July 28, 2004
Wednesday

Gaming is it the answer and is it time Alaska started to take a serious look at it? 

Alaska is one of a very few states in the United States that does not have some form of gaming.  I for one do not believe this makesAlaskaand Alaskans unique but instead mis-informed and in some regards just plain missing the boat.

Gaming is such a lucrative and overwhelming success in the lower 48 that the cities, and states have decided to become more actively involved in the gaming environment.  One can bemoan the somewhat archaic evils of gaming but the fact is, gaming creates very well paying jobs for a lot of people and creates a multitude of subsidiary business's as well as enhances existing business in communities.  Business's such as food service, office product stores, office and printing support business's, transportation, hotels and if done properly gaming can enhance the overall promotion of tourism in any community.  

For several years, I have been writing to and talking to Sealaska and several of the Village corporations about the money that can be made in gaming but to little or no avail.  Recently, Sealaska committed to a casino in the San Diego area and by all accounts this turned out very well for the corporation.  I have not understood why these corporations in Alaskahave not looked to invest in the gaming industry but that is a decision that they have made and while the Tribes in the lower 48 become wealthy Corporations we continue to miss this golden opportunity.  However, this is not about Sealaska this is information for the State and it's citizens, so they can get a feel for what
Gaming has meant not just for Tribes but States as well. 

I will illustrate a few of the facts about the Tribes inWashingtonand than attach a news article from a Seattle Journal that will help to illustrate what gambling has meant for these Tribes in the State ofWashington.

Keep in mind the Tribes inWashingtonhave been in gaming for about 10 years and with the advent of slot machines their net revenues at the Muckleshoot Tribe went from about $24,000,000 a year to about $100,000,000.  They as well as thePuyallupand Tulalip Tribes are far and away the most successful Tribes in the State ofWashington.

I will discuss a few of the benefits that Tribal members derive from the casino's in the State ofWashington. 

• First and foremost are the jobs that are created, each of the three casinos has over 1200 employees, this new job market has hired in excess of 50,000 people throughout the state of Washington.  Although most of these positions are minimum wage positions plus Tips, the average annual salary is usually between $40,000 - $50,000 for dealers and higher for management. 

Beyond employment, the direct benefit to the Tribal members is considerable and I will only discuss a few of the benefits that I am aware of through my association with these Tribes.  Most if not all of these benefits are derived directly from the Tribal casinos gaming revenue. 

• Each Puyallup Tribal member receive a $2,000 per month Tribal distribution from their casino revenue, this is a fact and exclusive to this Tribes decision to allocate their revenue to benefit their members directly.
• Muckleshoot gives their Tribal members $30,000 for a down payment for a house.  Muckleshoot will give qualified Tribal members $30,000 for a down payment and/or down payment and incidental costs for the purchase of a home.  Incidental costs could range from closing costs to purchasing new furniture. 
• Each Tribe provides an annual distribution to Tribal members, this is not unlike Sealaska's annual distribution only much larger.
• The Muckleshoot Tribe just built a nice new day care facility for Tribal children, one of many new facilities for the benefit of all Tribal members and those employees who work in their casino.
• The Muckleshoot Tribe built new elderly housing for their elders as well as new housing for Tribal members, again all attributed to gaming dollars.
• Most of the Tribes pay 100% of their children's education to any college or university in theUnited States.
• The Tulalip Tribe just built a $250,000,000 casino and Shopping Mall with revenue derived from their gaming operation.
• The Puyallups are building a $200-300,000,000 casino on their property next to the Highway I-5.  These Tribes are only able to do this because of the revenue generated from their casino revenues. 
• The Muckleshoots built a brand new clinic for their Tribal members using federal and gaming monies.
• Muckleshoot built a 24,000 seat $4,000,000,000. out door amphitheater so they could bring in first class entertainment near their casino.
• The Tribes also build new Tribal Government and Natural Resouce buildings as well as purchase much of the land back that was sold off from their reservation.
• Muckleshoot gives their members a $.27 per gallon discount on their gas purchase at their new Tribally owned gas station which was purchased with gaming revenues. 

This is just a very brief overview of some of the benefits that are available and have been provided by Tribes, all a direct benefit from their gaming revenues.  When I worked for the Muckleshoot Tribe in 1994 they owned a 10,000 sq. ft Bingo Hall.  Now they own a 124,000 sq ft casino, new 4 story parking garage, amphitheater, two strip malls, gas station, more of their Tribal land, and are negotiating to purchase the Emerald Downs race Track.  This has all come from Gaming Revenues.
 
