Wednesday, 12 December 2007 00:00

The law of attraction: After a decade in Western North Carolina, Harrah’s Cherokee Casino continues to be an economic powerhouse

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By Jennifer Garlesky • Staff Writer

In the 10 years since the opening of Harrah’s Cherokee Casino in November 1997, a remarkable transformation has occurred among the Eastern Band of Cherokee Indians. The casino has brought a surge of unprecedented economic growth to this once-depressed community.

The evidence is visible throughout the Qualla Boundary. Driving through the downtown district one sees signs touting the future site for a health center or announcing a construction site for new businesses and housing developments. Soon tribal members and visitors will soon have the opportunity to live in a state of the art townhouse community that is being constructed along U.S. 19.

So how has this community changed its economic status so drastically in just a decade? With the help of gaming revenue that tribal officials have been putting to use to improve social, educational and cultural services and with annual payments to members that have allowed them to make purchases that otherwise were beyond their means.

The tribe receives 50 percent of the profits generated from the casino. According to a 2006 community report, that came to $239,309,856 from gaming profits. About $47.8 million funds the tribe’s 2006 general budget, which is used to support community programs such as the police and public works departments.

Each tribal member receives a per capita payment from gaming revenue. The money is distributed twice a year to members in June and December. This year $119,654,933 was allocated to its 13,717 enrolled members, according to the report. That’s about $8,700 per tribal member, including children.

The money has changed the tribe’s way of life.

“The daily living is getting better,” Principal Chief Michell Hicks said in an interview from his office in the tribal headquarters. Members use this money to make home improvements, buy Christmas presents and for other household needs.

“As individuals, it’s certainly raised our standard of living,” said Joyce Dugan, a former chief from 1995-1999 and director of communications at Harrah’s.

Dugan has seen the positive effects that per capita payments have made since the casino opening on Nov. 13, 1997.

“It helps many families purchase those necessities,” Dugan said. “I recall seeing many trucks pulling home furniture and appliances after a per capita check was awarded. Typically appliances and furniture are things folks put on a payment plan, but they are now able to purchase them in full,” she said.

Harrah’s is Cherokee’s second casino. The tribe opened and operated a small casino in 1995 after gaming was first approved by the state. Members received their first per capita payment of $600 in 1996, Dugan said. The success of Harrah’s casino has increased members’ payments to more than $8,700 a year.

But not all spend this money wisely, which is frowned upon by some members.

“You are always going to have individuals less appreciative but the majority use it wisely,” Hicks said.

 

Trust Fund Babies

Per capita payments are awarded to the Cherokee youth, and the money is placed in the Minors Trust Fund Account. That money is invested and managed by the tribe. Each child’s check is deposited into the account until they turn 18 years old and have their high school diploma or GED certificate.

If a tribal member drops out of school, they don’t receive the money until they are 21.

It is expected that those who will turn 18 this year will get a check for more than $50,000. This money could be used for a down payment for a home or for college, while others may buy a new car or the latest in technology. If an 18-year-old chose to save $30,000 of the money until the age of 65 earning an average of 8 percent interest a year, it would generate $1.1 million, according to the Minor Trust Fund Account brochure.

Those born today will get more than $8,000 per year invested in their trust fund, which will likely have several hundred thousand dollars — perhaps more depending on per capita payment amounts and the stock market — by the time they turn 18. If the money is invested wisely, a generation of millionaires could arise in the next 40 years that could change Cherokee drastically.

Teaching the tribe’s youth to spend their money wisely is a priority for tribal leaders.

“Our biggest challenge is to educate them,” Hicks said. “As tribal leaders we have to educate our youth for the long run.”

Students who attend Cherokee schools have the opportunity to take classes that focus on investments and the tribe also connects students with investment firms.

 

Economic Impact

Visitors flock to Cherokee to play the electronic games at the casino and retreat to the Great Smoky Mountains National Park for some much needed rest and relaxation. This year the casino attracted more than 4 million visitors — reportedly the largest tourist draw in the state of North Carolina. With the proposed $650 million expansion project beginning to take shape at the casino, Cherokee will become a more prominent tourist destination than it already is.

“We are able to focus on tourism and what we have to offer to visitors,” Dugan said.

One way of promoting tourism has been the Cherokee Preservation Foundation, which operates off of gaming profits to assist the tribe with economic development, cultural and environmental preservation.

The foundation assists local organizations by distributing grants to fund projects such as the repairs to Cherokee’s museum, the revitalization of the downtown district, a language preservation program, and events like the Festival of Native Peoples, which attracts tribes from throughout North America.

“The casino is changing the face of Cherokee to give us the resources to build infrastructure that we never had,” Hicks said. “As we look forward we must be strategic with the use of those funds.”

Preserving Cherokee’s culture and history will help prevent the community from turning into a tourist trap like Pigeon Forge or Gatlinburg, Tenn.

“We don’t want to be defined by gaming,” Dugan said. “Its one of the amenities people can find here.”

“As Indians we struggle with preserving our identity,” she said. “Gaming has given us the financial means to put emphasis on cultural needs through purchasing land and preserving our language.”

 

Regional growth

The casino has not only created a positive impact for the Cherokee community — it has also benefited surrounding counties. The casino offers high-paying jobs with benefits that attract a workforce of 1,800 people from Swain, Jackson, Macon, Graham and Haywood counties. In the last year the casino has paid over $68 million in wages to its employees, leading Swain County to name it the employer of the year for the past six years, said Charles Pringle, a casino public relations assistant. It is the largest employer west of Asheville.

As the casino expands, additional jobs will be created — an estimated 900 in the next five years, said Darold Londo, Harrah’s general manager.

