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Winning the Gamble



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In the late 1960s, the San Diego Food Bank sent out a distress call because it was overwhelmed by demands from the Viejas Indian Reservation. Last year, the Viejas tribe donated $50,000 to keep the Food Bank operating.

Fifteen years ago, the tribe couldn’t keep the lights on at the Alpine reservation. Today, some of the brightest lights in entertainment—Bill Cosby, Jethro Tull, Leann Rymes and Crosby, Stills & Nash, to name a few—perform there. The tribe also has a major stake in its own bank, operates an RV park along with an outlet center that cost $53 million to build, and boasts the first McDonald’s on any tribal land. Some of the outlet stores there, including Liz Claiborne and Black & Decker, have posted the top sales in their chains.

Referring to the current energy crisis, tribal chairman Steve TeSam quips, “Maybe we’ll build a power plant. That’s what we need to do—diversify. I sound like a CEO.”

Indeed, since gambling—or as they prefer to call it, gaming—officially began off Viejas Grade Road in the small rural community east of San Diego, the quality of life for the tribe’s 275 members, half of whom live on the reservation, has vastly improved. So has the outside community, with more than 2,000 jobs added to the local economy.

Before, Native Americans couldn’t put up a house without a U.S. Housing & Urban Development grant. Bank loans are not available to them because they own the land as a tribe and not as individuals. That’s no longer true, since the Viejas tribe bought a 75 percent interest in Borrego Springs Bank with proceeds from gambling.

Money from gaming—some $42 million—has also bought newly paved roads throughout the reservation, fences to keep cattle from roaming, a preschool and a high school, fire protection, running water in every home and connections to sewer outlets. The tribe now provides full health coverage for everyone and pays for any youngster wanting to go to college. And jobs are available to anyone who wants to work in the casino.

Most important, gambling has bought the tribe dignity. “It has given us more control over our lives,” says TeSam, seated in his office inside the new Viejas Tribal Center, also paid for with gaming proceeds.

In 1991, Viejas joined its cousins Barona and Sycuan in capitalizing on the 1988 Indian Gaming Regulatory Act, which allows gambling on reservations if that’s legal in the state. Since then, 130 tribes have opened casinos throughout the United States, bringing $8.2 billion a year to tribal coffers. While exact amounts of money are kept confidential by the three tribes in San Diego County, they estimate they’ve put between $200 and $300 million, cumulatively, back into the San Diego economy through jobs, construction and payments to vendors.

None of it came easily. Foremost was winning the support of the outside community through the Proposition 5 campaign supporting Indian gaming. Collectively, San Diego’s three tribes pumped $100 million into promoting Proposition 5, while casino interests from Las Vegas spent a mere $29 million—and lost. Viejas, under then–tribal chairman Anthony Pico, was perhaps most active in supplying local speakers in support of Indian gaming. San Diego County overall had one of the highest levels of Proposition 5 support in the state.

Charitable contributions were also part of the campaign and have remained an effective marketing tool for the tribes. Over the years, the casinos spent millions in donations to various charities, enhancing their image. While some critics contended those donations would abate in time, they haven’t. In March, for example, the Sycuan Tribal Community of 2,000 members and employees of the casino became a major sponsor of the 2001 San Diego MS Walk, which raises funds to fight multiple sclerosis.

Now, four more reservations in San Diego County are poised to herd the new buffalo—willing gamblers. Pala was scheduled to open its $100 million casino in March, 6 miles east of Interstate 15 off Highway 76 north of Escondido. The tribe’s hiring of a company called Anchor Gaming of Las Vegas to manage the 150,000-square-foot casino is one indication of how high the stakes have grown.

The nearby Pauma tribe has signed a gambling compact with the state, though it hasn’t announced its plans. But outside Valley Center, the San Pasqual band plans a $180 million Tuscan-style resort and casino overlooking Lake Wohlford, which begins construction later this year.

Then there’s the Rincon San Luiseño band of Mission Indians, already housed temporarily in a refurbished bingo hall, but with aspirations to become the biggest game in town with a $100 million hotel and casino built by Harrah’s of Las Vegas. The 200-room hotel, with swimming pool, restaurant and exercise facilities, is scheduled to open early next year.

The tribe tried opening a casino in 1989 but failed, then tried again six years later, only to be shut down after a challenge by the U.S. Attorney’s Office, which put a moratorium on new slot machines. A new gaming compact the tribes signed with California in 1999 changed that.

“Our history has been a pipe dream,” says John Currier, 39, chairman of the Rincon band. The tribe had tried growing fruit and running a thrift store, which brought meager income to its 600 members, half of whom live on the reservation off Valley Center Road. Money-making schemes were plentiful. Harvests, however, were slim—until now.

“For the first time, we have adequate cash flow,” Currier says. “We can plan instead of react with grants or financial aid. Now we’re stepping back to analyze tribal needs.”

Where once water systems broke down, tribal leaders are now negotiating with the county to sell water. “The [outsiders’] attitude before was: The tribe needs money; they’ll take what they can get,” says Currier. “But gaming is coming. We don’t need their deals. We can take time to make a decision, and people will respect us as a government. Sovereignty is the ability to be respected.”

The average annual income on the reservation is $12,000 a year. That will change with 420 full-time and 80 part-time positions soon to open up with an estimated payroll of $13 million. Another 125 new jobs are expected in construction.

However, with competition springing up all around, there’s little time to reap the whirlwind of change. Says Currier: “When the first casinos opened, the tribes back then were able to open up slower and grow over time. The problem now is the tribes have grown”—and so newer entrants in the casino business are immediately up against steeper competition.

What Harrah’s brings to the Rincon band’s equation is strong capital and management. “To be competitive now, you have to jump in at the big level or you’re not going to be a player,” explains Currier. “In the past, whether it’s been gaming or not, there’s been a lot of letdown. We’ve got to make it to the point where we can get a revenue stream coming into the tribe.”

About $1 million of that revenue will be used to match federal grants, another $200,000 for operating costs on the reservation and still another $350,000 for a Head Start center. Under the agreement with Harrah’s, as required by federal law, Rincon has five years to pay back the investment. Currier sees that happening in three years.

Above all, he says, “I don’t want to just say we did gaming, but that we did gaming well and for our members to feel proud about that. I want to see our youth learn that concept. I want to see the work ethic instill in them a strong sense of pride. I want tribal members to be touched, whether they live on or off the reservation.

“That’s personally my goal—to be able to say we’re going to deliver,” Currier says. “I can’t think of any other economic development that can do that.”

—Leonard Novarro
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