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Tribal casino Industry 2008

In 2008, the current national economic crisis created serious challenges for tribal casinos. In Connecticut, the MGM Grand at Foxwoods, with its 1,400 slot machines, and the Mohegan Sun, with its more than 6,600 slots, are no exceptions.

The Mashantucket Pequot Tribal Nation and the Mohegan Tribe are facing the crisis head on, and are good examples of how tribes across the country are handling the crisis,

In October, Foxwoods reported to the state Division of Special Revenue that the casino had experienced a $4.6 million decrease in slot revenues compared to the previous year.

Barry Cregan, Foxwoods’ Interim President, said that keeping the tribe’s initial objectives in mind is essential. “The October slot results continue to be reflective of the current economic climate,” he said. “Overall, we are holding our own in an industry facing considerable challenges. We need to stay focused on our commitment to delivering exceptional customer service and positioning our properties for a promising future as the economy improves and consumer confidence is restored.”

Some 700 employees, including Foxwoods CEO, Patricia Irvin, were dismissed this fall in an effort to trim expenses. Michael Thomas, tribal council chairman, said the decision was a difficult one. “We felt it was necessary, given our recent decisions to realign our expense structure in response to the current economic environment.” A number of Foxwoods employees have applied for severance packages, currently under evaluation by the tribe.

Even still, the tribe reported a $14.3 million contribution to the State of Connecticut in October, raising their state contribution to $2.749 billion since January 1993 when they first installed slots.

In September, the Mohegan Tribe stopped construction on its $734 million Earth Expansion project. The project’s 39-story Earth Tower was set to become the tallest building in the state. The Tower, however, along with a 1,500 seat concert hall, restaurants, and other amenities will not be completed.

The project promised to provide 1,200 construction jobs, but Tony Sheridan of the Chamber of Commerce of Eastern Connecticut said the Mohegan’s decision to curtail the project was a prudent move that will protect the jobs of the casino’s 9,000 employees. Gov. M. Jodi Rell pointed to the $20 million decrease in this year’s slot revenue as partially to blame for the state’s growing deficit.

In addition to dealing with economic challenges, many tribes have also had to contend with snags created by opposition from within their respective states. Perhaps the most perplexing objection this year was the position taken by Florida Attorney General Bill McCollum against the addition of Blackjack in Seminole casinos. He claimed expanding the tribe’s gaming operations would place young people visiting the state’s tourist attractions in harm’s way.

“We are a tourist state with a lot of young people visiting,” McCollum stated. “We’ve got Disney World and lots of other tourist attractions and expanding Indian gambling would be a bad idea in my opinion.”

McCollum was unclear on how adding the card game would affect children at other state tourist destinations.

In recent months, the Seminoles, like other tribes, have faced the economic downturn by boosting giveaway promotions. In November they gave away Ford Mustangs – one a day for 26 days – as well as $500 and $300 free play awards, and drawings of cash prizes ranging from $2,000 to $100,000.

Yet across the nation, many states recognize the positive economic influence of tribal gaming operations, and in a number of cases, disputes have been settled satisfactorily.

The Pokagon Band of Potawatomi reached an agreement with the state of Michigan; The Ho-Chunk Tribe concluded an amicable agreement with the state of Wisconsin over monies owed the state; The Shingle Springs Band of Miwok Indians opened Red Hawk Casino near Sacramento, Calif., receiving 11,000 applications for employment from the surrounding community; and when the Cherokee Nation of Oklahoma announced its agreement with Hard Rock Hotel Holdings to attach the Hard Rock brand to their new Tulsa casino and hotel, they received an enthusiastic response from state residents.

Nevertheless, some states are still suspicious of the benefits of tribal gaming.

The Penobscot and Passamaquoddy tribes have been trying in vain to persuade the state of Maine to enter into a compact. As a result, Olympia Gaming, a Las Vegas corporation that recognizes the possibilities of such a venture, proposed a $184 million dollar resort to be built in the state this past year. The proposal was placed before voters during the November elections.

The state’s tribes, characterizing the proposal as an affront if accepted by voters, opposed the Olympia plan, which also would havelowered the gaming age in the state from 21 to 19.

Residents of the state remained true to their convictions, however and overwhelmingly rejected the proposal. Gov. John Baldacci said he “hopes the vote will slow gaming proposals in the state.”

The Passamaquoddy’s, however, are undaunted in their quest for a gaming compact. “We have not given up on a casino or racino as part of our economic development package,” said William Nicholas, governor of Passamaquoddy Tribe’s Indian Township government.