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NIGA’S ERNEST L. STEVENS, JR.: GAMING IS AN EXERCISE OF INDIAN SELF-DETERMINATION A Sportsbook Was a Smart Bet for the Mississippi Band of Choctaw Indians
CHAIRWOMAN LYNN VALBUENA: “WE TREAT OUR EMPLOYEES LIKE ONE BIG FAMILY HERE AT SAN MANUEL.”
BUILDING AN ATTRACTION, BEYOND THE GAMING FLOOR
GOVERNOR STEPHEN ROE LEWIS HOW SELF-MANAGED GAMING POWERS THE GILA RIVER INDIAN COMMUNITY
GAMING ON THE PLAINS ACTIVE SHOOTER PREP: DOING YOUR BEST TO PREPARE FOR THE WORST FINDING SLOTS IN THE FOREST THE HOUSE ALWAYS WINS: IS THIS THE CASE WITH FREE-PLAY?
For the Gila River Indian Community,
POWERS THE ECONOMY By Andrew Ricci
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Stephen Roe Lewis, Governor of the Gila River Indian Community
PHOTO COURTESY GILA RIVER INDIAN COMMUNITY
GAMING IS THE ENGINE THAT
PHOTO COURTESY GILA RIVER INDIAN COMMUNITY
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tephen Roe Lewis, Governor of the Gila River Indian Community, comes from a family with a long history of service and giving back to the community that they call home. His mother was an educator who went to law school, worked for the state of Arizona, and served as a children’s court judge for the Community’s Tribal court system. His father, Rodney Lewis, was the Community’s first attorney, and when he passed away last year at the age of 77, a headline in the Arizona Republic referred to him as “Tribal trailblazer” and “a force behind [the] landmark water settlement.” He was the first Native American to pass the bar in Arizona and the first Native American to argue a case — which he won — before the United States Supreme Court. His advocacy and legal representation led to the passage of the historic Arizona Water Settlements Act. For Governor Lewis, his father’s example provides a perspective of the past that he uses to anchor his own leadership for the future. “My father was really a trailblazer and a visionary with regards to water and to protecting our sovereignty,” Governor Lewis said in an interview with Native Business Magazine. “He was there at the table negotiating the first compacts with Tribes in Arizona in the 1990s, and he saw economic development as really one of those engines that would sustain us for the future.” “He saw gaming as an important part of that — not the end all, but an important part,” Lewis continued. “I see myself as being a caretaker of all my father’s work and his decisions, and being a defender of all the achievements that my father had so dearly fought for.” The Water Settlement was the culmination of a century-long dispute that is deeply ingrained in the Tribe’s history. The Gila River Indian Community is made up of two distinct Tribes — the Akimel O’otham, which means “the people of the water,” and the Pee-Posh, or the Maricopa. The-Pee Posh originally came from the Colorado River, and when they arrived in the area that is now metropolitan Phoenix, they settled there, forming a military alliance with the Akimel O’otham. Today, the two Tribes still exist within the 23,000-member Gila River Indian Community, each retaining its own distinct language, culture and ceremonies. Governor Lewis says one of the defining moments of the Tribe’s history was the diversion of water on the Gila River more than 150 years ago. “That was devastating to us, because we were historically agricultural and farmAP R I L 2 0 1 9
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At Pearl River Resort, the Mississippi Band of Choctaw Indians
DEMONSTRATE THE VALUE OF SPORTS BETTING IN INDIAN COUNTRY
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n May of 2018, the Supreme Court struck down the Professional and Amateur Sports Protection Act (PASPA), declaring the law that has limited sports betting across the vast majority of the country since 1993 as unconstitutional. This returned the right to individual states to determine their own laws with regard to sports betting. Shortly thereafter, in August, the Mississippi Band of Choctaw Indians opened the first Tribally owned and operated independent sportsbook in the country at their Pearl River Resort. When the sportsbook debuted, resort guests could visit the Sportsbook at Timeout Lounge to watch games and place bets. Since then, the Tribe’s sportsbook operations have expanded to include a mobile app that allows guests to place bets anywhere on resort property, and the Tribe recently introduced kiosks at three different facilities. “Due to our unique geographic location in the south, we decided that instead of going the management contract route or
bringing a four-wall provider in, with our footprint, our clientele, and our customer database, we decided that we should open our own independent sportsbook,” said Neal Atkinson, Director of Table Games (Poker, Bingo and Sportsbook Operations) at Pearl River Resort.
