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. 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.

Harrah’s Cherokee Casino building for big future

With the rest of the region’s construction economy at a standstill, Harrah’s Cherokee Hotel and Casino is in the midst of a massive expansion project employing nearly 1,000 workers.

“We’re kind of creating our own gravity in terms of labor and resources,” said Erik Sneed, project manager for the casino expansion.

The expansion of the casino and hotel began in 2009 and is slated for final completion in 2012. The $600 million project will dramatically increase the casino’s gaming capacity and transform the hotel into one of the largest and finest in the country.

Sneed said Harrah’s has designed its gaming expansion to be flexible enough to be easily adapted if the casino reaches an agreement with the state of North Carolina to bring live dealers to the gambling floor. The casino will go from 3,400 games to 4,700 — 160 of the new additions will be table-based.

In May, the first phase of the bigger gaming floor will come on line, claiming the former entertainment pavilion and performance stage. The new casino area, unveiled with an earth/water-theme, will house 750 additional games and a brand new full-service bar in a non-smoking environment.

In June, another phase of the casino’s expansion will bring an additional 1,000 games on line.

Another characteristic of the new gaming marketplace is adapting to the Asian gambling profile. Feeding off its success at other casinos with Asian gamblers, Harrah’s will add an Asian gaming room featuring Pai Gow poker, baccarat and a nearby traditional noodle bar.

The casino’s expansion reflects the newest trends in the gaming industry. The whir of the slots, the clinking of the coins, and the neon lights have given way to interactive LED lighting displays and electronic debit swipe cards.

The new casino addition is designed as an open, airy environment that draws the outside in by incorporating natural light.

“We’ve really tried to embrace the outdoors and connect well with the creek and the outside surroundings by using lots of glass,” Sneed said.

A newly landscaped green space around Soco Creek, featuring native river cane and reeds, will integrate the casino and hotel into a park-like campus. When the façade of the hotel is complete, the green roof of its porte cochere will be an architectural centerpiece.

The hotel expansion will crown the 37-acre casino complex with a dramatic 21-story high rise — the third and biggest hotel tower yet — featuring glassed-in luxury suites up to 2,000 square feet in size.

The casino’s expansion is a sign of ambition, but it’s also a response to a practical reality. Last year, Harrah’s Cherokee purchased over 77,000 rooms off-campus for casino guests, as their on-site hotel accommodations were consistently maxed out. The expansion will nearly double the hotel’s room capacity from 532 rooms to 1,001 rooms with 107 suites.

Defective slot machine zaps gambler

A slot machine at Harrah’s Cherokee Casino malfunctioned, delivering a shock that floored a gambler, according to a lawsuit brought by the victim.

While the incident occurred over three years ago, Willie Jean Robinson is still waiting to hear whether she can collect civil damages over the bizarre personal injury case.

Robinson is suing Harrah’s Cherokee Casino and IGT Inc. –– the manufacturer of the slot machines –– for damages related to her injuries.

The case stems from an incident that occurred in March 2006 when Robinson was playing a slot machine at the casino and allegedly received a shock that injured her right hand and left her with lasting loss of feeling in her fingers.

“When Plaintiff inserted the card into the slot machine ... she was immediately shocked by the machine and fell to the floor. The individuals who accompanied Plaintiff to Harrah’s Cherokee Casino attended to her and it was immediately reported to the Defendant Manager on the floor,” the civil complaint reads.

Her attorneys allege that Robinson suffered personal injury, lost wages, and incurred medical expenses as a result of the accident. But the case hasn’t been as simple as determining who, if anyone, was at fault for the defective slot machine.

Robinson’s lawyer, John Hayes of Charleston, S.C., filed the case in Jackson County Court. But the defendants in the case, Harrah’s Cherokee Casino and IGT Inc. can’t agree where the case should be heard.

Last month, legal counsel for Harrah’s Cherokee Casino and Tribal Gaming Casino Enterprise asked a judge in Jackson County Superior Court to move the case to tribal court, arguing that a failure to do so would “adversely affect the tribal sovereignty of the Eastern Band of Cherokee Indians.”

Attorneys for IGT Inc. –– a publicly traded global gaming company –– argued that because neither the company nor the plaintiff resides in Cherokee, tribal courts should not have jurisdiction over their portion of the case.

Hayes said after talking to the casino’s attorney, he agrees the proper place for the case to beard is in tribal court. Hayes said he expects Judge Zoro Guice to issue an order that will move the case to tribal court.

