With a new tribal casino coming to South Bend, warning signs have gone up about how it would impact the existing gaming industry. One legislator wants to expand casinos to Terre Haute, however.
The Gaming Association of Indiana recently released a report, conducted by Spectrum Gaming Group, predicting the state’s 13 existing casinos could lose $800 million in revenue in the first five years of operations at the Pokagon Band of Potawatomi Indians’ Four Winds South Bend, set to open in 2018. The state could lose $354 million in tax revenue in the same period. Matt Bell, head of the association, said, “The introduction of tribal gaming in South Bend will be the single most disruptive occurrence to the casino gaming industry since properties opened their doors 20 years ago.”
The timing could not be worse, analysts said, since revenue at Indiana casinos has declined by 30 percent since a peak of $900 million in 2009, due to completion from Ohio, Illinois and Michigan casinos. Indiana casinos pay taxes of 30 cents on every dollar gambled, whereas tribal casinos are not required to pay state taxes. However, the Pokagon Band has agreed to a revenue sharing plan that guarantees 2 percent of casino profits, or at least $2 million per year, to South Bend. The tribe also has pledged $5 million over five years to area nonprofits.
In addition, it may negotiate a revenue sharing plan with the state in exchange for future expansion. In Michigan, where the tribe operates three Four Winds casinos, it pays about five cents on every dollar played on slots. As a result, state and local governments have received about $200 million over the last decade.
Ed Feigenbaum, publisher of Indiana Gaming Insight, said the tribal casino will be “a real game-changer. They’ve got all kinds of way to bring people to the property that aren’t available to the commercial casinos. And, on top of that, they run a great operation. They know how to do this and they know how to do it right.”
The Pokagon Band is planning a casino and 500-room hotel on its 166-acre site. By offering meals, cigarettes, gasoline and hotel rooms tax-free, they’ll gain a huge marketing advantage that will allow them to offer gamblers bigger payouts, Feigenbaum pointed out.
Indiana lawmakers have resisted regulatory and tax breaks for commercial casinos. Laws established 20 years ago have limited casinos to cities on rivers, located them in economically distressed areas and burdened them with higher taxes compared to casinos in other states. “The world has changed around us since then. We need a vision for the future,” Bell said.
Construction has begun on the new Pokagon new casino in South Bend. The first phase of the 175,000 square foot Four Winds South Bend will feature 1,800 Class II gaming devices, four restaurants including Copper Rock Steakhouse and the Buffet, player’s lounge, coffee shop, three bars, retail outlet and an enclosed parking structure for 4,500 vehicles. The casino is scheduled to be completed in early of 2018 and will create 1,200 permanent and 700 construction jobs.
Tribal Chairman John P. Warren said, “Once operating, the casino will generate revenue to fund services and programs that will create additional economic opportunities for Pokagon citizens, the city of South Bend and also fund community projects, local organizations and schools.”
National Indian Gaming Association Chairman Ernie Stevens Jr. stated, “I would like to congratulate the Pokagon Band on its historic 166-acre Tribal Homeland Restoration. This 22-year journey has been a long one for Pokagon citizens. We are happy to see the United States fulfilling its promises from treaties made long ago. It is only fair and just for the sacrifices our elders made on our behalf.”
Four Winds Casinos Chief Operating Officer Frank Freedman noted Four Winds South Bend will offer “the same high-level of service and amenities that our guests have come to expect” at Four Winds Buffalo in Michigan. Since that property opened nine years ago, Freedman said, “It has since received more than 300 local and national awards. We look forward to providing more details on the property as well as information about job fairs and vendor fairs as we progress through construction.”
The architect for Four Winds South Bend is HBG Design of Memphis, Tennessee. The 5,000-member Pokagon Band also operates three Michigan casinos: Four Winds Casino Resort in New Buffalo, Four Winds Hartford and Four Winds Dowagiac.
