It’s 2:30 on a blustery midwinter Tuesday afternoon at the Emerald Queen Casino & Hotel in Fife. The casino’s parking lot is nearly fender-to-fender full of cars, and two floors of the parking garage are jammed.
Inside the casino, converted from a modest Best Western hotel, the chairs and stools are well populated with customers – many of them retired – feeding their $10 and $20 bills into the slots.
Welcome to one of the most profitable gambling operations in America, at least according to its owners, the Puyallup Tribe of Indians. The tribe’s gambling operations will create enough profits to provide the tribe with more than $105 million in total cash payments this year plus enough extra funds to help fund the tribe’s extensive social welfare, health and education programs.
The tribal casino in Fife, bookended by strip malls and RV sales lots, and its companion casino less than two miles away, the Emerald Queen Casino I-5, are prodigious profit-makers even during the deepest economic decline since the Great Depression, said Frank Wright, Emerald Queen’s general manager.
The Puyallup tribe’s continued profitability comes at a time when nontribal gambling operations nationwide are reporting tough sledding. Even some of the nation’s highest-profile Indian gambling operations reportedly are struggling to pay their debts.
In Atlantic City, for instance, the amount of money spent in the casinos has fallen by 30 percent over the last four years, according to a study by Spectrum Gaming Group.
In Las Vegas, the nation’s gambling Mecca, gambling revenue was down 9.8 percent in 2009 and up only 1 percent from the 2009 low in the first nine months of 2010.
IN THE MONEY
Because tribal casinos don’t report their financial results publicly, it’s difficult to verify Wright’s statements, but there is ample anecdotal evidence that the tribal gambling operations are enormously lucrative.
Consider these facts:
• Together, the two casinos generate enough profit to bankroll the majority of the cost of paying every member of the 4,221-member tribe a monthly dividend of $2,000. And the number of tribal members continues to rise every year.
• The tribe paid each of its 2,500 or so gambling employees a $1,000 bonus last Christmas. Most casino employees are receiving a 3 percent cost-of-living bonus this year, Wright said.
• The tribe’s gambling income helps fund tribal schools, day care operations, elder centers and college educations for tribal members. Tribal members have attended some of the nation’s most prestigious and expensive universities thanks in part to the Puyallups’ gambling income.
• The tribe annually gives millions to charity and for public purposes. It has helped finance Tacoma’s Fourth of July celebration and the annual Daffodil Parade.
Tribal gambling revenues also have bought firetrucks for local fire districts and paved roads to provide casino access. The tribe last spring pledged $1 million to help fund new emergency departments for MultiCare Tacoma General Hospital and Mary Bridge Children’s Hospital & Health Center.
• The tribe has nearly as many employees – 3,500 – as it has members, raising it to the top ranks of Pierce County employers.
In comparison, the Port of Tacoma, one of the most powerful business entities in the South Sound, employs 238 workers, though the port creates thousands more private-sector jobs at its terminals and on its property.
Despite the tribe’s obvious success as a business enterprise, not everyone believes big casinos are a positive net influence for a community.
The Stop Predatory Gambling Foundation says a casino’s gain is other businesses’ loss. “Casinos milk existing wealth rather than create new wealth. Most casinos attract 80 percent or more of their market from within a 35- to 50-mile radius, using gambling profits to cannibalize existing entertainment, restaurant and hotel businesses,” says the foundation. “As a result, it destroys other jobs in the trade area and eliminates their sales, employment and property tax contributions.”
Tribal spokesman John Weymer said that the local casinos keep money in the local economy that might have gone to Las Vegas or to casinos in other counties. The casino’s income distributed to tribal members and casino employees ends up being recirculated locally, he said, as the beneficiaries of those profits buy goods and services here. Tribal per capita payments have been a benefit to local governments, he said. No tribal members are on welfare, and the tribe pays many of the social service costs for tribal members.
The Stop Predatory Gambling Foundation says casinos also help feed addictive behavior. Gambling addiction cases rise near casinos after they open their doors, the foundation says studies show. The convenience of those local casinos makes giving in to gambling urges just that much easier, the group says.
Weymer said the tribe’s casinos watch carefully for signs that customers are out of control with their gambling. It bans those who show signs of addictive gambling and will even honor customer requests to not allow them into the casinos in the future. The tribe spent $409,000 to fund gambling treatment programs to help those with destructive urges to bet.
STEADY GROWTH
Though the tribe itself keeps its balance sheets private, documents from the National Indian Gaming Commission, the countrywide agency that polices tribal gambling operations, and a leaked 2009 study commissioned by the Puyallup Tribal Council give outsiders a peek at the size of the operations.
