Cherokee chief candidates debate tribe’s dependency on Harrah’s

Diversify is the buzzword in Cherokee, where candidates in the upcoming primary are facing off over how to move away from Harrah’s Cherokee Hotel and Casino as the tribe’s sole breadwinner.

With the primary just a month away, five candidates for principal chief and four for vice chief have been making the campaign circuit to local community clubs and other candidates’ forums. They’ve been pitching all manner of alternative revenue streams, from tribal stores to eco-tourism, to reduce the tribe’s dependence on revenue from Harrah’s. Currently, the casino is responsible for 87 percent of what the tribe takes in annually.

Patrick Lambert, who narrowly lost the chief’s seat in 2007 by a mere 13 votes, said that it was time for Cherokee to move on not only from sole reliance on Harrah’s, but also from the business model that sustained them in the decades before the casino’s arrival.

“We need to get away from these rubber tomahawk type shops,” said Lambert at a candidates’ forum last week, hosted by the Junaluska Leadership Council, a youth leadership program for Cherokee high school students.

He pointed to towns such as Asheville, Waynesville and even nearby Bryson City, where strip malls and kitsch shacks have given way to more upscale boutique and artisanal shops, attracting a wealthier and more modern clientele. This, he said, should also be the way of the future for Cherokee.

Sitting Principal Chief Michell Hicks suggested a similar path to diversified revenue, but proposed that Cherokee play to its strengths, namely their long history of producing unique, high-quality arts and crafts. It would be impossible to compete with tourist havens Gatlinburg, Tenn., and Pigeon Forge, Tenn., both just over the mountain, said Hicks, so the wise path is to focus on what other tourist towns don’t have.

“We don’t have the land base to compete with these places across the mountain, so we have got to create a specific market. We have to display in the right way our abilities. That’s how we market Cherokee, that’s how we recreate who we are as a people,” said Hicks. “I think the arts and the crafts is where this town is going.”

Newcomers Gary Ledford and Juanita Wilson both advocated strongly for putting the local economy back into local — and even tribal — hands, stopping the influx of outside business onto the reservation.

“It’s time to stop trying to bring in retail businesses and people who don’t care about us. Why not invest into our people here?” asked Wilson.

Ledford echoed those sentiments, suggesting a tribal alternative to Wal-Mart, so shoppers could pump their money back into the reservation instead of away from it, or tribally run waterparks, zoos and other tourist attractions.

Though there are a multitude of answers to the diversification question, there’s no doubt that it will continue to be a central theme of this year’s election. On some level, all of the principal chief candidates have included it as part of their platform.

Nearly everyone advocated for bumping up the tribe’s participation in Section 8 contracting, a federal program that helps bring a range of contracts to Native American tribes.

And then there’s the debt.

The Eastern Band of Cherokee are in the hole for nearly a billion, and about 60 percent of that is tied up in the massive new expansion under way at Harrah’s.

Of course, a chunk of the debt was laid out on the new, state-of-the-art school complex opened last year, but it’s the casino that’s gotten the lion’s share of the money.

And so far in the campaign, the question has been asked more than once, how and when will the tribe get rid of it?

Most of that grilling, of course, goes to the current chief, Hicks. He’s a two-term leader, so much of the debt has been racked up in the eight years since he took office.

And when asked about his plans in the candidates’ forum, he laid out the bold claim that he would eradicate the debt entirely in the next four years, leaving the tribe debt free when he left office.

Though he didn’t get into specifics about how he planned to dispatch the debt, he did note that part of the plan included diverting more of the casino’s cash to pay its own and other debts.

“As we roll through and increase the expansion, addressing the debt is going to be done through the cash flow,” said Hicks.

But when asked why he didn’t put large-scale projects such as the casino expansion and school complex to a referendum, Hicks didn’t directly answer the question.

“If you look at the things that we put on the ground, in my mind, that’s not spending money, it’s investing in our future. We’re making the services better, we’re making sure that jobs say intact,” said Hicks.

Meanwhile, challenger Lambert said that the way out of debt was fiscal conservatism, avoiding debt increases, softening the regulatory environment to entice in new businesses and possibly even creating tribal utilities like wind and solar power to offset the debt.

The primary election, which will whittle the field to two for both principal and vice chief, is set for July 8. And in a still-troubled economy, it may be the two heralding the best financial future that make the cut.

Cherokee hopes for dealers as casino expansion debt looms

Principal Chief Michell Hicks hinted last week at a renewed effort to bring live dealers to Harrah’s Cherokee Hotel and Casino, in a ceremony renewing the management contract between the Eastern Band of Cherokee and Ceasars Entertainment.

At an event christening the first phase of the casino’s $650 million expansion project, Hicks said the tribe continues to lobby Gov. Bev Perdue to allow live card dealers at Harrah’s. Currently, the state limits the tribe to electronic gambling only.

“We’ll continue to push her to do the right thing,” said Hicks, who is running for a third term for office this year. Hicks said he hoped the governor would wake up and “smell the roses” on the issue, but later said that such negotiations were an ongoing process rather than specific haggling with the state.

“The Eastern Band of Cherokee is continually trying to impress upon all elected officials and state leaders the importance and value of an expanded gaming enterprise,” Hicks said in a later statement. “We maintain a cordial and productive relationship with the Governor’s office and the state legislature officials and look forward to continuing that relationship.”

Negotiations for live dealers and table games — slot machines, craps, roulette and other Las-Vegas style games in addition to live card dealers — stalled last year when a video poker company brought suit against the state. The suit claimed the governor had no legal right to negotiate with the tribe for increased gaming freedom. The same company hamstrung talks in 2009 with a separate suit, which charged that allowing video gambling in Cherokee, but nowhere else in the state, was illegal and unfair.

Harrah’s General Manager Darold Londo said that while the casino wasn’t involved in talks to bring the stepped-up gaming to Cherokee — that’s between the tribe and the state — it would certainly be a boon to the business if it came.

“I’d like to think that we would offer a full-service casino experience,” said Londo. “With our proximity to Atlanta and Charlotte and Knoxville, where you have people that fly to other places to play those games, if we offered those things they could come to Cherokee instead.”

