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Players angle for Portland casino

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Articles - November 2010
Thursday, October 21, 2010
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Players angle for Portland casino
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1110_Casino13
Grande Ronde tribal chairwoman Cheryle Kennedy at Spirit Mountain Casino, Oregon's most successful casino. Spirit Mountain employs 1,500 people and funds tribal programs. // PHOTO BY ANTHONY PIDGEON
Until recently, the player that seemed to have the best shot at building a mega-casino near Portland first was the Cowlitz tribe of Washington. Led by the charismatic David Barnett, son of the tribal chairman who led the Cowlitz to regain federal recognition in 2002, the Cowlitz entered into a partnership with the gambling-rich Mohegans of Connecticut, purchased land 30 minutes north of Portland in La Center, and gained a Final Environmental Impact Statement from the Bureau of Indian Affairs long before the Warm Springs did.

But the Cowlitz tribe has run into serious legal problems. A February 2009 U.S. Supreme Court ruling against the Narragansett tribe shot down that tribe’s attempt to take land into trust to form a reservation around a casino after regaining federal recognition. That is exactly what the Cowlitz are trying to do in La Center, so the precedent could prove a deal killer.

The Cowlitz also face a crisis in leadership after an auto accident involving the front-man Barnett and his girlfriend left him seriously injured in November 2009. The Vancouver Columbian later reported that Barnett and his girlfriend both allegedly suffered from cocaine addiction and had tested positive for drugs after the accident.

Cowlitz tribal chairman William Iyall says Barnett is recovering from his injuries and the casino project is very much alive despite the court decision, with “a steady dialogue” between the federal government and the tribe. “It took us 26 years to get federal recognition,” Iyall says. “Hopefully we’ll get a decision (on the trust land for the casino) sooner than that.”

But even if the federal government approves the trust land and the legal issues stemming from the Supreme Court decision are somehow resolved, the Cowlitz will still need to negotiate a compact with the state of Washington before breaking ground. Another challenge involves the once-mighty tribe investing in the deal, the Mohegans, who are struggling with debt and recently laid off 475 people at their Foxwoods Casino in Connecticut.

“We believe the Cowlitz casino is pretty much dead in the water,” says Mark Hohlt, rules and policies manager for the Oregon Lottery.

The wobbly foundation of the Cowlitz casino represents a huge relief for the player with the largest stake in stopping the migratory flow of gamblers from Oregon into Washington: the Oregon Lottery. The Lottery pulls in twice as much in gambling revenues as all nine tribal casinos combined. State government has grown increasingly dependent on this money to fund schools, economic development and parks. Since coming into existence in 1984, the lottery has steadily grown its offerings and today pulls in the bulk of its bounty from video poker and slots at restaurants and dive bars sprinkled around the state, most prevalent in the Portland area.

The lottery contributes more than a billion dollars each biennium to education, parks and selected economic development investments.

But lottery revenues are sliding as consumer confidence wanes and the job market remains weak. The smoking ban has also taken its toll on gambling in taverns. Overall, gamblers are spending less time at the machines and betting less, says lottery spokeswoman Mary Loftin. “Habits have changed,” she says. “It’s a tightening of the belt.”

Even as the trend toward a “new austerity” convinces recreational gamblers to keep their money in their wallets, the state is under pressure to continue pulling in more gambling money. The same pressure applies to everyone else in the game, including some of the most powerful players in Vegas, Atlantic City and tribal gambling. The Wall Street Journal recently reported that some of the richest tribes in the nation have been unable to pay off their debts to investors, resulting in tighter credit, tougher loan terms and higher interest rates. Oregon tribes saw their casino revenues drop by $20 million in 2008, and Portland economist Robert Whelan estimates they fell by another 7% to 8% in 2009. Oregon Lottery revenues dropped by $134 million in fiscal 2009.

If a more cautious approach to consumer spending proves to be the long-term trend it appears to be, the growth engine driving much of this would-be prosperity would not be the recreational gambler, who would be sitting out this round in the interest of fiscal responsibility, but rather the problem gambler, who is unable to stop playing due to addiction issues. That raises a large question: Are there really enough problem gamblers living in or passing through Oregon to undo 150 years of past wrongs to the tribes, to rescue a state budget from looming shortfalls, and to create the thousands of private sector jobs that businesses have been unable to generate during the downturn?

It seems unlikely. But don’t expect Pitt and Seeger and their allies on and off the Warm Springs Reservation to fold their cards any time soon. The same goes for Studer and Rossman and their high-powered backers, and even the Cowlitz and the Mohegans. The pot isn’t as sweet as it used to be, and the odds are as long as they’ve ever been, but every gambler knows that you have to play to win.



 

Comments   

 
Bob Brown
0 #1 Interesting article ... until the silly conclusionBob Brown 2010-10-25 14:10:29
'Problem gamblers' represent a very small percentage of those who choose gambling for recreation, studies have shown them to be less than 2%.

Though some are tightening their belts because of today's economic problems, gambling is likely to remain a significant choice for entertainment, and its revenues will return to growth when the economy recovers.

It's too bad you weren't able to write a compelling conclusion to an interesting story.
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Melanie Rivers, Cowlitz
0 #2 CT CasinosMelanie Rivers, Cowlitz 2010-10-26 08:44:13
One quick comment to the editor-the Mohegan tribe of CT runs Mohegan Sun Casino in Uncasville, CT, not Foxwoods.

Foxwoods is run by the Mashentucket Pequots of Ledyard CT.
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A real friend of the Gorge
0 #3 Forgot a friend of the Grand RondeA real friend of the Gorge 2010-10-26 16:15:16
Another Grand Ronde "FRIEND" is the group under the guise of "Friends of the Gorge" who receive a great deal of funding from the Grand Ronde and Oregon Restauranters Assn.

Otherwise there seems to be plent of gamblers to go around, the state shouldn't worry as the term monopoly fits, they are already all over the state, and the Grand Ronde make $200M a year, when will they make enough? Guessing never.
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monkeygrudg3
0 #4 Not-so-serious questions of feasabilitymonkeygrudg3 2010-10-27 10:00:40
Pretty good article, but mostly I take issue with what others said. For example, I fail to see how a Cascade Locks casino (or a Cowlitz, for that matter) would take $70m from Oregon's lottery; most people who gamble probably do not focus on one avenue--I imagine people would just add the casino(s) to what they currently spend on the lottery.

That said, a casino is a destination, quite different than a corner grocery or convenience store selling lottery tickets and scratch-offs... so that argument holds no water.

Additionally, I put more faith in the Cowlitz casino becoming a reality than the author does. The Cowlitz is not the only Tribe affected by the Carcieri decision; the reason a "fix" has not been put in place has more to do with politics (as usual) than whether or not it should be done. It is inevitable.

Resistance is futile.
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Ben J
0 #5 Wood Village casino goes down in flamesBen J 2010-11-03 11:25:57
UPDATE: Backers of the mega-casino were soundly defeated in the polls Tuesday, as more than twice as many voters opposed Measure 75 than supported it.
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