NEWH - May 2003 - (Page 27)

indian gaming: developing the latest gaming trend by: Donald Brennan, Nevada Gold & Casinos, Inc. editor: Lisa A. Haude, Paradigm Design Group, LLC OVER THE PAST FIVE YEARS, Indian gaming has experienced tremendous growth throughout the United States. This trend began in 1988 after Congress passed the Indian Gaming Regulatory Act, which allows Native American tribes to engage in gaming on Indian lands without government interference. In addition, the Act specifies that revenues from tribal gaming can be used to support the tribe’s economic development and/or can be donated to charities. As the gaming trend has progressed, developers have often asked how an Indian gaming venture differs from a traditional casino. To answer this question, we recently caught up with Donald Brennan, Vice President of Development with Nevada Gold & Casinos, Inc. and asked him to clarify the following elements: Feasibility & Development When determining if the proposed casino is feasible, a potential developer will need to take into account that most tribal reservations are located in remote parts of the country, and many times they lack water, electricity and other infrastructure. However, development costs can be less expensive because construction materials that are delivered to the construction site are tax-free (if proper procedures are followed). Funding Since Indian land is classified as a sovereign nation, many lenders remain skeptical in loaning tribes the necessary funds since they cannot obtain the land if the tribe should default on the loan. Therefore, it is essential that the tribe provide Waivers of Sovereign Immunity in order to encourage developers to pursue Native American casinos. With these Waivers, larger banks like Wells Fargo and Bank of America are more comfortable in financing the larger, destination resorts/Indian casinos. However, smaller casino developments are still funded by venture capitalists, entrepreneurs, and in some cases with corporation loan guarantees. Types of Gaming Approximately 200 of the 562 federally recognized tribes in the United States actually participate in Class II or Class III gaming. Class II gaming typically includes such games as bingo, pull-tabs, lotto, punch boards and certain card games that are allowed under state laws. However, in Class III gaming, the tribe is able to provide casino-style table games like roulette, craps, poker and blackjack. To operate a Class II or Class III gaming establishment, a tribe must be federally recognized as a sovereign nation. If a tribe wishes to operate a Class III establishment, they must have a compact (legal agreement between the state and the tribe) in the state where they are located. Competition & Profitability In 2000, it was noted that tribal governments earned approximately $10.6 billion in gaming revenues. The Foxwoods and Mohegan Sun, two Indian casinos located in Connecticut, earned revenues that year of $1.9 billion. Considering that the Las Vegas Strip earned $4.8 billion and Atlantic City earned $4.3 billion in 2000, one can clearly see that Tribal gaming can be a profitable venture. Even though these casinos tend to be located in somewhat rural areas, they still must operate a safe and fair operation in order to attract the general public. Indian casinos located closer to urban areas are now being developed as full-destination resorts, including golf courses, hotels, and in some cases retail developments. Design teams continually strive to produce a “bigger and better” theme that can compete with other casino locations. In most cases, the design team will produce a theme that reflects the tribes’ culture. This can be achieved through the use of tribal textures, colors, and 27

Table of Contents for the Digital Edition of NEWH - May 2003

NEWH - May 2003
Contents
Letter From the Editor
Hospitality News
Spotlight on NEWH
Tips on Specs....Chandeliers
On the Road Again
Did You Know?
Ancient Storytelling Comes to Life
Indian Gaming: Developing the Latest Gaming Trend
You Can’t Sue an Indian Tribe, Can You?
Putting the Pieces Together: The Steps It Takes to Develop a Casino
Building the Fantasy
The Icing on the Cake: The Importance of Architectural Millwork in Casino Design
Designing Today’s Casino Resort: How to Make Entertainment Memorable and Distinctive
Casino Advertising: A Sure Bet!
Understanding Code Issues Related to Riverboat Casinos
Purchasing on a Dime
Under Wraps
Small Business Advice
Working With Team Players...
In My Opinion...
Taking the Gambling Out of Specifying Gaming Furniture
Industry Partner Education
Bios

NEWH - May 2003