False Profits Washington State Panel Says A Quarter Of Tribal Casinos Hit Hard Times

Indian casinos, once viewed as financial salvation for Washington’s tribes, haven’t been doing as well as many had hoped.

Of 12 tribal casinos approved by the state, one closed last summer and at least three more have stopped making required community-impact contributions, said Carrie Tellefson, director of policy, planning and support for the state Gambling Commission.

“I don’t think anybody expected this,” Tellefson said. “We never thought they might be unprofitable.”

State officials say they’re willing to study ways to help the struggling gambling halls, but no easy solution is evident.

“I don’t know how long they will hold on,” Tellefson said. “They’re not profitable, but if they are employing people, they are doing some good for the tribes.”

Under a 1988 federal law, the state is required to allow tribal-run gambling. The casinos were seen as a way to pay for tribal programs, but some are barely making enough to keep their doors open.

The Lummi Casino near Bellingham closed in August, citing competition from expanded British Columbia gambling.

The Swinomish Casino near Anacortes, Seven Cedars Casino near Sequim, Clallam County, and the Nooksack River Casino in Deming, Whatcom County, have cut staff and skipped payments to local agencies.

Officials from those three casinos deny that closure is imminent.

“The outlook is challenging, but we’ve been able to stabilize the operation by trimming expenses,” said Bill Wirth, marketing director for Nooksack River Casino, where employment has dropped from a high of 400 to 170.

A three-year moratorium on renegotiating casino compacts expired this month, Tellefson said. Next month, the Gambling Commission will begin discussing whether revising the agreements can help the casinos.

But Tellefson said the commission cannot allow what the tribes want most: slot machines, which are banned by state law.

One area open for discussion may be the community-impact payments, she said. The commission has been reluctant to crack down on casinos having trouble making the payments.

“It’s a tough issue because the remedy is to take the tribe to federal court and have them shut down, which is really extreme,” Tellefson said.

Under their compacts with the state, the tribes agreed to contribute 2 percent of their winnings to community organizations, usually law enforcement departments.

Wirth said the Nooksack River Casino, which gave the Whatcom County sheriff’s office more than $250,000 in 1996, paid nothing last year. He said tribal officials and the sheriff are negotiating a resolution.

Jerry Allen, assistant general manager of Seven Cedars, said the Jamestown S’Klallam Tribe is making payments on its community-impact debt from before 1997, but made no contribution for last year and believes the 2 percent required by the compact is too high.

“We’re a break-even proposition,” Allen said. “We’re still not able to create any sort of revenue stream back into the tribe.”

While tribes in Western Washington negotiated casino compacts with the Gambling Commission, the Spokane and Colville tribal groups in Eastern Washington opened casinos without state approval and included slot machines. Those operations are the subject of a lawsuit now before the 9th U.S. Circuit Court of Appeals.