In a 2006 letter to Puyallup Tribal Chairman Herman Dillon Sr., the gaming commission complained that the tribe was spending more than allowed on its so-called per capita payments to tribal members. The commission said the tribe’s net gambling revenues after expenses in 2003 were $92,644,827.
The tribe’s profits grew steadily for the next two years, according to the commission’s letter. In 2004, the tribe made $108,228,719 on its casinos and a bingo hall, B.J.’s Bingo, operated by a tribal member who paid taxes to the tribe.
In 2005, net revenues rose to $134,045,095, the commission wrote in its letter.
By 2007, the tribe’s gambling operations brought in gross revenues of $275.5 million, according to a report prepared by a consulting firm hired by the tribal council to report on the tribe’s gambling operations. That report was leaked to The News Tribune.
To put those figures in perspective, the tribe’s gross gambling revenues in 2007 are more than 2.5 times the Port of Tacoma’s projected operating revenues four years later. Wright’s salary – widely rumored to be more than $500,000 – is twice that of Port CEO John Wolfe, although Wright presides over far more employees and a larger budget.
Wright, in a rare interview in his office in the tribe’s Fife casino, said the gambling revenues have risen by double digits every year but in 2009, when the Great Recession cut growth to 7 percent.
The growth curve was back on track in 2010 with profits ahead of 2009 by 15 percent, Wright said.
OTHER STATE TRIBES
Susan Arland, public information officer for the Washington State Gambling Commission, said the net receipts have continued to grow for other Washington tribes too. The figures gathered by the commission speak for themselves, she said.
While statistics from individual tribes are not available, numbers from the gambling commission show tribal gambling revenues continue to climb even during hard economic times. The state’s 28 tribal casinos generated net receipts (the amount wagered minus the amount paid out for prizes) of $1.48 billion in 2008, $1.57 billion in 2009 and $1.75 billion last year.
Those increases for tribal operations have come as rival gambling activities have dwindled. During that same three-year period, for instance, horse racing gambling receipts fell from $38.3 million to $30.6 million.
Lottery net receipts have dropped from $206.2 million in 2008 to $199.2 million last year. Card room net has dropped from $277.8 million two years ago to $228.6 million in 2010. During that same period, the tribal slice of the state’s gambling revenue pie grew from 70 percent in 2008 to 77 percent last year.
In 1996, when tribal gambling operations were just taking wing, tribal gambling casinos had net receipts of $50 million and just 10 percent of the gambling business in Washington.
PRIME LOCATION
The tribe can credit its reservation’s urban location abutting the state’s main north-south artery with giving it visibility that few other tribes can match.
The tribe in 2003 unveiled an ambitious plan to turn the I-5 site into an elaborate entertainment complex arrayed around a man-made lake. The complex was to include a waterfront hotel, a new casino and other entertainment venues such as a movie multiplex.
But the tribe quietly canceled that plan in favor of incremental improvements to its existing properties and the acquisition of the Fife hotel.
Part of the reason the tribe backed away, Wright said, was that the $600 million cost of the lavish development would have required extensive borrowing.
That borrowing would have ceded some control to the bankers who financed the development, something that made tribal members, used to governing their sovereign nation themselves, decidedly uncomfortable, he said. The I-5 casino was expanding using huge tent-like structures instead of brick-and-mortar buildings. The tribe has been deliberately conservative in investing in new structures, Wright said. Some gambling businesses, both tribal and non-tribal, are finding that huge debts assumed for new buildings during more prosperous times are putting them in a financial corner, he said.
“We could probably go out and borrow a billion dollars tomorrow without much trouble,” Wright said. “But would we be making a mistake that would haunt us for years?”
The plans to build a newer and more expansive operation on the I-5 site aren’t dead, Wright hinted.
The tribe, he said, has looked at expanding the gaming campus toward Portland Avenue with the idea of creating a more well-rounded entertainment operation with attractions such as movies and more restaurants.
‘A MEASURE OF PROSPERITY’
Puyallup Tribal Council members Nancy Shippentower-Games and Bill Sterud say the gambling operation has been a blessing for the tribe. It has given tribal members access to a cafeteria of important services and opened up educational and business opportunities to tribal members who before gambling spent decades struggling with poverty and discrimination.
Gambling has created jobs and education opportunities that tribal members had only dreamed of before the operations began.
The tribe’s gambling operations, Sterud said, have made the tribe a substantial player in the Tacoma community and brought new income to local businesses both Indian and non-Indian. “It’s brought tribal members a measure of prosperity that they’ve long deserved,” Shippentower-Games said.
John Gillie: 253-597-8663
john.gillie@thenewstribune.com
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