The tribe’s renewed interest in negotiating comes at a time when casino distributions are down — 16 percent according to Hicks — though he and Londo both said they’re hopeful the new expansion, which includes expansive luxury suites for high rollers and is the largest construction project in the Southeast, will crank up revenues again.

As the primary election for principal chief draws closer, however, many in Cherokee are asking how the tribe can pull its focus away from Harrah’s and diversify its revenue portfolio.

Currently, 87 percent of the tribe’s income is generated by Harrah’s. The proceeds are split evenly, with half being divvied up among tribe members and the other half funding tribal operations and programs.

Hicks himself has said that the tribe needs to move away from the casino-as-cash-cow model, and a central tenet of his platform is eradicating the debt.

The Eastern Band now hold almost a billion dollars in debt — $650 million of that is from the major expansion underway at the casino, an endeavor approved by tribal council in 2007.

Critics, including opponents running against Hicks for chief, have questioned whether it was wise to take on so much debt.

Hicks said he has a plan to eradicate the debt completely within the next four years, though he hasn’t spelled out the details of how he’ll do it.

Moving forward, he said, the tribe should look less to gaming and more to its historical traditions, especially arts and crafts.

“To generate gross receipts you’ve got to create business, and we’ve got to change our view of what Cherokee is about,” said Hicks. “We’ve got to get creative by using the thing that we’re better at than anybody else.”

While he conceded that Cherokee couldn’t compete with tourist Meccas of Gatlinburg and Pigeon Forge — they just have less real estate to work with — their selling point is the deep cultural heritage and quality craftsmanship the Cherokee bring to their crafts. This, he said, should be the basis of the new, diversified Cherokee economy.

But even as the call for fiscal diversity is made on all sides this election season, Hicks is still behind the push for live dealers, saying it would bring more jobs and dollars into the economy and help decrease the debt he’s promised to demolish.  


New suites cater to the high rollers

The crowning touch of Harrah’s new hotel tower is its range of newly opened luxury suites, reserved for casino high-rollers and VIPs.

The suites feature expansive mountain views, designer furnishings and subtle touches of opulence, like TVs in mirrors, marble logless fireplaces, 5-person Jacuzzis and wrap-around porches. Some even sport names like Crisp Hydration

The 21-story Creek Tower, the third hotel tower on campus, is part of a larger $650 million expansion of the casino.

The expansion includes a 3,000-seat entertainment venue that opened last fall, an 18,000-square-foot spa, Asian gaming room and additional poker room and will double the footprint of the casino floor.

New restaurants and retail stores will bulk out the space, too; Southern kitchen queen Paula Deen installed one of her renowned restaurants there earlier this year, while Italian chain Brio and the Ruth’s Chris steakhouse franchise are scheduled to move in by the end of 2012.

It’s currently the largest hospitality expansion project in the Southeast and, when finished, it will boast the most hotel rooms in the Carolinas.

The Eastern Band of Cherokee contract the casino’s management to Caesars Entertainment, which runs more than 50 casinos and seven golf courses across the globe. Harrah’s Cherokee has been in business since 1997 and opens its doors 24 hours a day.

Big Stakes at Harrah’s Cherokee Casino

Of the many games that grace the floors at Harrah’s Cherokee Casino, poker might be the most universal. From casino floors to living room floors, the World Poker Tournament estimates that nearly 60 million Americans play the game. Even the president plays poker.

And now, any one of those 60 million will have their own chance at the game’s holy grail, the World Series of Poker.

This month, the casino will be hosting its first-ever World Series of Poker event, a 10-day poker extravaganza that culminates in two large tournaments and a 10-player final. The lucky winner of that game will go home not only with winnings, but a coveted slot at the prestigious World Series of Poker main event in Las Vegas. They’ll even be flown to Nevada, courtesy of their winning hand.

Ron Hager, director of table games for the casino, said that in the two years they’ve been offering the game, popularity among patrons has soared.

“They’re always asking, ‘Why don’t you have the big tournaments?’” said Hager. “Then there’s the added appeal of the World Series of Poker. It’s like every poker player’s dream.”

Indeed, that’s the appeal of this event: any player can become a Cinderella story. They just need the skills and, of course, that vital measure of luck that makes a good player a winner.

Although the poker at Harrah’s Cherokee isn’t exactly like the real-deal main event the WSP puts on in Vegas — it’s an electronic set-up, sans live dealers, thanks to some legal agreements the casino has with the state — Hager said that the players aren’t fazed. Some, claims Hager, even purport to like the electronic version better than the real deal. There are fewer errors.

“The players that play it, they all say it’s a heck of a lot better than you ever think it would be. People really like it,” said Hager.

And, he said, that claim is proven by the multitudes who are flocking to Harrah’s tables.

“We started with four tables, went up to seven tables after about two months, and increased to the 10 tables we have now. On weekends and holidays, 10 tables isn’t nearly enough,” said Hager.

In recent years, the game has seen a surge in popularity, thanks to events like the World Series of Poker and other televised matchups that bring the quiet drama of poker out of smoky back rooms and casinos and into America’s living rooms.

The game has the hushed, measured qualities of golf — patience, shrewdness, strategic calculations and a certain amount of bravado and luck are what make winners. But poker, unlike golf, offers everyday players the same shot at glory as the big-name players, no preternatural athletic prowess required.

As Hager said, it’s every poker player’s dream, and as the game gains a following, it gains a lot more hopefuls, too.

The World Series of Poker started in 1971. The headliner that year — the $10,000 Texas Hold-‘em tournament that’s become the star-studded spectacle of the poker world — had six participants. The numbers languished around the lower end of the size spectrum until 2003, when the event hosted 839 players. That was the year Chris Moneymaker won. He was a 27-year-old comptroller/restaurant worker who won the big pot by qualifying through an online poker site. He was young and fairly portly. He wore baseball caps. He was everyman. And he walked away with $2.5 million.

And that’s also when poker’s star began to ascend.

By 2006, the WSP had more than 8,000 hopefuls playing hands, an increase of more than 1,000 percent in just three years.

Last year, the tournament was down slightly to around 7,000 players, but interest in the game is clearly still blooming, even with the federal indictment handed down earlier this month against the three largest online poker sites on the Internet.

Moneymaker was proof that poker, unlike many other sports, doesn’t need extensive training from childhood, wealthy parents, the right build or the right coaches. It just needs the right hand in the right hands.