find a vendor to provide the actual betting systems. “We didn’t have a huge range of providers that had experience in the United States regulatory market,” Atkinson said. “That’s part of the reason that the provider we picked was IGT. We already had an existing business relationship with them, they had a proven track record in Nevada, they had a kiosk product on the horizon, and they had a proven mobile product with one of their customers in Nevada.” With a hardware and software provider in place, the Tribe then selected Betgenius as the data provider for all of the sports data feeds. Finally, they had to find a bookmaker for their staff. “Part of the regulation is that we still do have what is referred to in the business as a ‘bookie’ on property,” Atkinson said. “He’s our Assistant Director of Sportsbook, and I was very fortunate to recruit him from the Vegas market. “He had roughly 18 years of experience in the sportsbook market, had worked
“Do not wait one minute if you think you want to open a sportsbook. Either get a consultant that knows the sports business for you or start hiring talent that has experience in sportsbook platforms.” – Neal Atkinson, Director of Table Games at Pearl River Resort In setting up their sports betting operations, Atkinson said that time limitations were a major factor in some of the Tribe’s choices. Given that there were only a few months between the PASPA ruling and the start of football season, the Tribe needed to act quickly and overcome a few key logistical challenges. First, they had to
PHOTO BY ISTOCK BY GETTY IMAGES
By Andrew Ricci
Neal Atkinson
PHOTO COURTESY DICKINSON WRIGHT / BAME PR
many years, had a provision that made it clear that once sports betting was allowed in the state of Mississippi, that they would be allowed to operate a sportsbook, which is why they were able to ramp up so quickly. “Tribes may have two or three games that they’re authorized for — slot machines, blackjack, something like that,” Hart continued. “They may not have sports betting listed as a particular game they can offer, so if they have to go through a compact amendment before they can operate sports betting, that could take a year to get through the compacting provision. It can be a pretty long process and it becomes more complicated if the Tribe has some exclusive rights.” While other Tribes work through these provisions, the Mississippi Choctaws are moving forward at full speed. Since they went live, Atkinson says that college and professional football not only met, but actually exceeded their expectations. The Tribe does not disclose its revenues, but he says that the sportsbook is currently doing approximately double what their bestcase projections would be. There have also been other pleasant surprises along the way. “We were anticipating once football season was winding down, that we would actually slow down a little bit and be able to catch our breath and analyze things,” Atkinson said. “But we found that college and pro basketball was almost even more popular than football was. So even now with basketball, maybe your average bet has gone down but your number of tickets has almost doubled.” Today, Pearl River is offering a full slate of sports. “If it’s a sanctioned college or professional sporting event, we are offering it,” Atkinson said. “That includes MMA and boxing events. We also offer all of the motor sports — just about everything but horse racing.”
