Betting on casinos

The Navajo Nation Gaming Enterprise has secured the means to build all five planned gaming facilities on Navajo land, and says it hopes to open them within months of each other over the next two years.

The plan represents a shift from the gradual tempo originally envisioned by gaming officials, but based on the unprecedented success of Fire Rock Navajo Casino, they feel confident about speeding up the timetable.

And a key group of money managers is putting up tribal money to make it happen.

Originally the plans were to develop future casinos one at a time, but gaming enterprise officials said Tuesday that thanks to a decision by the tribe's Investment Committee, five more casinos will be built in 2011 and 2012 using money withdrawn from stocks, bonds and other securities.

Bob Winter, CEO of the gaming enterprise, said the Investment Committee has agreed to provide as much as $200 million to pay for the construction. The money would come from selling investments that aren't earning well in the recession, and would eliminate the need to seek outside financing.

The Investment Committee was emboldened after seeing how much revenue has been generated by Fire Rock since its opening in November 2008.

While profit figures are not made public, tribal and gaming officials have said revenues at Fire Rock surpass by 200 to 300 percent even the most optimistic projections. Its success has come despite the sluggish national economy.

With the tribe's investments losing hundreds of millions of dollars in the stock market because of the stock market slump, Investment Committee members told gaming officials that using the money to expand Navajo gaming seemed a more sound investment strategy at this time.

Winter said gaming officials are not worried about saturating the market for gaming in this area, because each new facility will cater to a particular type of customer. Since each is geared toward a different clientele, Winter said they will not cannibalize each other's operations.

Fire Rock, for instance, quickly evolved into a playground for tribal members, where 95 percent of the customers are Navajo. While isolated stories of problem gambling have been reported at Fire Rock, the average spending per visit is a reasonable $20-25 and so far there's no evidence of a spike in problems such as loan defaults that some feared would come with Navajo gaming.

Sean McCabe, chairman of the NNGE board of directors, stressed that the revenue projections take into consideration the economic downturn but even these figures showed the tribe would be better off putting its money into casinos, which would generate not only a better rate of return but also hundreds of jobs for tribal members.

Winter said that while groundbreaking on all of the five casinos would take place within months of each other, opening dates probably will be staggered over a year or more because some facilities will take more time to build.

5 sites ready to go

From largest to smallest, the five future Navajo Nation gaming facilities are:

• Twin Arrows near Flagstaff is the biggest development planned and is aimed at the resort crowd. It will include a hotel and conference center, an upscale RV park, and a major Native arts and crafts operation.
• Upper Fruitland, N.M., will get a full casino operation like Fire Rock, although a little bigger with more than 800 slot machines, a sports bar and sit-down restaurant planned. There will, however, be no bingo.
• Navajo, Ariz., along Interstate 40 is the nearest community to the third-largest planned gaming facility. A full-scale casino is planned for a location on Pinto Road, along with a tourist center that caters to truckers and tourists.
• Chinle will be the site of a small Class 2 casino offering bingo and some slot-type machines.
• Hogback, N.M. will host another small Class 2 operation.

Building sites have been chosen and while a couple have some land issues that need to be resolved, none are big enough to delay construction plans, Winter said.

Groundbreaking for the Chinle and Hogback facilities is planned this fall with opening dates by early 2011. The other three casinos are expected to open in late 2011 or 2012.

The Twin Arrows operation is expected to provide 2,000 jobs, Fruitland as many as 400, and Pinto Road about 150 (not including tourist center employees). The bingo palaces in Chinle and Hogback will each employ 60 to 80 people. It's expected that 90 percent or more of these jobs will go to Navajo tribal members.

Winter said Navajo workers at Fire Rock, by virtue of their experience, will be able to apply for supervisor positions at the new casinos.

He said the gaming enterprise has promised to hold jobs fairs in communities near the new casinos, giving local residents the first chance to apply for jobs.

This has two benefits, he noted. It gives chapters some benefit from the casino in their area, and hopefully results in employees who already have housing in the area.

Housing is expected to be a problem at many of the sites - some Fire Rock workers commute 50 miles or more to work. Winter predicts the biggest housing problem may be at Twin Arrows, because housing is expensive in Flagstaff and scarce in other nearby communities so the tribe may have to provide some affordable alternatives.

McCabe said gaming board members are excited to get the opportunity to develop all of the casinos at the same time. They are also pleased in the confidence that the tribe has shown in the board's ability to run a successful casino operation, he said.

Completion of these five operations is expected to conclude the second phase of casino development on the Navajo Nation. Whether there will be more depends on changing public opinion in some chapters.

For example, feasibility studies indicate that gaming would do well at Antelope Point and in the Monument Valley area, but it's on hold because the local chapters have not voted to support it.

Cameron Chapter is another possibility but the problem there is limited water, McCabe said.

Another limitation, Winter said, is that under the gaming compact with Arizona, the Navajo Nation is only allowed to have four major casinos in the state - two once the I-40 sites are developed.

New Mexico doesn't have those restrictions but promising sites are fewer than in Arizona.

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