Moneymaker is set to appear at the Harrah’s event, which will, in itself, be a draw. Since his watershed win in 2003, he’s played in a plethora of tournaments, but he’s also parlayed his unique rise to stardom into a business opportunity with appearances at poker events worldwide.

Hager and his team are hoping that Moneymaker, and the ethos he represents, will bring in players to their event that might not otherwise frequent the tables. Though their pre-registration isn’t high, Hager said that’s normal and not something they’re particularly worried about.

“Amazingly enough, 60 percent of the people that register for a tournament do it in the last 30 minutes before the tournament starts,” said Hager.

So if you’re still honing your online skills getting ready for the big day, you’ve still got time. And if watching is more your speed than playing, there will be large screens and special coverage set up inside the casino for spectators.

And who knows? You might just be watching another Moneymaker in the making.

 

The schedule throughout the 10 days of WSOP includes live action tournaments and events for poker players of all types. Highlights include:

• Friday, May 6- May 8 — $550 buy-in multi-day tournament and final on Sunday, May 8

• Monday, May 9 — Omaha PL Hi/Lo $120 tournament

• Wednesday, May 11— $225 Carnival PokerPro Challenge Cruise Event

• Thursday, May 12 — $60 No Limit Turbo Hold’em event

• Friday, May 13-Sunday, May 15 — $1,075 buy-in tournament, winner receiving $10,000 seat at the 2011 WSOP in Las Vegas and a cash prize.

Legislation would give Tribal ABC Board more authority

Legislation that would bring alcohol regulation in Cherokee completely under tribal control is now working its way through the General Assembly.

The Eastern Band of Cherokee Indians established its own Alcoholic Beverage Commission in 2009 following a resolution to allow alcohol sales at Harrah’s Cherokee Casino, and now the tribe is lobbying for recognition by the state.

The Tribal ABC Board controls the permits it gives to Harrah’s as well as the sale and distribution of alcohol at the casino. Now, Harrah’s must get a permit from the state, in addition to the tribal permit. With these bills, the tribe is trying to change that.

“Right now, they don’t recognize any of the ordinances other than their own. They only recognize towns, counties and townships,” said Bob Blankenship, chairman of the Tribal ABC Board. “We want them to acknowledge our authority, and we want to eliminate dual permits.”

And the issue is not just permitting, but enforcement. The Eastern Band has its own task force for alcohol enforcement, with two full-time officers on duty.

Because Cherokee is a sovereign nation, the state can’t enforce its permits there; they don’t have the jurisdiction. So the tribe is already doing it for them.

Now, they’re asking for full control of it, legally, instead of just operating on an ad hoc basis.

For Sen. Jim Davis (R-Franklin), who introduced the bill, it’s a local issue.

“I signed onto it because I believe in local control,” said Davis.

Principal Chief Michell Hicks said that he’s on board with the bill for the same reason.

Currently, there is nothing in the North Carolina alcohol statutes which specifically addresses tribal sovereignty and this bill will correct that deficiency.”

The measure has the backing of the Tribal Council, as well. In reality, the law will do little more than formalize the procedures already in place, and get rid of redundant permits.

What it won’t do is expand alcohol sales on the reservation.

Currently, Tribal ABC can legally issue sale permits to one place: Harrah’s. They can give one-time permission to serve alcohol at special events and issue brown-bag permits that allow patrons to bring their own — the Holiday Inn in Cherokee has had one since 1984 — but they still can’t let anyone on the reservation sell alcohol outside Harrah’s.

This means that, not only can other restaurants and shops in Cherokee not sell to customers looking to buy, Harrah’s itself has to take its money elsewhere, too. So ABC stores in neighboring counties are raking in revenue keeping the casino well stocked.

To change that, said Blankenship, another referendum would be needed to broaden the scope of his board’s authority.  

The idea of sales elsewhere on the Qualla Boundary, however, has been bandied about before and it has recently resurfaced. The Cherokee Chamber of Commerce sent out an informal survey, asking members to weigh in on the issue, and Chamber Executive Matt Pegg said that many seemed to be in favor of letting other local businesses get in on the alcohol game.

For now, though, said Blankenship, his board will be happy just to be recognized by the state for what they already do, without raising the question of whether they should do more.

Cashing in: Tribe teaches teens to get smart with casino windfall

This year in Cherokee, a major change will quietly work its way into law, causing little fanfare but marking a historic shift in policy towards the casino profits that, for 15 years, have been divided among all members of the Eastern Band of Cherokee Indians.

After April, teenagers will be required to go through financial training, before getting their share of the money, a measure that’s the first of its kind among Native American nations.

Principal Chief Michell Hicks says he’s pretty pleased with that decision, and the advantage it gives the tribe.

“Cherokee is way ahead of the game,” Hicks says. “The Eastern Band stands out in front.”

Hicks interacts with other tribes at conferences and events around the country, but knows of none that require this level of financial planning for the recipients of casino profits.

He — and the Tribal Council — hope that it will bring increased responsibility and burgeoning bank accounts to the tribe’s newest adults, who have not always had a history of cultivating either.

 

Big money (and big responsibility)

It’s ten minutes past three on a cold, Friday afternoon, and five high school seniors are gathered around a conference table at Cherokee High School, laden with backpacks and clearly very ready to get away from school work and into the weekend.

In the vast majority of ways, they appear to be like every high school senior in every town across America. They have the kind of names that characterize their generation — Kayla, Katlin, Skylar — and the attendant trappings, too. Cell phones flip back and forth idly in more than a few hands, more than a few thumbs swiftly click across tiny keyboards.

But in one unique way, they’re less similar to their peers in other places than a first glance might betray: these particular kids will mark their 18th birthday with more than some kudos, a voting card and maybe the keys to a used clunker. Quite a bit more, actually.

Since the end of 1995, every enrolled tribal member of the Eastern Band of Cherokee Indians has enjoyed a cut of the earnings from the boundary’s biggest breadwinner — Harrah’s Cherokee Hotel and Casino. Back then, that amounted to $595 a year. By 2010, it had jumped to $7,347 annually.

Today, the total payments for someone who have received the money from the outset works out to $92,000, no paltry sum. Children have their portion held in trust until their 18th birthday, and invested – “conservatively” says Chief Hicks – by Tribal Council and a special committee. And as the casino grows, so will revenue, and so will the trust fund for minors.

