Casino’s first year marred by recession, bad weather, high debt and tribal conflict.
Snoqualmie Casino’s one-year anniversary passed quietly in November, met with none of the fanfare that accompanied its opening in 2008.The Snoqualmie Tribe had hoped the casino would bring in an influx of money to the tribe and an elevated standard of living for its 600 Native American members. But the casino’s revenue has been much lower than anticipated, and it has been marred with setbacks, conflict and controversy.
In September, The Seattle Times reported it had obtained an internal memo from a financial consultant for the casino, alerting the tribal council that revenues were a quarter of what was projected.
“The adopted budget for 2009 … has proved to be wildly inaccurate. Gaming revenue is $250,000 a month instead of $1,000,000 a month,” said the memo, obtained by The Seattle Times and written by Henry Flood, hired by the casino as a grants and contract consultant. “A combination of cutbacks and loan funding is imperative to avoid financial collapse.”
Flood, who advises several non-profit groups and Indian tribes from his business in Florida, could not be reached for comment.
Matt Mattson, the Snoqualmie tribal administrator, said the memo was inaccurate, as were other reports that the casino is not doing well.
“[The memo] is an internal issue, I don’t know how it was released and Mr. Flood no longer works for the tribe,” he said.
When asked if the casino’s revenue was indeed at one-fourth of the projections for 2009, Mattson said he could not comment on the figures in the memo.
“The numbers aren’t entirely accurate. In some months that has been the case, but not all months. It’s much more complicated than that,” Mattson said.
Casino spokeswoman Gina Brodie said that no one—including Chief Executive Officer Michael Barozzi—was willing to comment on its financial performance or future predictions.
Mattson said that the down economy has affected its performance but business is increasing.
“Just like all industries over the past year, the global recession has certainly hurt us, but we’re on an upward trajectory,” Mattson said. “Overall, the tribe’s pleased with the casino’s first year.”
None of the 1,100 casino workers have been laid off, he said.
“At this point, the tribe is trying to stabilize its business, become more efficient and increase its market share. It’s tough work,” Mattson said.
Ron Allen, president of the Washington Indian Gaming Association, said that some of the casino’s problems spring from its high debt. The association consists of tribes who own casinos.
The Snoqualmies borrowed $375 million to build the casino through a seven-year loan. The short term and high amount makes it hard for the casino to stay afloat, because more of the casino’s revenue has to pay interest on their loan than if they had a longer-term loan, he said.
“Part of their challenge is that they have a larger than normal debt load that they are trying to handle,” Allen said. “The financial environment forces the tribe into the short term lending structures with a higher debt load schedule.”
Weather and economic circumstances also impeded a fast start.
“They opened at a very bad time, in the middle of winter, then they got burned by a nasty storm which hurt them a great deal. By the time spring hit, their numbers were creeping up because weather wasn’t an issue,” he said.
The recession has caused a dip of 5 to 15 percent in some establishments, while other have remained steady, according to Allen. The affect depends on the location and the tribe. Snoqualmie Casino is at a disadvantage by being several miles from a major a population center and not having a resort onsite, he said.
Meanwhile, intertribal conflict about the casino and tribal leadership continues.
In April 2008, nine tribal members, including former tribal-council members and the former tribal chairman, were banished from the tribe over an election dispute but also in part, the nine members say, due to disagreements over the casino and use of money.
Since the attempted banishment, a new tribal council has been established, and about 65 of the tribe’s 140 employees have been laid-off, according Mattson.
It amounts to a purging in the eyes of Carolyn Lubenau, a former council member and one of the nine members banished in 2008. She said that she and others warned Mattson and the administration of the high debt and untrustworthy financial backers but their calls fell on deaf ears.
“I have never been inside Snoqualmie Casino and I will never go there until the wrongs that have been done to our tribal people are corrected and the land re-blessed,” Lubenau said, adding that she’d originally been excited about the possibilities of improved healthcare and education for the Snoqualmie people, but hasn’t seen the promised fruits.
The banishment, which a federal court overturned last spring on the grounds that it was a violation of civil rights, has been re-established, according to Lubenau and another banished member, Sharon Frelinger, former tribal treasurer who raised questions about the tribe’s audits and expenditures. The two received a letter that the banishment was re-established and would be in place for seven years. During that time, Frelinger said, the banished members could not attend tribal events or talk to the media.
Mattson said that the tribe’s woes—financial and otherwise—should not be construed with the casino’s status.
“The amount of money that’s available to run the casino is a separate issue from the money to run the tribal operations,” said Mattson.
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