Casino news source: Great Falls Tribune - http://www.greatfallstribune.com
Browning casino's first year ends in a push
By ERIC NEWHOUSE
Tribune Projects Editor
BROWNING — This weekend marks the first anniversary of the Blackfeet Tribe's big casino, but officials are reluctant to say whether their $7 million bet is paying off.
"Our financial position at the end of 2006 was not as strong as we had hoped it would be," said Dennis Fitzpatrick, manager of the Glacier Peaks Casino.
"Our revenues were very good, but our expenses were even greater, so we let our managers go," said tribal Treasurer Joe Gervais.
That situation has finally turned around, Gervais said.
"They've had well over $10 million in revenue this year and they've turned a small profit, but they're in a rather large hole due to their debt load," he said.
Both officials refused to make public an audit of Glacier Peaks done by the Joseph Eve accounting firm in Great Falls for the last three months of 2006.
Shawn Pensoneau, a spokesman for the National Indian Gaming Commission in Washington, D.C., said tribes are required to have regular audits and file them with the NIGC, but the audits are not released to the public.
"The auditors told us they couldn't tie revenues into any existing documentation," Gervais said. Tribal officials stressed that those problems are being resolved.
"Our early management was not good, but we have been correcting those problems ever since," said Earl Old Person, chief of the Blackfeet Nation.
"It kind of started off at the wrong time, in the fall," Old Person said. "And we had too many people working for us."
Fitzpatrick agreed, noting that payroll expenses peaked at $278,676 during the first two weeks of October last year, but dropped to $94,200 for the last bi-weekly payroll this month after the casino cut two-thirds of its staff.
"Corrections were being made (last December) but they weren't being made by management recommendation," Fitzpatrick said. "They were being made on my prodding.
"Unfortunately for the community, our biggest expense was in payroll, and cutting jobs meant cutting local people's employment," he added.
The casino currently employs about 100 people, down from 308 employees in early October 2006, he said.
Because of a smaller-than-expected number of players, the casino returned 150 of its 500 electronic gaming machines, Fitzpatrick said. Officials never considered reducing payout, he added.
"Our philosophy has been that the more you pay, the more people play," he said. "If we had started down the road of taking more from the machines, we would have reduced people's incentive to play."
Another economic move was to downsize the casino's fine dining room to a gourmet grill with cafeteria-style service, he said.
"People liked the restaurant, but it was way too expensive to operate so we'll go back to our original plan and allow it to grow," Fitzpatrick said.
That was the heart of the problem, said Gervais, who sits on the Siyeh board as tribal treasurer.
"We forgot where we were coming from," he said.
Gervais said the tribe originally planned to build a one-story, 22,000-square-foot casino for $3.2 million.
Then the tribe hired an architect and a facility manager, and the project expanded to a two-story, 30,000-square-foot building that carried an initial price tag of $6.4 million.
"Our business plan had been predicated on a local market, but then we hired Gary Green (as manager) and he brought Las Vegas to us," Gervais said.
Green launched an ad campaign in places such as Calgary, Lethbridge, Whitefish, Kalispell and Great Falls and announced he was bringing in 12 to 15 busloads of gamblers per week from those cities.
Poor cash flow, however, forced the tribe to loan the casino $50,000 in December, the same month Green wrote a letter to vendors apologizing for late payments and promising improvement.
The Siyeh board unanimously voted to fire Green on Feb. 1.
It was later discovered that he reportedly also was fired as manager of the Thunderbird Casino in Norman, Okla., and a Shawnee tribal newsletter accused him of leaving that casino with steep debt — much of it in unpaid vendor fees.
Glacier Peaks Casino officials were hoping for a strong summer season, but Gervais said revenue reports showed Labor Day weekend was stronger than North American Indian Days.
Although the tribe amended its ban on alcohol to allow the casino to continue its alcohol sales during the event, that didn't help profits much, Fitzpatrick said.
"Our casino was full during North American Indians Days, but it wasn't the beer that brought them in," he said. "There's too much competition from convenience stores and other outlets. It was more our air conditioning and our grill. It was very hot out, and they took refuge here."
In fact, summertime revenues weren't that much different from other months.
"This is a casino that's based on the local region," Fitzpatrick said. "I think our tourism revenue replaced whatever revenues we lost due to local people recreating outside."
That is an improvement, Gervais said, adding that the previous gaming hall in Browning had stronger revenues in the winter than in the summer.
"We're not a destination for tourists," Fitzpatrick said. "We don't have lodging and hookups for RVs. Until we do, we'll only get tourists for a few hours in the middle of their trips."
He said Siyeh Corp. has put together a feasibility study for a 90-bed hotel and has begun talking with a banker about another loan. Gervais wouldn't estimate what the venture might cost.
"If everything works out, we could get it started in the spring," Fitzpatrick said.
"A lot of people have been inquiring about where they can stay," Old Person said. "And that's not only for the casino, but for everything around here."
Reach Tribune Projects Editor Eric Newhouse at 791-1485, 800-438-6600 or enewhouse@greatfallstribune.com |
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