To further illustrate my comments concerning the Tribes in Washington, I have attached an article from the Puget Sound Business Journal that further illustrates the increased gaming dollar and how big this industry has really become in the State of Washington.

Tribes hit the jackpot
Casinos bring in $770M
 
By Eric Engleman and Deirdre Gregg
Puget Sound Business Journal (Seattle)
Updated: 8:00 p.m. ET July 11, 2004
 
Gaming revenue at the state's tribal casinos grew by more than 17 percent
last year to $769.5 million, according to a new study by Los Angeles-based
economist Alan Meister of consulting firm Analysis Group Inc.
 
That's well above the average 12 percent growth rate for states with tribal
gaming and enough to put Washington into fifth place for the fastest-growing
Indian casinos, behind such heavy-hitters as California.
 
While Washington added only one new tribal gaming facility last year -- the
Emerald Queen Cascades Casino & Resort on Interstate 5 in Tacoma -- the
state's existing Indian casinos underwent significant expansion, adding more
than 2,100 machines and 21 tables, the study found.
 
"Everyone's expanding that can expand," said John Weymer, a spokesman for
the Puyallup Tribe of Indians, which built the new 450,000-square-foot
Emerald Queen complex.
 
Nationwide, tribal gaming has soared since the Indian Gaming Regulatory Act
was passed in 1988. The act recognized the right of tribes to establish
gaming facilities on reservations as long they are located in states with
some form of legalized gambling. Tribal gaming revenue nationwide has grown
by an annual average of 35 percent, adjusted for inflation.
 
Meister's study found that Indian casinos generated a whopping $16.2 billion
in gaming revenue nationwide last year. Tribal gaming facilities employed
approximately 240,000 people and paid $7.9 billion in wages.
 
The biggest Indian gaming states by far were California and Connecticut,
which last year generated $4.2 billion and $2 billion in casino revenue,
respectively. They were followed by Minnesota ($1.4 billion), Arizona ($1.2
billion), Wisconsin ($1 billion) and Michigan ($870 million).
 
Washington came in seventh with $769.5 million in overall tribal gaming
revenue. The state had a total of 28 casinos operated by 21 tribes in 2003.
 
Tribal gaming in Washington has exploded since Gov. Gary Locke signed an
agreement allowing tribes to add electronic slot machines in November 1998.
The number of electronic slot machines has grown from 468 in May 1999 to
15,270 today, said Bob Whelan, senior project manager at ECONorthwest, an
economic consulting firm based in Eugene, Ore.
 
The Muckleshoot Indian Casino near Auburn and the Squaxin Island Tribe's
casino near Shelton were among the first to install the machines, Whelan
said.
 
"A lot of casinos were losing money until they got electronic gaming
devices," Whelan said.
 
Since then, Washington tribes have used their electronic slot machine
revenue to turn tribal casinos into vast entertainment complexes.
 
"It's only in the last couple of years that tribes have had the wherewithal
to build hotels and lodging," Whelan said. "People don't like to lend money
to casinos owned by tribes, because there's no collateral -- you can't
repossess tribal property."
 
Investments in nongaming amenities are now generating significant revenue as
well. Meister's study found the state's Indian casinos boosted revenue from
nongaming sources like hotels, restaurants, shopping, and concerts by more
than 17 percent last year to $83.6 million.
 
"That's definitely been the goal of many tribes: to diversify and not become
solely dependent on gaming revenue," Meister said. With a resort-style
destination, "people stay longer, spend more money, (and) bring other people
who aren't interested in gaming," he said.
 
Nontribal minicasino owners in Washington, who have seen their market share
retreat with the rise of Indian gaming, are rallying behind a proposed
ballot initiative from antitax activist Tim Eyman. The initiative, which
will be on the ballot this November, would allow slot machines to be
installed in minicasinos, bowling alleys and bingo halls where they're
currently prohibited. Under Eyman's plan, the additional slot machines would
generate $400 million a year in revenue, which would be used to reduce the
state property tax levy.
 
Whatever the fate of Eyman's initiative, some analysts say the growth of
Indian gaming in Washington isn't in danger of slowing down anytime soon.
 
"There's a big amount of potential increase in gambling," said Whelan. The
current gaming market, he said, is "not even a third of what it would be if
it were saturated."
 
Meister said the growing sophistication of Indian casinos, the economic
recession and the threat of terrorism have conspired to keep many gamblers
closer to home, instead of traveling to Las Vegas and other gambling Meccas.
That has been a boon to the tribal casinos.
 