PHOTO COURTESY LEWIS ROCA ROTHGERBER CHRISTIE / BAME PR
casino gaming, so worrying about that is probably a good idea.” Atkinson said that was one of the early lessons that he learned at Pearl River. “A sportsbook is not as profitable as slots, and it’s very volatile,” Atkinson said. “With a slot machine, yes you can have some short-term volatility, but over the year that machine is going to hold what it’s programmed to hold. Sportsbooks are at the mercy of the outcome of sporting events. “Because we’re an independent book, we have our own established risk profile,” he continued. “We learned that we have to actively manage our risk profile and maybe on some local high-interest things, our betting lines might be slightly higher than what the nationwide average is. We can’t just turn that over to the computer feed to do that and be the same as everybody else is; we have to be able to adjust those lines to our local profile to manage that risk profile properly.” Another legal issue that Tribes interested in opening sportsbooks will have to deal with is the compact process. For Tribes like the Mississippi Choctaws and others who have quickly moved to allow sports wagering, they share a common trait: there are no difficulties with their compacts that require additional negotiations with the state over exclusivity or other things. “I think we’re seeing the initial group — who don’t have as much in the way of entanglements — starting to operate sports betting,” said Steve Hart, a Partner at Lewis Roca Rothgerber Christie who represents Tribes and Tribal Gaming Commissions throughout the Western United States. “For a number of Tribes, they will have to work through compact provisions and perhaps some legislative action to get to a place where they can operate sports betting. He says that in the Mississippi Choctaw’s case, their compact, dating back
PHOTO COURTESY PEARL RIVER RESORT
for independent books in Vegas over the course of his career, and was just a perfect fit for us,” he continued. “His knowledge of being able to understand the trading aspect of the business is what we needed being that we were an independent sportsbook.” While the Mississippi Band of Choctaw Indians moved quickly to get their sportsbook established, Greg Gemignani, a Las Vegas-based attorney at Dickinson Wright whose practice includes gaming and online gaming law, says that with the PASPA ruling, Tribes would be wise to start learning about sports wagering now, if they are going to offer sportsbooks as part of their Tribal gaming operations. “There’s a lot of hype out there,” Gemignani said. “There’s a lot of bad information out there. There’s a lot of good information as well, but learning about it and understanding it I think is going to go a long way toward helping Tribes decide how much they want to invest.” Gemignani also said it’s important for Tribes to remember that sports wagering carries substantially higher risk — and lower margins — than other gaming products that they are more familiar with. “There’s no theoretical win on sports like there is with blackjack or slots, where mathematically you have significant advantage as the house,” Gemignani said. “A lot of your margins depend on who your risk manager is and whether they’re better than your players are. So, if you have a favorable compact, the real challenge once you begin operations is having a risk manager that knows what they’re doing, because unlike other forms of gambling, you really are in the bet. “You can’t be a good craps player, right?” he continued. “The dice roll the way the dice roll. You can’t really be a good slots player. But you can be a good sports better. There is a certain skill in managing risk for sports, which is totally different than
Steve Hart
Gregory Gemignani
KEVIN P. THORNTON
Built a Career A
Manufacturing Tables & Supplying Casinos From the Ground Up — Literally
t the cusp of the Tribal gaming industry, Cherokee Nation entrepreneur Kevin P. Thornton launched a business manufacturing tables and supplying casinos. Nearly three decades later, he recounts his journey — from woodworking in his garage to earning Tribal clients across the United States, to building table games for gaming markets around the world from Mexico to Macau.
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In the early 90s, as a “hotshot” wildland firefighter for the U.S. Forest Service, Kevin Paul Thornton was injured in the line of duty. Little did he know the incident would lay the foundation for his lifelong career. “I had a long, drawn-out recovery. In my recovery time, back in ’92, I started building tables in my garage,” shared Thornton, who has always been an avid woodworker.
For MSC Gaming, Thornton oversees manufacturing of their gaming tables and serves as the product specialist and quality control manager for their line of playing cards.
By Native Business Staff
Back then, his mom worked in the American Indian health arena and regularly traveled to visit and consult with Tribal clinics on reservations across California. “She was telling me that Tribes are starting to get into gaming. She put me in contact with the right people — and I went in there and asked if I could build their tables,” Thornton said.