So when that monumental day comes to these six teens — and the other four-and-a-half-thousand odd tribal members who are still minors — a sizeable chunk of money will be laid in their newly adult hands.

“The first thing one goes out and gets is a brand new car,” says Jeremy Wilson. “This is the first question everyone who is about to get their big per-capita check is asked: ‘What kind of car you going to get?’”

Wilson would know, too. He’s 22 now and he got his money in 2007, so he had 12 years to consider what four-wheeled treasures such a cache of cash could purchase.

When he got the money, he did buy a new car — a Honda, relatively low in the flash department but still with a respectable level of youthful hipness — but with the remaining $35,000, he made a rather more adult decision. He invested it.

Is that normal?

He’s not sure. He can’t speak for everybody, says Wilson diplomatically. He was pushed towards the decision by his mother and elders in his life. But he will say that he was fairly unique among those he went to school with.

“When you’re 18 years old, and you are holding a check for $50-70,000 in your hands, what is the first thing you are going to think of?” he asks, almost rhetorically, answering himself: “it most likely won’t be mutual funds or Roth-IRAs.”

 

The Prodigal Spender

If you spend long enough talking to nearly anyone in Cherokee about kids and their per-capita checks, there is a certain sentence that will always enter into the conversation, in some incarnation or another. You will hear it from local leaders, young adults like Jeremy Wilson, school officials, financial counselors — the underlying theme in the current of conversation that will, without fail, bob to the top of the stream. It goes something like this: “you always hear about the kids who got the money and frittered it away on flash,” or some variant thereof.

According to Tribal Council Member David Wolfe, it’s why the idea of mandatory financial education was broached in the first place. And it was, in fact, an effort by young people themselves.

The teens at Junaluska Leadership approached the tribal council asking for help for themselves and their peers.

“They’ve heard the horror stories,” says Wolfe. “As the money in the trust fund has grown over time, now it’s getting to be a huge pot of money for them to be responsible for at 18.”

Keith Sneed, who works with Qualla Financial Freedom and has a vested interest in the issue, puts it in terms of cars. There is a multitude of bad stories, he says, about the giddy purchase of a set of wheels at sticker price and nothing to show for it years later but an old car.

“That’s all he’s going to have is an old Ford pickup,” says Sneed of the proverbial teen about whom there are so many cautionary tales.

It would be an understatement to say that Sneed rather dislikes that scenario. It is his dream to see every per-capita check recipient parlay that money into a million by age 40. And he genuinely doesn’t think that’s an unreasonable goal, which is why he started Manage Your ECBI Money.

In the simplest terms, it’s an online financial management course, and as of April, passing it with 80 percent is mandatory for anyone who wants their money at 18, as is high school graduation. For those that forego either, they’ll have to wait until age 21 to get their check.

Sneed is no fool when it comes to knowing what does — and does not — get through to teenagers.

According to Jason Ormsby, Cherokee High’s principal, he’s started heading up a yearly program called Mad Money, where he and volunteers from the community come together and simulate real life for an hour, throwing ninth graders into an imaginary financial world where they must manage their own money and deal with financial problems that are thrown their way.

“It’s real world scenarios in about a hour — your whole life in about an hour,” says Ormsby succinctly. And, he says, the simulation’s proven a success thus far.

Sneed is a far cry from teenagerhood himself, but he has spent the lion’s share of his life in the presence of the young, as a school teacher and now a financial outreach worker of sorts. And, making the adept observation that his interactions with youth these days trended towards the technological — e-mail, texting and the like — he saw an opportunity emerging to realize his dream that could actually work.

So he pitched it, and pitched it hard, enlisting the help of the First Nations Development Institute, who offer support and grant funding to initiatives by and for Native Americans, as well as the expertise of financial experts from every side of the economic world — bankers, investors, money managers and their ilk. And when he’d gotten a product he liked, he took it to the Tribal Council, who voted to make it mandatory.

 

It’s all in the approach

At this point in the tale, it should be noted that this isn’t the tribe’s inaugural foray into giving their young members some guidance in the ways of wise money management. It is the first time it’s been mandatory, but there have long been voluntary options for fiscal training.

Jeremy Wilson says he got some, in the form of the College Experience Program put on by the Tribal Education Department. A guy from First Citizen’s Bank came in, he says, and talked to Wilson and his youthful compatriots about financial options, wise investing and other similarly responsible and important economic topics.

“The only problem was, we were young,” says Wilson, by way of explanation for the less-than-lasting impact the surely admirable efforts had.

“This was nothing but sheer boredom to us, and even though a lot of people get onto us about how important it is for us to listen and pay attention, those people need to realize that you have to have the right strategy for the right audience,” says Wilson, offering a comparison to put a finer point on the problem. “If you are going to talk to a bunch of 15- to 18-year-olds about portfolios and showing stocks and numbers in a Powerpoint, you may as well talk to your grandfather about how to work an iPad.”

And it’s a salient point. If the youth of Cherokee have been playing the part of the prodigal son for the last 16 years, the well-intentioned programs and educational options of teachers and other adults were little more than the father’s pontificating to the son’s party-ready ears.

That, says Sneed, is why he’s looking to the kids themselves to craft a program that’s a little more, well, down with the kids.

“We’re asking the questions that they ask, not what their parents want to ask,” Sneed says. He brought young people into his office to meet with bank presidents, let them open up about what they didn’t understand in a more familiar environment on their terms, because, he says, “an 18-year-old walking into a bank president’s office is intimidating. It’s intimidating for grown people.” And the feedback from those interviews and many more like them built the groundwork for the Manage Your Money course, which is the first of its kind. They even have a series of YouTube videos featuring young tribal members and a hip-hop soundtrack that tout the merits of the program.

Sarah Dewees, a lead consultant with First Nations who helped Sneed develop the curriculum, says the efforts are groundbreaking.

“EBCI is actually on the cutting edge,” says Dewees. “They’re the first tribe that I know of to do an online financial course,” though she says many are re-examining their policies about minors and their monies, now that the amounts are beginning to grow.

She too, thinks the program is becoming necessary, not because Cherokee teens in particular have a hard time managing money, but because kids in general do.