"All things equal, casino patrons generally prefer a location that is
geographically closer to home," he wrote.
 
 
Not just the Tribes are benefiting from Gaming revenues, recently Pennsylvania increased their gaming to generate more tax revenue to reduce their property tax for the citizens of that state. This is a recent excerpt from the New York Times:
 
Pennsylvania lawmakers enacted sweeping legislation yesterday that authorizes as many as 61,000 slot machines - the most in any state east of Nevada - for horse tracks, resorts and slot parlors across the state, and will generate $1 billion a year, officials say, for reducing taxes.
 
Pennsylvania officials estimate that within three years, slot machines in 14
locations will pour $1 billion a year into the state budget for reducing
local property taxes around the state and income taxes in Philadelphia.
Some revenue will be used for economic development programs.
State officials contend homeowners in communities that agree to participate
in a new tax-relief program will see their property taxes, which finance
public schools, fall by an average of about $330 a year.
 
Mr. Rendell had to overcome stiff opposition from conservatives, religious
groups and government watchdog organizations who argued that gambling would increase corruption, crime and social problems like gambling addiction and
bankruptcy.
 
Slot machines now account for about three-quarters of casino revenues
nationwide.  Critics argue the entrancing machines take advantage of older,
less sophisticated and poorer people.  But gambling proponents contend that
studies show that many slot players are relatively well educated and middle
class.

This article indicates the new attitude of many states towards the Gaming industry and some realize it is not a question of "Is gaming here to stay" but how can the states support their budgets with the increasing gaming revenue.
 
 
Keep in mind that I am not advocating that every community in Alaska consider putting in casinos because quite frankly a casino in many of the cities and rural villages just would not work or be profitable.  I was recently in Ketchikan and heard things like, "well the tourists off the tour ships will support the casino especially in Southeast".  This of course is a shoot from the hip assessment of gaming without any real knowledge of the industry.  I tried to discourage this attitude because people believe what they want to believe and if this is said often enough it must be true but the current tourist industry will not support a casino in Ketchikan or any other community in S.E. Alaska.  Keep in mind tourists are in Alaska to see Alaska, if they wanted to see a casino they could go almost anywhere in the lower 48 and visit a casino.  That is not to say that a different form of Tourism could not be developed around the casino industry, it is just not the tour ships. 
 
I write this to give Alaskans something to ponder and think about when I hear about the increase in taxes and tying the local economies to one industry "the tour ships".  As many Tribes in the lower 48 have started to understand, you must diversify your interests to create meaningful jobs for the citizens and to improve and enhance their communities with other business opportunities.  Just think if Cape Fox had a casino and filled their hotel and the other hotels in Ketchikan with out-of -towners and or was able to build a convention center that could bring in meetings every week.  Would the downtown curio and jewelry stores shut down during the winter months, would the local restaurants close and/or slow down or would the taxi and rental car business flourish in the difficult winter months, would the shopping centers do a better business during the winter months or would many of these business's stay open and provide year round employment.  I guess that is some of the questions you should be asking yourselves when your state considers gaming. 
 
Gaming is not the answer and may not even be the solution to many individuals in the State but almost every other State in these United States has come to realize that gaming is not going away and may not be the cure-all for State budget woes but it certainly is one of the steps toward economic problem solving. 
 
I would encourage the Corporations, Alaskans and Alaska to take a very long and objective look at Gaming in the United States and see that it has improved the quality of life for many people and is no longer the dark card room of the old pioneer bar, or the quiet and secluded games of the fraternal clubs but instead are usually first class environments that are run by entrepreneurs that understand this entertainment industry.
 
If this is published in the sitnews, I'm sure to hear comments about crime and the associated tearing of the moral fiber, which in general are not true and are a by product of a long ago history of gaming and the movies.  I will review all the comments and attempt to address the issues.

Just a short background about myself.
 
I was born in Ketchikan and was a former Chairman of the Ketchikan Indian Corporation.
I ran Three Tribal Casinos in the State of Washington the Noocksack, Skokomish, and Puyallup casinos.  I helped the Muckleshoot casino walk through the administrative process in this state and Washington D.C. for starting up their casino operation.   I have provided consulting services for other Tribal and non-Tribal casinos in the State of Washington.  I have owned and Managed two of the mini-casinos in the State of Washington and I currently am an owner and manage the Highway 9 Casino in Lake Stevens,Washington. 

Randy Williams
Lake Stevens, WA USA

 

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