ENTREPRENEURSHIP
One day, Thornton, a registered member of the Cherokee Nation of Oklahoma, brought the San Manuel Band of Mission Indians, a new table he had made for them to view, “and they started purchasing my tables for their upcoming expansion. That’s how my business started,” he told Native Business Magazine. “Then I went to Morongo and did the same thing. Then Palm Springs started, and I worked with the [Agua Caliente Band of Cahuilla Indians] Chairman Richard Milanovich [a leader in the effort to legalize and grow the state's Tribal gaming industry] and his assistant Nancy,” said Thornton, who was instrumental in supplying that casino with nearly everything it needed for its gaming floor to open its doors for business. Casinos across Southern California began to turn to Thornton. Thornton officially launched KP Gaming Supplies, Inc.
sion Indians], and then Pechanga started [owned by the Pechanga Band of Luiseno Mission Indians],” he continued. Some three decades later, Thornton still counts some of these Tribal casinos as clients. Thornton’s focus was poker and blackjack tables. His garage-based operations were short lived. “When I got my first large order of tables, I rented a little shop and started growing KP Gaming. I got affiliated with the National Center for American Indian Enterprise Development, and went down and had meetings with them. They showed me how to do a business plan and get registered and get proper documentation to have a legitimate business,” he shared. The name “KP Gaming” came about by happenstance — and it stuck. While waiting in a long line to acquire his business license, Thornton finally arrived at the
PHOTOS COURTESY MSC GAMING
Kevin P. Thornton (left) served as CEO of KP Gaming from 1993 to 2010. Today he serves as Executive Director of MSC Gaming, a full-service gaming supply company based in Los Angeles. Blaise Verdi (right), Director of Sales for MSC Gaming, learned his table game trade knowledge from Thornton. Matt Campbell (center) is the founder and CEO of MSC Gaming.
in 1994 as a provider of high-quality gaming supplies, focusing his business on supplying Tribal gaming facilities. His company grew to become the largest supplier of gaming supplies in California and the largest Native American supplier in the United States. “After that, I went to Spotlight 29 [owned by the Twenty-Nine Palms Band of Mission Indians] and Fantasy Springs [owned by the Cabazon Band of Mis-
counter, and the attendant asked, “What’s the name of your business? Sir, you have to have a name of a business to get a business license.” So Kevin P. Thornton used his first two initials. “I said, okay, just write KP Gaming,” he laughed. Thornton opened his first business bank account in similar, casual fashion — using the change sitting on top of his bedroom dresser. “I started it with $123 and change, and then it grew from there.
I started the business in the right time. I had an ‘in’ through my mom working for Indian health; she knew all the Tribal people. Then I went in as a Native American business owner, and it just took off from there,” Thornton said. As a veteran woodworker, Thornton could master the tables and the rail. “I could duplicate that. What I needed was the drop boxes and the other equipment,” he said. “I went to a family friend who was a machinist, and he made the parts that I needed. And then once I started getting more business, then the other suppliers and chairs contacted me and wanted me to sell their products.” Thornton started off as a manufacturer of gaming tables, and quickly became a full casino supplier — complete with chairs, chips and more. In the beginning, Thornton used his lines of credit to capitalize KP Gaming. It also helped that customers put down a 50 percent deposit. “That kind of helped me with financing, but anything else, I financed on my own with my charge card. My wife and I probably had five or six charge cards; I had $20,000 limits on all of them, and all of them were maxed out. But we got through it.” It’s All About Relationships Back then, Tribal Councils and the Tribal Chair handled all the business. “This is before Tribal gaming commissions were put in place,” Thornton said. “I just went to the Tribal meetings. What was beneficial for me was knowing Indian politics and knowing how the procedure goes on Tribal reservations.” Meanwhile, other companies started swooping in to address the Tribes, most of them sporting slick suits. “I just dressed nice in a pair of jeans and a button-up shirt,” Thornton said. The Cherokee member’s personable approach worked to his benefit. Most everything boils down to communication, Thornton says. “I think it comes down to hard work and customer service — that’s the main thing,” he says. While relationships are everything, Thornton is always aware that Tribal Councils change. “You have to kind of walk a straight and narrow line and not get affiliated with just one person or another, because it can devastate you. Because when that individual leaves Council or his or her term is up, and somebody else comes in, you gotta start from ground zero again.