“Any young person who is given a big responsibility or a large amount of money needs help to think about the best way to manage it, and when you’re young, you don’t really have a long-term view,” says Dewees. That’s the sentiment in Cherokee among those working to put that education in place, and those who wish they’d had it.

Getting back to 22-year-old Wilson, he has a lot of faith in his peers, but there’s only so much you can expect from an 18-year-old if you don’t give them any guidance.

“Our youth are smart, they really are,” says Wilson. “They just need to be given the right tools and strategies to help them become financially savvy.”

Chief Hicks says that this, more than anything, is the goal for young people, and the goal of this new law — equipping them to make better investments that will serve them longer than a new car.

“I’ve always been a believer that we need to continue to raise the bar on financial responsibility,” says Hicks. He says that financial programs like Sneed’s are, and have been, the key to changing the way young members think about where their money goes. That, says Hicks, is the long-term goal: change thinking to change actions.

“We want them to simply make the long-term investment, whether that’s a home or some other long-term investment, [to think] ‘you know this big nest egg, I’m going to do something with it,” says Hicks.

 

The conscientious kids?

Cut back to the high school, where our six seniors are sharing their plans for their per-capita money. Given Wilson’s assessment of his classmates attitudes towards investing the cash just four short years ago — “it’s not a popular topic”— it’s a little surprising to hear six teenagers talk about what they’re going to do with tens of thousands of dollars and not hear a single mention of the word Porsche.

In fact, the buzzwords that are bandied about are fiscal terms like “stocks” and “property” and “savings account.”

At the head of the table is Troy Arch. He’s antsy to leave for some other extracurricular activity, and when asked what his plans are, he quickly shoots back, “invest it in stocks.”

What kind of stocks?

“I don’t know, just some kind of stocks.”

Well, at least the intent is there, even if he hasn’t gotten the specifics nailed down yet.

Down the table, Kaitlin Bradly interjects confidently, rattling off what she thinks today’s Google stock price is.

She seems to be the ahead-of-the-curve type — the only one here who has already gone through the online course — and she’s in favor of settling her money in several different bank accounts, choosing the ones that have the best interest to drop the bulk into.

Skylar Bottchenbaugh, one of two 18-year-olds in the room, wants to invest his, too, though he’s got a more concrete goal in mind than simple savings.

He’s headed to Texas upon graduation, where he’ll study to be an auto mechanic.

“I want to invest into my own garage,” he says, and he’s gotten feedback from his family and college advisors that investing his big check first is a good way to start on that dream.

Of course, he adds, he’s going to buy himself a car, but not a new one, “because you’ll end up trading it in sooner or later. Probably a Kia or something.”

Again, not quite the expected car of choice for a teenager sitting on 70 grand.

In terms of pure intent, these students are a far cry from the anecdotal teen who has historically featured so heavily in the minds of those trying to help educate them. And that may be, in part, because that education is working, that programs like Mad Money are already getting through.

But another factor in play here may simply be time. Per-capita checks have been handed out now for just over 15 years, which is as far back as most of these students can remember.

All of them will say that the decisions of those that came before them had a hand in crafting their outlook today. They have seen firsthand how easy it is to flush away a few thousand. And so have their families.

“My parents have kind-of had a say in mine,” says Kayla Smith, also 18. “They see how everybody else spends theirs just randomly — two months and it’s gone.”

Yes, agree the others, we’ve seen that, too. And we do not think it is a clever idea.

To stick with the Biblical analogy, they’re playing the part of the other brother, watching unimpressed as the prodigal parties to the pig pen, determined not to share that path themselves.

Some of them, though, are similarly unimpressed that their responsibility — or intent towards such — hasn’t translated into a greater degree of respect from authorities. They don’t think money management should be mandatory for everyone, just those who drop out or flunk out. Yes, they’ve all chosen to study up on savings and investment, to seek sound financial counsel. But they resent the fact that they’re being forced into it.

“I think it’s unfair that they make us take this test,” says Bottchenbaugh. “We’ve waited all this time to get it. It’s our money, we should be able to spend it the way we want to, even if it’s blowing it in a few days.”

Some of that viewpoint, of course, is a by-product of youth, the compulsion to bristle against anything that’s compulsory.

And Sneed says he thinks the tribe would be remiss in not giving every kid the chance to acquire some solid financial skills, because, he says, in every group, regardless of outside influence, there will always be a few on each extreme of the spectrum — some who blow through the money recklessly, some who care for it wisely. The crowd he’s after is the middle, the average kid who might do great things with it, if only they knew how.

“There’s going to be a few that, no matter what you do, they’re going to throw their money away,” says Sneed. “The majority need direction and help, and that’s what we’re trying to provide: direction and help.”

Chief Hicks has a response for that mindset, as well: they will still get their money, just a few years later. And, he says, the idea in that was to, at least, provide every young person with three extra years of “natural experience” before coming into such wealth.

In other tribes around the country, the concept of staggered payments – breaking the lump sum into smaller chunks to be paid out at age 18, 21 and 24 – has been introduced for precisely that reason. And Hicks says it’s been bandied about for years among the Eastern Band. Even with the new course in place, it’s an idea that he’s certain isn’t dead yet and will swing back into the dialogue at some point.

“I think it’s going to be a topic that comes back alive as the money increases,” says Hicks. “Our students could save $10,000 if we did staggered payments.”

 

Hope for the financial future

Whether or not attitudes are already changing among Cherokee’s youth, Sneed says he hopes the direction and help will begin to show itself four, five or 20 years down the road, when today’s teens — and by extension the community around them — are more financially stable than their predecessors.

For the chief, it’s his hope as well, that the young people of the tribe would make sound investments now that would carry into the future. And while he thinks that gaining experience, education and training off the boundary is important — he, Sneed and Wolfe have all done so — he doesn’t see return and reinvestment of that same money into the reservation as an impossibility.

“I definitely think that’s an area that’s wide open,” says Hicks of entrepreneurship on the boundary, and he says that, even now, the tribe is making efforts to close the gap between current entrepreneurs, many of whom are older, and younger minds and money trying to learn the ropes.

In Wolfe’s eyes, he sees the long-term benefits of this program and others like it coming back to boost the whole community. He sees it as a “nation-building” effort.