“It’s a major engine for quality jobs and good-paying jobs,” said Dale Carroll, AdvantageWest Chief Executive Officer. AdvantageWest is the economic development agency operated for the western region that is a part of the state Department of Commerce.

In Swain County and the Qualla Boundary in the early 1990s — prior to the opening of the casino — unemployment often hovered at more than 20 percent,

“We want our workforce to have those opportunities, and Harrah’s has absolutely helped with that,” said Ken Mills, Swain County director of economic development.

In fact, the casino has created so many jobs that finding workers to fill them has proven difficult. According to Mills, Swain County has a workforce of about 7,000. With more jobs being offered, it might entice residents to leave their current jobs and therefore put a strain on local mom and pop businesses to find workers.

“It’s going to put a lot of pressure on everyone,” Mills said. If an employee is working at a business that does not offer benefits, they may leave their current job, Mills explained.

Still, in order to fill these jobs the casino may have to bring in a workforce. Casino officials are developing a marketing plan to attract workers.

“Unemployment here doesn’t exist,” Londo said. “Everyone already has a job. We will be competing for the same people. So we will have to expand our horizons and market it well.”

Even though the casino may be competing for employees with other businesses in the region, it would be a mistake to think the casino is causing problems for local businesses. To the contrary, many small businesses in the region benefit either directly or indirectly from the casino’s huge economic impact.

Bruce Johnson is the owner of Champion Supply in Haywood County, which sells cleaning and janitorial supplies. Harrah’s is one of his customers.

“They are a pretty big customer,” Johnson said. “And a great customer to have.”

Supplying mops and cleaning products to the casino has allowed Johnson to buy better products for a cheaper price. Also, by having an anchor account in Cherokee, Johnson said he is now is able to make deliveries to other businesses in Franklin, Bryson City and Cherokee.

“Geographically it allows us to expand,” he said.

For an area business to become a vendor at the casino there is a stringent licensing process, Johnson said.

Businesses must register with the Tribal Gaming Commission, pony up $1,000 for a business license and each year pay a renewal fee of $150. But coming up with the cash to pay for the licenses is an investment for local businesses. Johnson says he generate about $70,000 to $80,000 in revenue just from the casino.

“It’s unbelievable the impact its made,” he said.

 

Tourist destination

Cherokee’s casino is one of the top tourist attractions in the Advantage West region, which includes Grandfather Mountain and Biltmore Estate, according to Carroll.

The $650 million expansion project will renovate the majority of the facility to create a destination, not just a place where you go to gamble for the weekend.

“People are already coming to the area for other reasons,” Londo said. Cherokee adjoins the Great Smoky Mountain National Park and the Blue Ridge Parkway. Various outdoors activities such as hiking, camping, rafting and horseback riding keep tourists busy when they aren’t gambling.

The upgrades are aimed at making the casino experience better for visitors. Right now the facility is filled with older slot machines and aged television equipment. “The property has shown its wear,” Londo said.

Through the expansion project the facility will be modernized with high definition televisions hanging from the ceiling, new carpet and chairs as well as signage.

“It’s things that just compliment the experience,” Londo said. The heating and water systems will be upgraded as well.

“Everything will be substantially better once the project is completed,” he said.

Casino-goers will see the transformation process begin next year. Starting in February construction crews will be building a seven story parking garage at the rear of the casino, which will be completed in the next 18 months. The garage will add about 2,500 additional parking spaces. The front west side of the casino will be added onto with a two-level expansion. The first level will feature additional gaming tables and the second level will feature a 3,000-seat entertainment complex. This section of renovations bears a price tag of $70 million.

Another addition will expand to the right side of the facility. A new overhang will be created featuring a green roof and a pond with a running waterfall. The second floor of the casino will feature additional restaurants and shopping areas.

The new look of the facility should complement the surrounding area. “We are paying much more attention to social recreation and the natural environment,” Londo said.

The final detail to the casino plan is a 30,000-square-foot two level spa, which will be built in front of the casino’s first hotel.

The additions are geared to make Cherokee’s casino stand out so it can be compared to other gambling venues in Atlantic City and Las Vegas.

“People have a certain expectation when they walk into a casino,” Londo said. “If we can be more like that, then it’s good for business.”

But at Cherokee’s casino gamblers are missing one important experience — live dealers. The state of North Carolina has so far refused to re-write the Cherokee Tribal Gaming Compact to allow for live dealers.

Adding this to the casino might create an appeal to more tourists, but it is something casino officials are not banking on.

“We are very successful with the product portfolio we have now,” Londo said.

But getting live dealers is something that is still on the table for tribal officials.

“It continues to be our hope to be allowed as a tribe to express our sovereignty,” Hicks said.

 

Gambling’s woes

Harrah’s Cherokee Casino is open 24 hours a day, seven days a week — which gives area gamblers an opportunity to gamble at any point of the day. One can sit down at a slot machine and lose $20 in just a few minutes.

Gambling addicts can receive help by calling a hotline, which can be found on any Harrah’s advertisement.

The National Association for Compulsive Gamblers — which operates out of Louisiana — refers callers to Gambling Anonymous meetings and helps family members by sending them information on how to cope with gambling, said Phyllis Lawrence, a help line specialist.

The association answers calls for 20 states and is widely used by people from all over the country. “There is a problem in the United States with compulsive gambling,” Lawrence said.

The association also helps compulsive gamblers with finding emergency shelters, mental health counselors and credit services.

All the information given by help line specialists remains confidential. But the one problem with seeking help from an out-of-state organization is that the specialists’ only way to know if someone received help is when they call the addict in 10 days to check in with the person.

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