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San Manuel Chairwoman Lynn Valbuena
REFLECTS ON THE PAST, PLANS FOR THE FUTURE By Native Business Staff
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an Manuel Casino is widely considered a powerhouse in the Southern California gaming industry. But prior to 1986, when San Manuel introduced its first gaming facility, dirt roads snaked across their small, mountainous land base. Five HUD homes stood on the reservation; jobs were a rarity; and often-
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times, the annual Tribal budget hovered around $300. The ancestral homelands of the Serrano people once covered a sizeable portion of Southern California — an estimated 7.3 million acres, extending to East Los Angeles, up to the high desert, and down to Twenty-Nine Palms. In 1891, the federal
government established a reservation for the Yuhaaviatam Clan of Serrano (San Manuel Band of Mission Indians) — totaling a mere 640 acres, in comparison. Today, the Tribe counts roughly 1,200 acres, because the Tribe pursues a goal to purchase land surrounding the reservation to accommodate a growing Tribal population and for
Lynn Valbuena, Chairwoman of the San Manuel Band of Mission Indians, National Indian Gaming Association former elected officer, American Gaming Association Gaming Hall of Fame inductee, and recipient of an Honorary Doctorate from Northern Arizona University in 2018
PHOTOS COURTESY SAN MANUEL BAND OF MISSION INDIANS
The San Manuel Band enjoys positive relations with nearby cities, giving back to the surrounding community. The Tribe also protects the livelihood of 4,900 employees. With the current casino expansion underway, the Tribe’s employee base is expected to increase to 7,500 when completed. economic development. “We have a master plan in place, and we’re always doing what we can to acquire properties that are contiguous to or adjacent to the reservation,” Lynn Valbuena, Chairwoman of the San Manuel Band of Mission Indians, told Native Business Magazine. On April 17, 2018, Chairwoman Valbuena was sworn-in for her third consecutive term as Chairwoman of the San Manuel Band of Mission Indians. She’s served in Tribal politics for more than 40 years, holding various elected positions within her Tribal government — including Chairwoman (three terms, lasting 2014 to 2020), and a past term as Chairwoman (1994 to 1996), Vice Chairwoman (2008 to 2012), Secretary/Treasurer from the late-1980s to 1994, and as member of the Business Committee (akin to a Tribal Council). The Yuhaaviatam, or People of the Pines, are her greatest priority. Gaming has empowered Valbuena and the Business Committee and General Council to provide important services and programs to the Serrano people. The Tribe offers healthcare, education, culture and language programs to its approximately 250 Tribal members — including about 130 youth. “My personal focus and priorities as an elected leader for my Tribe have always remained consistent. I know we are always looking out for the best interests of our Tribal community, youth and elders,” Valbuena said. “Without our elders and our culture,
we wouldn’t be doing what we do today. We now have a youth council where we mentor the younger children on our reservation, because they are our future leaders of San Manuel.” Gaming has paved the way for infrastructure, jobs and economic opportunity on the San Manuel Indian Reservation — nestled at the foothills of a high and rugged mountain range, the San Bernardino Mountains. “We’ve made a lot of improvements now, where we can provide for our own Tribal members and don’t have to rely on the federal government as much. We’ve seen a lot of growth here at San Manuel,” Valbuena said. A Tribal Credit Union provides opportunities for Tribal members to build a home on the reservation. Valbuena notes there are 44 homes on the reservation today, but she distinctly remembers when only five HUD homes existed within reservation borders. Paved roads have since replaced the dirt roads that Valbuena fondly recalls traversing in her youth. “We are literally pushed against the mountains,” Valbuena explained, speaking from the San Manuel Tribal government center and community center, during a phone interview with Native Business in March. “It’s up on a hill; it’s a very steep road to get here. But as kids, it wasn’t a road, it was a dirt road. It was our playground. The current parking structure for the casino used to be orange groves and apricot groves. We would stand in line — just off to the side of the orange groves — with large brown paper sacks, waiting for the welfare truck to come up and give us commodities. I distinctly remember that,” Valbuena said. She continued: “It was no big deal for my cousins and I, and other Tribal kids my age to eat Corn Flakes and go outside and put the bowl under a water faucet and eat it with
