Rosebud Casino eyes expansion

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MISSION, S.D. - With new leadership at the helm, the Rosebud Casino and Quality Inn anticipate a new look as the tribe prepares to expand its gaming operation, if a new compact with the state is approved.

Earlier this year, South Dakota voters approved higher bet limits and the state allowed tribes as many as 250 machines, leveling the playing field for tribal casinos managers who also want to add more machines.

The casino a few miles north of the Nebraska border in south central South Dakota is eyeing a change in its floor plan to make room for more gaming.

The state has negotiated compacts with other tribes in the region and RST casino management wants to remain competitive.

"Right now we do have fewer (machines) than other tribes. We're hoping for uniformity across the state. It going to be, can we handle 250 machines? We don't really know that yet," said General Manager D'Arcy Bordeaux.

"We're limited to 125 devices and 120 is our limit for operation at any given time. We have 116 slot machines and four blackjack tables. If we have poker, we have to shut down a slot machine or a blackjack table," Bordeaux said.

When it must shut down machines, the casino chooses those placed on the floor by vendors who take a percentage of the money played rather than those the tribe owns.

Even with the limitations, the casino averages about $30,000 a day in revenue and its workers - including those making $6.50 an hour - take home tips of several hundred dollars on a good day, Bordeaux said.

Plans for expansion are in the preliminary stages and are dependent on Gov. William Janklow signing a compact with the casino. Then approval by the secretary of the Interior could take up to 45 days, he said.

"Once we get word on it, then we can move forward with some things we want to do. Our initial plan is to get 20 to 25 more machines. We have to move some things around, but we can do it," Bordeaux said.

"If we can do 250 machines, we're going to put slot machines in the bingo hall. As for bingo, we will relocate it to the entertainment center. It kind of makes sense anyway because the bingo players get food from our deli so they can eat while they play."

Bordeaux said eventually the casino will build another bingo hall with a smoking and a non-smoking section.

"We can create more office space and add more revenue centers. It depends on what the tribe wants to do. We're going to have to do feasibility studies.

The tribe hasn't begun drawing a blueprint yet, but officials are studying who might assist in redesigning the bingo hall to improve the gaming floor plan.

One option would be the addition of another floor with smaller meeting rooms which will give the casino added potential to attract new faces.

The gift shop near the hotel entrance will be shifted nearer the entrance to the casino, allowing greater consumer traffic.

Bordeaux said the tribe will more than likely refinance to access capital for the expansion and shop for lower interest rates.

"We have an existing loan. The interest rate is a little high."

Refinancing now would trim current interest rates by 2 to 4 percentage points. "We're shooting for 7 percent," he said.

While some lenders want collateral, others will consider income as a part of the investment package, he said.

Adding new machines to the floor can be a pricey proposition, but Bordeaux said the cost of the first set of new machines, which have a life span of about five years, is lower than the tribe expected.

"Slot machines on the high end go for about $12,000. The slot machines on the high end alone will cost you about $1.6 million. For the initial 25, our high figure was about $350,000, but they will be coming in about $280,000."

Bordeaux, who talks about the business with the enthusiasm of a youngster shopping for video games, has a sharp mind for dollars and cents. Though he has been the general manager of the casino for less than a year, his finance background has allowed him to streamline the operation.

Now in his late 20s, Bordeaux said he is excited by new prospects for growth and enjoys his role in studying the market place.

Bordeaux began his career at the casino as an assistant general manager and took over as general manager in August. He worked part time at what then was the Farmer's State Bank in Mission while he attended high school. Graduating from college with an accounting degree, he worked in the banking industry for several years in Kansas. He moved back to the reservation in 1996 and became the finance manager for the Tribal Land Enterprises.

"If somebody would have said 16 months ago, 'You are going to be general manager at the Rosebud Casino,' I would have laughed at them," he said.

"You never really know what you are going to be doing next. You have to challenge yourself ."

Bordeaux applied at the casino in 1996, but was offered a lesser job paying $6.50 an hour as a member of the team that counts the money early in the morning. Instead he took another job offer and went to work for TLE.

"I really received a lot of good experience at TLE and that's where I became familiar with the tribe as a business. We had good clean audits.

"I stay out of tribal politics and I try to be up front," he said.

Bordeaux said he considers himself fortunate to have worked in several positions that helped him grow in a finance setting. "A lot of people don't get to work in the private sector and work off the reservation."

He said he feels bringing his skills home, putting them to use and showing people what they can realize from gaining the valuable experience helps tribal members.

"That really benefits people to be able to be on the outside and see what it takes to do the job."

Gaming is no amusement for the general manager who revels in opportunities to follow marketing trends and see which games are most appealing to casino clientele. Games on the floor continue to change and the casino watches trends to add new games that have sparked an interest.

"The games now are more interactive and more entertaining. They are getting to be similar to video games," he said. "It is really interesting what they come up with."

One only needs to walk the floor of the gaming area to see how complex some of the newer machines are. They are far removed from traditional one-armed bandits many think of when they visualize a gaming floor. Some gaming enthusiasts stand by the one-armed bandits, Bordeaux said.

Games now are based on sitcoms and movies, like the "I Dream of Jeannie" slot machine which has the voice of Barbara Eden when players hit bonus rounds.

Paging through an assortment of gaming magazines revealing the latest games and marketing strategies, Bordeaux admits, "A lot of people like the standard nickel machines. Hopefully with more machines, we'll have more variety."

The casino can monitor activity with a computer database that breaks down when the machines are used and how many times they are played, which helps in the decision-making.

Much of Bordeaux's marketing for the casino includes looking at other entertainment options to draw people to the gaming floor. Recent ventures borrowed on a solid foundation created by the company that previously operated the casino, including outdoor activities such as a pow wow and a string of rodeo programs.

Concerts have been a large draw. Last summer the casino held an outdoor concert featuring Creedence Clearwater Revival which sold out early and drew more than 2,000 people to the casino. The tribe made a profit on the concert which Bordeaux says is a challenge because entertainers' fees are costly.

A hard lesson was learned on one promotion, he said. Earlier this year, the tribe had a special promotion including a drawing for a motorcycle manufactured by the Indian Motorcycle Co. The winner didn't claim the bike because he couldn't afford to pay the income tax assessed upon possession of the bike. Instead, the winner took the option of a cash prize of less than half the value of the motorcycle.

The promotion that followed is a drawing for a van, but the tribe has cleared it with the Internal Revenue Service to pay the tax penalty for the winner of the drawing, allowing the recipient to claim the prize without a penalty.

Bordeaux says he continues to look for new attractions to bring in a crowd. Poker and pool tournaments have been successful as well as one-armed bandit competitions, he said.

The general manager said he sees prospects for bringing additional jobs to the area with the expansion including new people working on the construction and inside the facility when its is finished.