Tribal casino gets OK for gaming floor alcohol

Harrah’s Cherokee Casino may soon serve alcohol on the gaming floor, after receiving an unofficial go-ahead from a state attorney.

The casino has already been offering customers beer, wine and mixed drinks at restaurants and lounges in its adjacent hotel. Bringing alcohol to the floor, though, will be the bigger moneymaker for the casino.

Harrah’s had prohibited players from downing alcoholic drinks on the gaming floor due to uncertainty about a state law that bans gambling at businesses that serve alcohol.

“We had to be clear on the law,” said Bob Blankenship, chairman of the tribe’s Alcoholic Beverage Control commission.

But according to John Aldridge, special deputy attorney general, Harrah’s would not violate any law by serving alcohol on the casino floor.

In a letter to the state ABC commission, Aldridge wrote that the state law only impacts businesses that allow illegal gambling.

Since an agreement with both the state and federal government allows gambling at Harrah’s in Cherokee, the law would not be applicable.

According to Blankenship, all that’s left in the process is the tribal council’s formal approval. Tribe members approved the sale of alcohol on casino premises, but nowhere else in Cherokee, over the summer.

It will take about a week for alcohol to hit the casino floor after the tribal council passes the measure, Blankenship said.

Compromise ends tug-of-war over who will be Harrah’s liquor distributor

While the addition of alcohol sales at Harrah’s Cherokee Casino and Hotel will undoubtedly be lucrative for the Eastern Band of Cherokee Indians, they won’t be alone in reaping a windfall.

Harrah’s will order all its liquor from the ABC stores in Sylva and Bryson City, which in turn will benefit the town’s coffers. The tribe does not have its own ABC store, and thus had to look to neighboring locales for its liquor.

Tension inevitably erupted between the ABC boards in Sylva and Bryson City at first, as each clamored at the chance to be Harrah’s supplier — and reap the profits and tax revenue off each bottle.

Typically, restaurants and bars buy liquor from the ABC store in their own town or county. In this case, however, the Cherokee Reservation straddles Jackson and Swain counties. Harrah’s itself lies on the Jackson County side, giving the Sylva ABC store de facto standing. But Bryson City is physically closer.

A compromise worked out between the Bryson City and Sylva ABC boards created a special joint board to exclusively handle alcohol sales to Harrah’s. They will share profits evenly.

N.C. Representative Phil Haire, D-Sylva, and Jackson County Commissioner Tom Massie encouraged the two ABC boards to work together.

“Half of something is better than 100 percent of nothing,” said Massie, adding that both counties would be affected by the addition of alcohol at the casino.

“We’re the ones that are going to have to deal with any problems coming from alcohol sales on the reservation, depending on whether they go east or west,” said Massie. “If we’re going to get the problems, we should get some of the revenues.”

Bryson City’s ABC board is admittedly doing most of the work, primarily since it has extra warehouse space to handle the added inventory, according to Laurie Lee, an auditor with the state’s ABC commission.

“The day-to-day work is handled by Bryson City,” said Lee.

Bryson City will order alcohol, provide warehouse space and take orders from the casino, according to Monty Clampitt, chairman of the Bryson City ABC board.

The Sylva ABC board’s only tasks are to “maintain the alcohol permit” for the joint operation and appoint members to Bryson City-Sylva ABC board.

However, both boards will advance $7,500 to cover initial start-up costs.

“The cost is almost nothing,” said Clampitt. “We have the warehouse space already. Labor would be provided by current employees.”

Alcohol for the casino will be stored in Bryson City’s old warehouse, while the new warehouse, built last year, will continue to be used for basic store operations.

The tribe plans to handle law enforcement, thus receiving the customary 5 percent of ABC profits designated for the local police station. The remaining profits will be split evenly between the Bryson City and Sylva ABC boards.

The two boards had been working on an agreement since September and finally signed a contract in mid-October. The state ABC commission formally approved the merger in mid-November, paving the way for Harrah’s to starting offering liquor drinks.

“I think this is a good compromise,” said Massie. “I think it benefits all involved.”

When asked about how much he expected his ABC board to profit from the expansion, Clampitt replied, “My crystal ball’s broken.”

For now, the takeover is going smoothly, according to all parties involved.

“It’s a new venture and we are proceeding as responsibly and carefully as we can,” said Charles Pringle, spokesman for Harrah’s Cherokee.

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