Published On: Tue, Aug 4th, 2020

Commercial Gaming Roundtable transcription

 

ONE FEATHER STAFF REPORT 

 

Director of EBCI Communications Chris McCoy sat down with Principal Chief Richard G. Sneed, Vice Chief Alan B. Ensley, Tribal Council Chairman Adam Wachacha, and Council Vice Chairman David Wolfe recently to discuss new opportunities in commercial gaming. 

McCoy: Chief, I want to open up with you to talk about that opportunity and some of the things that happened in the last Council. 

Sneed: Collectively, Tribal Council and Tribal Leadership Executive Committee, we’ve been looking for some time at other opportunities. Investment opportunities to grow the Tribe’s revenue. And one of the areas where we’ve been paying particularly close attention to is commercial gaming. That are a lot of opportunities opening up around in the Southeast, and we want to be involved in that. 

M: What is the definition of commercial gaming?

S: Commercial gaming is different from Indian gaming in the sense of who regulates it. So, Indian gaming is regulated by the Federal government under IGRA and under NIGC, the National Indian Gaming Commission. And, of course, locally we have our regulatory body, the Tribal Game Commission. Commercial gaming is regulated by the state.  Each state, they make their own rules on as far as the amount of revenue that goes to the state, taxation, rules for licensure. But it’s regulated by the state, so there’s a state gaming commission that oversees those operations. 

M: What does economic diversity mean in your communities, and why is it important?

Wolfe: First thing that comes to mind is the health care costs keep going up with the population rising, and those costs are coming by gaming funds. There are opportunities, the school system. You can look around Cherokee and see what we’ve done with our gaming funds. We’ve done an awesome job creating a new hospital, a new school, of course it’s ten years old but it’s new to us and it was far better than what we had. That higher education fund for our kids going to school for four years, that’s awesome. 

M: Chairman, in Snowbird you have a little different economy, being kind of like a satellite community. How important has Indian gaming money been for your community?

Wachacha: It’s really done really well overall. The programs have grown over the years. We got a new complex that is planned to be built in the next two years. So, the programs are expanding, as well as into Cherokee County. But for the community itself, it’s provided a lot more job opportunities in both communities. 

M: How important is it for you to make sure we’re protecting that money and getting the best return on investment?

Wachacha: I feel it’s very important in the fact that we can’t be stagnant. And when we look at trying to expand our operations, because the Tribe – as the Vice Chairman spoke on – is growing. So, with that growing need we need to make sure that we have accommodations at every level. From the frontline employees all the way up to supervisor and manager levels throughout the Tribe and all of its entities. 

Wolfe: For me, I look back in history. I go back to just see what the Tribe relied on before gaming. It was basically tourism and Tribal levy. We’ve come a long way from that. I think it’s our job and our duty to look for other opportunities outside of that and keep in mind that we still have our tourism industry and still like people to come to Cherokee and visit. But we still have to look at other opportunities. 

M: While we’re talking about these expenses and getting out into other industries, we’re not talking about leaving behind what we have here, right? 

W: No, we want to enhance that and always promote our culture and Cherokee. 

M: Vice Chief, what’s your experience with opportunities taken by other tribes?

Ensley: There’s been several tribes in the Southeast that’s got into commercial gaming and it’s done well for themselves, and their tribes, and their members. The Tribe, we’ve talked about diversifying over the years, and it’s a great time for us to get into the market now. As David and Adam said, we got to sustain the revenue to keep our services to our people intact. 

M: Chief, why commercial gaming?

S: Well, one of the conversations we have often in Council when we’re looking at investment opportunities, is what’s the return on investment? What’s the ROI? There’s not another industry that you can get into that is going to give you the ROI that gaming will give you. Indian gaming under IGRA, it’s very difficult to expand that. We have a third gaming license we haven’t activated, mainly because we don’t have any place to activate it at this point. But commercial gaming allows us to get the most return on investment. When you think about spending a dollar and how much we want to get back per dollar, an eight to ten percent return on investment is good. But when you can get margins that are double digits, that’s a much better investment.

M: How do we get into commercial gaming?