“Before this, we didn’t have very many going to school and college. I think that’s a great sign of things to come out of these investments — to promote secondary education, that we can build on it,” says Wolfe. “That’s the type of scenario that we’re trying to create in a nation.”

And it’s hard to tell if our six teens represent a wholesale change in the attitudes of youth across the board. There is some element of self-selection — why come talk about your per-capita plans if you have none or don’t care to make any?

Principal Jason Ormsby, who has a more on-the-ground perspective, says he has seen a change in the attitudes of his students as a whole.

“I see more and more kids investing it, going on to college or buying a house, using it more wisely,” Ormsby says, and he hopes his students take the new education they’re about to get to heart.

“I’d like for them to take some of it and have a good time, you know buy themselves something, but I’d like to see them invest it and go on to school and see what happens then. Just don’t be in a hurry to spend it on stuff that’s not really that important.”

As someone who’s looking back from just a few years down that path, Jeremy Wilson’s parting wisdom to today’s 18-year-olds runs in the same vein.

“Don’t let per-capita consume you, don’t let it be your main concern, because there are too many areas in our communities that are in need of dire attention,” counsels Wilson. “If we can improve how we manage our money, we won’t need to look forward to the next per-capita check because then we will know we’re doing just fine, and we can then focus on more important things.”

Paula Deen cooks up live show at Harrah’s

The cooking star Paula Deen will bring her flare for Southern cooking to Harrah’s Cherokee Casino with a live cooking demonstration at 5 p.m. Saturday, Jan. 22.

Paula Deen, widely known as the Queen of Southern home-style cooking, is a popular chef on The Food Network, a restaurateur and best-selling cookbook author.

“During the show, Paula Deen will get up-close-and-personal with the audience, sharing stories and anecdotes from her life and road to success, as well as preparing two Valentine’s Day dishes during the cooking demonstration portion of the show,” said Human Resources and Community Relations Vice President Jo Blaylock.

The show will coincide with the grand opening for the new Paula Deen’s Kitchen, a 404-seat restaurant to be located in the lobby of the new Creek Tower Hotel at Harrah’s. The new food outlet features the décor and ambiance of Paula Deen’s legendary home and kitchen in Savannah. Adjacent to the restaurant is an 1,800-square-foot Paula Deen retail shop, offering cookbooks, spices, food items, cookware, logo-wear and gifts.

Proceeds from Paula Deen’s show will benefit the Cherokee Indian Hospital’s Digital Mammography Unit.

“We hope the community will enjoy getting to know Paula Deen and support the hospital at the same time,” Blaylock said.

The show will be held in the new 3,000-seat concert venue at Harrah’s. The giant stage is framed by two 32-foot high-definition screens, giving every ticket-holder in the room a bird’s-eye view of the show.

Show tickets range from $15 to $40. www.ticketmaster.com or call 800.745.3000.

The concert venue and Paula Deen’s Kitchen restaurant are part of a massive expansion at Harrah’s Cherokee, which is slated to be complete in 2012. Other additions includes a VIP lounge, a spa, a digital poker room, Asian gaming room and various other restaurant and retail outlets. The property also is renovating current casino gaming facilities and doubling the size of its casino floor.

Casino impact on ABC sales not a windfall yet

When the Bryson City and Sylva ABC boards hammered out a profit-sharing agreement for liquor orders from Harrah’s Casino, there was widespread speculation the new revenue source would bring in big money.

But the reality, so far, has been different.

“It’s not doing anywhere near what people thought it was going to do,” said Bryson City ABC store manager David Maynard.

The Bryson City store does the ordering and records the revenue on its books, then passes along a share of profits to the Sylva ABC board since the Cherokee reservation lies in both Swain and Jackson.

Harrah’s Cherokee opened its first full service bar in May, placing a start-up order with the ABC store that bumped its monthly sales numbers up 50 percent from the year before.

But since then, mixed beverages sales to the casino have averaged between $6,000 and $8,000 per week.

“That sounds like a lot of money, but the state takes a good chunk of it. We thought it was going to be a whole lot more money as far as sales. I think everybody did,” said Maynard.

With the state, the Sylva ABC board, and the tribe all involved in the formula of alcohol sales to the casino, sales don’t exactly turn directly into profit.

“It has help us make an increase from last year as far as sales, but it hasn’t helped out the profits yet,” Maynard said.

 

By the numbers

A spike in the volume of liquor passing through the Bryson City ABC store is a direct reflection on the bottles of booze headed for Harrah’s Casino since alcohol was legalized there.


May 2010

Walk-in customers    $124,192

Sales to retail outlets    $91,857

Total Sales    $216,049


May 2009

Walk-in customers    $129,134

Sales to retail outlets    $11,965

Total Sales    $141,099

Alcohol sales part of grander scheme at Harrah’s Cherokee Casino

Just over a year ago, the members of the Eastern Band of Cherokee Indians voted to allow alcohol sales at Harrah’s Cherokee Casino and Hotel while the rest of the reservation would remain dry.

The controversial ballot measure pitted economic development proponents who saw alcohol sales as a necessary step in developing a world-class resort against opponents with moral qualms about alcohol, believing it would lead to social ills.

While the social impacts of alcohol sales at the casino are impossible to quantify, the effect on the casino’s bottom line has been instantaneous.

Meanwhile, Harrah’s Cherokee is in the midst of a massive $600 million expansion project that aims to position its brand as an international resort destination.

For general manager Darold Londo, the business’s aspirations made the addition of alcohol sales almost a requirement.

“We never really would have gotten to a resort definition without certain amenities,” said Londo. “Although it’s arguable whether alcohol was totally necessary, it’s brought us in line with our competitors.”

Londo also said the fears of alcohol opponents haven’t come to fruition.

“It has not created the problems that were anticipated by some tribal members,” Londo said.

To Jessica Nifong, 23, a tourist who stopped in to the casino while visiting Cherokee last week, alcohol is indeed necessary.

“I expect it. I think it’s part of the environment because it helps people relax,” said Nifong, who is from Winston-Salem. “I just assumed it would be there.”

So far this year Harrah’s Cherokee has recorded $1.3 million in alcohol sales, serving nearly 200,000 drinks to around 15 percent of its guests. The casino’s management estimates that guests who consume alcohol have contributed $5 to $10 million in gaming revenue during the same period.