water, because it tasted great when we added sugar to it. When we did get milk from the commodity truck or welfare truck, it was powdered milk, and powdered eggs.” Valbuena’s grandmother, who served as Spokesperson (now called Tribal Chairwoman) in the early 1950s, through her contacts with public officials helped to bring water and electricity to the reservation. “Over the years, our leaders have stabilized our infrastructure with state-of-the-art roads, utilities and water systems — which we never had on the reservation before,” Valbuena said. Things look different today. “Now we have our fire department right down the street, our department of public safety, our park across the street with a pavilion, where we can have community events and activities with Tribal Citizens. We have a gymnasium and fitness center downstairs on the first floor,” she shared. “Our Education Department, which provides educational and culture and language classes for our youth and adults, is also located on the first floor.” Meanwhile, the San Manuel reservation sits in the heart of a neighborhood. “We maintain very good relationships with our local communities. We need their support, and they need our support. It’s been a wonderful relationship with the City of Highland and San Bernardino City and County,” Valbuena said. Gaming: A Turning Point While entering the gaming industry marked a turning point for the Tribe, Chairwoman Valbuena is quick to point out that “it did not happen overnight.” She reflected on all the effort she and the San Manuel Business Committee and the entire Tribe, along with other Tribal govern-
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HIDDEN GEMS: By Suzette Brewer
At the beginning of the gaming industry in the Northern Plains, some operations got their start as weekly bingo games held in school gymnasiums, converted trailers or even, in some cases, church basements. Since then, however, things have changed.
PHOTO COURTESY
How Rural Casinos are Changing the Game in the Northern Plains
PHOTOS COURTESY SPIRIT LAKE CASINO MARKETING
The Spirit Lake Casino and Resort boasts a full-service marina and will host the 19th annual Walleye Classic as a part of the Casino Cup Walleye Circuit in North Dakota.
destinations for the whole family. “Indian gaming has really transformed the landscape for Tribes in the Northern Plains, who have done a great job in building truly unique destination resorts where people can bring their families,” says Mark Van Norman, former executive director of the National Indian Gaming Association who is now a private consultant. “The Tribes have turned what were originally modest facilities into gathering places for a wide variety of customers — it’s really a
social phenomenon.” According to a recent report from Bank of America/Merrill Lynch, Indian gaming has now captured a whopping 43 percent of the total gaming market in the United States, compared to Las Vegas, whose market share is around 10 percent. Moreover, according to the latest numbers from the National Indian Gaming Commission, Indian gaming grew nearly four percent in 2017, bringing Gross Gaming Revenues (GGR) to $32.4 billion.
PHOTOS COURTESY MHA NATION
Today, 32 years after the Supreme Court victory in California v. Cabazon, Tribes have gone from modest community bingo games that began as fundraisers for things like fire trucks and elder meals to sophisticated, state-of-the-art gaming facilities that offer a wide range of amenities, activities and events. From yacht cruises, golf courses and fishing competitions to “adventure packages,” wild horse sanctuaries and conference facilities, many rural Tribal casinos have now become vacation
The Spirit Lake Casino Hotel features a four-story indoor water park with water slides, pools and hot tubs.
The Four Bears Casino Yacht is available for both public and private tours and events.
The MHA Nation completed construction on a $47 million entertainment event center at Four Bears Casino in 2016. The facility is used for concerts, boxing matches, pool tournaments and rodeos.