S: In the last Council session, Council passed a resolution to engage with a firm, Innovation Capital, they’ve done over nine billion dollars in casino deals over the last twenty years. The Vice Chief mentioned other tribes, Poarch Band of Creek, some of their acquisitions. Bethlehem Sands up in Pennsylvania. They also got into some hospitality and gaming up in Aruba, down in the Caribbean. They own two properties, Innovation Capital helped broker both of those. 

M: So, we’re working with an experienced group here?

S: Oh, absolutely. So, we’re engaged with them. Next steps, they will bring opportunities to us. They’ll help us vet those opportunities, and then they’ll help us negotiate a deal for any acquisition that we may do. 

M: David, how important is it that we take the tribal dollar and get the biggest return on that dollar?

Wolfe: It’s very important to take care of those assets. We’ve been entrusted with those assets and those dollars to increase those dollars to the fullest potential.

M: Is this the area we need to focus on for economic diversity?

Wachacha: I believe so. Just do to the fact that this Tribe has done really well in Indian gaming and it’s something I feel that we can expand into the commercial gaming field. So, that would provide a lot of opportunity away from here and back here at home. We could see Cherokee grow as well as the surrounding counties even more. 

M: Vice Chief, how do you keep the public at ease?

E: I think it’s real important that all the Tribal leaders get out into the community clubs. I’ve seen over the past three years, just with Council members, the Chief, Vice Chief, us going to every community club meeting. If it’s two or three people or fifty people, we got to be out there giving them all the information that they need to understand the best we can understand. We take the information we get from the experts that we hire and put that out into the community so they can better understand where we’re trying to get to. 

M: What do we do now?

S: I want to touch on one thing first. When we talk about return on investment, I think it’s important for our citizens to understand that there’s a long term, more conservative approach which we also do. So, we have the endowments, by Tribal law there’s a percentage of revenue goes into those. That’s more of a long-term investment strategy. This is something that more, I don’t want to say short term, but you tend to get a greater return on investment immediately. Where our long-term investments, percentagewise it’s a smaller return but it’s a much more conservative approach. It’s kind of the long game and the short game. 

M: We’re able to get into this industry fairly quickly?

S: Yes, we are. 

M: Would these be established-type facilities?

S: What we’re looking at, and you have to look at it in these terms too, is you have a green field and brown field. Green field would be a brand-new development, much like when we did Murphy. We started from scratch, did the sitework, and built a brand-new facility. That would be considered a green field. Brown field is an existing facility. You purchase it, you take over operations, and keep right on rolling. 

M: And typically you have cash flow immediately, so you’re able to keep that business moving.

S: And that’s a great way to frame it too. You’re actually buying cash flow. 

M: Where can people reach out if they have concerns?

S: I think the Vice Chief hit on it. It’s incumbent upon us as leaders – all of Tribal Council, Chief, Vice Chief – to be engaged with the community. You know, one of the conversations we have fairly regularly is how important it is for us as leaders to be highly educated on the issue. Whatever the issue is. So that we can then convey that information to our citizenry. It’s a little bit difficult now, because community clubs, most of them aren’t meeting. If people have questions, feel free to call. I’m happy to field any questions. I know my colleagues here are the same way. We understand people have concerns. We live in a time now that’s very challenging because there’s so much misinformation put out there on social media. And unfortunately, even if you put good information out there it’s kind of hard to combat. It just kind of takes on a life of its own. My preference would be is if someone has questions, call. We’re happy to answer those at whatever opportunity we have, given the environment that we have with COVID right now not being able to have large gatherings. To get our information out we will do that. 

M:  Subject matter experts are handling this, is that correct?

S: Correct, and so that was the main purpose of engaging with Innovation Capital. To answer your question from earlier, what the next steps? Next, we will have to begin looking at developing an enterprise board to oversee operations. Because when we’re talking about moving into other states, as I mentioned earlier, the state determines what the criteria is for who can actually be in that position. So, there’s a very deep vetting process, deep background checks, that sometimes take up to six months. Just to get somebody cleared to be in a position of oversight. So, that will be something that will be coming forward as well. There will be an ordinance, a proposed ordinance, to create a separate enterprise board to oversee operations. 

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