negotiate with two or three of the larger tribes…So there’s a lot of competition,” he said.
Engel, meanwhile, underscored the differences from state to state. “In Minnesota, it’s a cut-throat business. Each tribe has its own license and we don’t have those partnerships,” he said.
Finally, the panelists were asked about how complex the decision-making process can be with their respective tribal properties.
“We’re actually in a great situation, many of the tribes in Minnesota don’t follow the model we have. As a business arm of the Mille Lacs our CEO meets with the board on a regular basis, but we don’t have to go through them to get approvals. They charge us with operating our businesses and being successful and they measure it and hold us accountable to that. But they stay out of our way and let us do our jobs,” said Engel.
Neely commented on his most recent experience. “Having worked with a lot of tribes ours isn’t bad compared to a lot of places I’ve worked. What we were able to do though is we carved out what we call a decision matrix. I have a tribal council, I don’t have a business board. So there’s key decisions that get made throughout the organization, but we spell out within this decision matrix who is this requester, who is the reviewer, and who is the approver. So I do have a certain amount that I can approve. If it goes above me than my boss, the CEO for the tribal businesses, can approve it to a point and then it has to go to council,” he said.
Neely continued, “I would prefer to have a much higher threshold than I do…They’ve had issues in the past with people that have taken advantage of them and I think it’s one way that they sort of protect themselves from that.”