The sale of alcohol has provided a quick revenue boost and evened the playing field, but it hasn’t brought in as much money as the management predicted.

See also: Casino impact on ABC sales not a windfall yet

Rolling out in a harsh environment

“The alcohol sales have been less than expected, and there are a number of reasons,” said Norma Moss, an enrolled member of the tribe who served for 10 years on the Tribal Casino Gaming board and recently took on the role of assistant general manager of resort operations.

Moss, who pushed hard for the ballot measure, said the casino’s slower-than-expected alcohol sales have to be seen in relation to what’s happening at all casinos around the country. The casino business is down like many other sectors of the economy, and alcohol sales in particular have dropped off.

Londo said that has to do with the consumer mentality.

“People out there, including me, aren’t buying that second glass of wine or that extra dessert,” Londo said.

Also, Harrah’s Cherokee spent 13 years attracting customers who didn’t need alcohol.

“By definition, we were serving a customer base for whom alcohol wasn’t a requirement,” Londo said.

Lastly, the rollout of alcohol sales has been gradually phased in, and it’s still not fully integrated into the business model.

At first, the casino introduced only beer and wine sales and only at its restaurants in October 2009. Beer and wine made it to the casino floor in December.

Liquor became an option in January, but mixed drinks didn’t really hit the floor until May of this year when the first bona fide bar opened.

In July, an entertainment lounge with a full bar, televisions and a stage came online. The lounge offers patrons the first environment designed with alcohol consumption in mind, a place you can listen to music or watch football only 20 feet from the gaming floor.

Roger Clarke, 74, of Ft. Myers, Fla., was shopping in downtown Cherokee last week. He’d been to the casino the night before and appreciated the new bar.

“I prefer having the option myself,” Clarke said.

At the same time, the gaming floor and casino entrance have been totally renovated. The new design scheme feels clean and modern.

Moss said the new HVAC system could handle the 100 percent transfer of circulated air, which means that even when people are smoking right next to you, you can still breathe.

In the meantime the gaming floor went from 3,400 games to 4,700 — 160 of the new additions are table-based.

Londo wants to see all of the casino’s features operating before he guesses at the impact of alcohol revenue on the business model.

“The whole process is still in its infancy. It’s still developing, but for the customer’s, there’s the impression of a full-service alcohol environment,” Londo said.

Gamers and walk-ins

The casino business serves two distinct client segments, casual walk-ins that form the retail customer market and loyal “gamers” who spend their money playing the odds.

According to Londo, the recession has cut deepest into the number of retail visitors the casino gets, but “gamers” are the ones who tend to drink, according to industry stats.

“It’s not 20-year-olds or 30-year-olds or 60-year-olds who drink,” Londo said. “It’s not females or Asians or anything else. But if you’re looking at gamers, they tend to be more likely to consume alcohol.”

The recession has unsettled gamers as a group too, because they were used to amenities like free drinks on the floor as long as they were gambling.

Londo said the Harrah’s Cherokee model didn’t support alcohol as a freebie.

“Some gaming customers have been used to getting the product free or at cost, and it was incumbent on us to introduce the product at closer to market price,” Londo said.

He believes the shift away from free drinks and food may be a broader paradigm in the industry.

Londo, sees alcohol sales as a defensive measure that will help the business hold its ground as the recession grinds on.

“It gives us a hook or a stickiness that from a defensive standpoint has allowed us to hold customers or keep customers,” Londo said. “It’s hard to quantify that because year after over year, organically, all businesses are off, including us.”

While revenue is up at the casino compared to last year, it is still down compared to pre-recession levels. Tribal members who supported alcohol sales hoped the new revenue stream would offset losses stemming from the recession.

Fifty percent of the casino’s profits go back to the tribe’s membership in the form of per capita payments. After years of growth, per capita payments dropped 11 percent in late 2008, and proponents of alcohol sales were hoping alcohol sales at the casino would help reverse that trend.

Creating a new brand

“If you look at Harrah’s casinos east of the Mississippi, the properties that continue to update and invest in the future seem to be holding up better than their peers to weather the storm and position themselves,” Londo said.

According to Londo, the Harrah’s operations in Hammond, Ind. and Atlantic City, N.J., have out-performed their peers, precisely because they’re still trying to grow at a time while industry giants like Mohegan Sun, the nation’s second largest casino, are still off.

Harrah’s Cherokee Casino and Hotel planned its expansion before the recession hit, but it began in earnest last year. By January 2011 the resort will boast the largest hotel in the state, 21 stories offering 1,108 rooms, 68 suites and 8 premium suites.

Moss called the new hotel tower, which sits in a valley surrounded by high peaks, the “miracle in the mountains” during its topping off ceremony in April.

In addition to the hotel, the newly constructed 3,000-seat concert venue opening Labor Day weekend will bring in acts like Hank Williams Jr. and Crosby, Stills and Nash. A 16,000-square foot spa will be the last element in the expansion to open in 2012.

The new amenities are all designed to create a resort feel for patrons. Cherokee already boasts a championship golf course and trophy fly-fishing water.

Londo said by expanding and including alcohol, the casino has been able to pursue branding partnerships with Paula Deen’s Kitchen and Ruth’s Chris Steakhouse.

Londo said so far, it’s been hard to track the impact of alcohol sales separate from the other pieces of the expansion on the business.

“It’s hard to say this one area is responsible. They’ve all helped us improve the package,” Londo said. “If it was an excuse not to come before, we’ve satisfied that.”

The customers’ experience

“The bottom line is customers expect to have alcohol in a casino environment, and it’s gratifying to know we can offer it,” Moss said.

But after more than a decade operating without alcohol, Harrah’s Cherokee has had to implement a whole new business model in the midst of a recession. If the climate wasn’t ideal, at least the expansion afforded the opportunity to create a building with the distribution and delivery in mind.

“The property was never set up to accommodate alcohol from the distribution standpoint so all of that had to happen, and it was timely because we were in the midst of an expansion anyway,” Londo said.

Now everything from distribution loading docks to plumbing to multi-game consoles in the bars make it possible to keep the drinks flowing. Londo said because most Harrah’s casinos have alcohol, the model was already there.

“The processes, the procedures and the know-how to implement it in the business model were readily available to us,” Londo said. “It has its uniqueness, but it’s not as challenging as you might think.”

