In North Carolina, the Eastern Band of Cherokee Indians’ tribal council voted 8-2 for a resolution allowing EBCI Holdings Inc., the tribe’s gaming arm, to bid on building two new casinos. Named Project Thoroughbred, it comes with a price tag of $25 million which would give EBCI Holdings a 44 percent stake in “expanded commercial gaming interests.”
EBCI Holdings Chief Executive Officer Scott Barber submitted the proposal during a special session called by Principal Chief Richard G. Sneed on April 13. Barber said the two properties would be outside EBCI’s sovereign territory but within North Carolina. No other information was provided.
ECBI Secretary of Finance and EBCI board member Cory Blankenship said, “It allows us to go into a new state with a gaming property under a partnership agreement so the tribe’s not on the hook 100 percent. We will actually have a 44 percent equity stake. And, we’ll have the opportunity, if we’re the winning bidder, to develop two gaming properties in a new jurisdiction.”
Blankenship added, “The total project cost is $90 million. In our position, what we’re asking for is a $25 million equity commitment from the tribe that will come from the tribe’s reserve accounts. There’s a $2.5 million commitment upfront that will be paid from an EBCI Holdings account. To get into an actual casino deal, to build two casino facilities right out of the ground, $25 million is a relatively low bar for getting into that position.”
Rep. Bill Taylor questioned the short turn-around time for the project and the need for the special session. He said, “This is my 10th year in council, and I’ve seen how it works. If you want something done real quick, then it is ‘time sensitive.’ How long have you known about this project? How long have you been working on this?”
Blankenship responded EBCI Holdings had been working on the project for 10 days prior to the special session. He stated, “I think it’s a good opportunity. When we look at casino deals, when we look at the commercial gaming market, this price tag seems like a high dollar amount but $90 million is a relatively low cost of entry. Rather than that, we’re talking about a $44 million equity deal and $25 million investment from the tribe
He noted the Eastern Band is not the only tribe interested in this particular opportunity. “But it appears that we are in the lead because of the reputation of the Eastern Band and because of the reputation of EBCI Holdings and because we have a 30-year track record of being responsible in this industry. I think that we’ve got a really good shot at this, and it is time sensitive,” Blankenship said.
In support of the resolution, Vice Chief Alan B. Ensley said, “We know what we’re facing now as far as the competition goes. We’ve got to act. We know we’re on very thin ice. We could be in major trouble if we’re not proactive.”
Rep. T.W. Saunooke also voiced support for timely action. He said, “These opportunities, when they come up, we need to be ready to act. We’re not always going to have months and months to discuss and put it out there and deliberate and talk and go back and forth. The speed of business outside the reservation is quick.”
One of the major questions discussed involved how revenue from this project would impact per capita distributions for tribal members. Sneed stated, “Every time an opportunity comes up, almost without fail the first question that comes up is, ‘Is it going to per cap?’ On this particular project, that is certainly a possibility but it falls with the council to make that determination when it comes to the distribution.”
Sneed added, “In my opinion, there needs to be a shift in our mindset. We enjoy the benefits that we enjoy today because a quarter of a century ago there was some courageous council members and a chief who voted, ratified and passed gaming in the face of opposition, because they had a vision of where this tribe could be. We have a responsibility now to pay that forward and to plan seven generations forward. Yes, this can go to per capita, but my plea to the people is to have the same vision for future generations of Cherokees who will come after, that they may enjoy the same benefits that we enjoy now, and not that every time a project comes up the only determining factor is whether or not an individual citizen will support it is if they are going to get something right now.”
The Eastern Band of Cherokee Indians owns two Harrah’s casinos in North Carolina. Last August, EBCI Holdings purchased Caesars Southern Indiana.