One of the most unique elements of the business model is that it took a referendum of a sovereign nation to get the green light.

“The message of the referendum was that the membership wanted it and they believed it was necessary to the casino’s success,” Moss said.

Londo is less worried about alcohol sales than with how the overall economy is looking. He said there could be worse things than running a casino in a mountain valley situated between Charlotte and Atlanta.

“You take the good with the bad,” Londo said “There’s not a more beautiful place to operate a casino.”

Cherokee casino renovation halfway home

Last week, the Eastern Band of Cherokee Indians celebrated the topping off of their new 21-story hotel tower, the centerpiece of Harrah’s Cherokee Casino’s $633 million expansion.

“This, for us, is a game-changer,” said Harrah’s Cherokee General Manager Darold Londo. “This is the exclamation mark on the resort.”

More than 1,000 workers gathered with tribal officials, casino administrators, and others to watch as the final steel beam, decorated with an evergreen tree, was hoisted by crane to the highest point of the structure.

Principal Chief Michell Hicks said the event was an opportunity to recognize the workers who had erected the tower in nine months, but also to celebrate the foresight of the tribe’s leaders in planning the expansion.

“I just want to take a moment to recognize the planning and foresight not only for creating these jobs, but for creating a facility that will benefit us for many, many generations,” Hicks said.

The 21-story Creek Tower will add 532 new rooms to the resort, doubling the casino’s overnight capacity and making Harrah’s Cherokee the largest hotel in North Carolina. Construction should conclude later this year.

The ceremony was a chance to recognize the grandiose nature of the casino’s expansion as a resort. When the project is finished, it will boast a Paula Deen Kitchen restaurant with 400 seats, 78 luxury suites with mountain views, a 16,000 square-foot spa, and a 3,000-seat auditorium.

Together with the new Robert Trent Jones-designed Sequoyah National Golf Club, the elements represent Cherokee’s move to remake itself as a resort destination.

For Norma Moss, chair of the Tribal Casino Gaming Enterprise, that’s exactly what the goal has been since the EBCI Tribal Council approved the investment in 2008.

“Take a good look around you,” Moss said. “Our masterpiece in the mountains is becoming a reality.”

For Tribal Council Member Perry Shell, who voted for the appropriation, said Cherokee and the tribe is becoming an economic driver for the region.

“I see this as an investment,” said Shell. “I think it will have a positive impact not only for the tribe, but for the entire area.”

Builder and tribe share love of ceremony

Topping off ceremonies are a 1,000 year-old tradition for builders, according to Turner Construction Company’s project manager Bobby Fay. With his 1,000-plus workers arrayed in front of him, Fay took pains to make sure they knew the ceremony was for them.

“This ceremony has traditionally been for the workers,” Fay said. “To honor their sweat.”

Fay, a bear of a man with a bushy beard, stood in a black full-length duster with his hard hat on and gave a rousing speech in English and Spanish to a delighted audience.

“We brought in the drillers from the south. The concrete workers from north over the mountains. The architects from the west. The steel workers from the east,” said Fay. “I’ve never had so many area codes in my phone.”

Londo said Turner Construction’s value system has been a good fit with the tribe and that was evident in the topping off ceremony, which began with a traditional prayer to the seven spiritual directions of the Cherokee offered by tribal Elder Jerry Wolfe.

“I love the fact that Turner honors traditions,” Londo said. “We appreciate those types of things in Cherokee.”

The company won the $120 million construction contract last summer, and they have worked hard to get the hotel tower up in just nine months. Miraculously, the project has not lost a day to weather, despite Western North Carolina experiencing an historic winter of snow and ice.

Fay said the hotel construction was on schedule to finish in December. In the meantime, the casino will be rolling out a series of new amenities. The first full bar on a gaming floor is scheduled to come on line next month, the events center will open Labor Day weekend, and Paula Deen’s Kitchen restaurant will start serving food late in the year.

Live dealer conversation stalled in courts

After years of a stalemate with the state over live dealers at Harrah’s Casino, the election of Gov. Beverly Perdue signaled new hope for the Eastern Band of Cherokee Indians that an agreement finally could be reached.

Perdue had signaled a willingness to reopen talks about allowing live dealers, in addition to the electronic games now offered at Harrah’s. But the state’s banned video gambling industry has other ideas.

A lawsuit filed by a video gaming firm argues the governor does not have the right to negotiate gambling compacts with the Cherokee, alleging that the power lies only with the General Assembly.

“The approval of compacts between the State of North Carolina and other sovereign entities, including the Eastern Band of the Cherokee Indians, is a core legislative function; therefore, by negotiating and executing the Compact and amendments thereto Governors Hunt and Easley violated the state constitution’s ‘separation of power’ clause,” states the complaint filed by New Vemco Music Co. in Wake County Superior Court in February.

It’s the second such case filed by New Vemco. Last year, a lawsuit claimed the state didn’t have the right to allow video gambling in Cherokee while banning it everywhere else. The company has appealed to the Supreme Court, which hasn’t yet decided whether to review the case.

Ralph Amik, New Vemco’s owner, pledged to keep fighting for to restore the outlawed video poker industry in the state.

“We may wind up taking it to the Supreme Court to do it, but we are going to win,” Amik said. “I don’t care what the Cherokees do. I really and truly don’t, but we were in business first. They can’t give it to one and not the other.”

Together the two cases have been seen as an effort to force the state to lift its ban on video gaming, which it prohibited in 2007, by hamstringing the process of expanding gaming on the Qualla Boundary.

Officials in the governor’s office have acknowledged that the cases have stalled negotiations over live gaming at Harrah’s Cherokee Casino.

“The governor has always welcomed that dialogue with the Cherokee, but the fact that there are two legal cases pending in court certainly affects her ability to carry those discussions forward,” said Chrissy Pearson, Gov. Perdue’s press secretary.

Pearson said the governor would wait until the cases are resolved to move forward with the live dealer discussion.

“The crux is that both cases do need to go through the courts so we can know what precedents will be set before we proceed any further,” Pearson said.

Eastern Band of Cherokee Indians Principal Chief Michell Hicks would not comment on the status of the live dealer discussion or the lawsuits, citing a policy against discussing “pending lawsuits or compact negotiations with the state” with the media.

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