Ten years later, tribe’s casino venture paying off

Nicholas K. Geranios

Tuesday, Dec. 16, 2003 | 9:22 a.m.

WORLEY, Idaho -- At a remote crossroads east of Spokane, Wash., the Coeur d'Alene Tribe of Indians has taken control of its economic destiny.

The tribe's decade-old casino is thriving and growing. It has virtually eliminated unemployment on the reservation and provides an annual payment to each of the 1,900 tribal members.

With a new 18-hole golf course and an expanded hotel and casino under construction, the complex near the intersection of U.S. 95 and Idaho Highway 58 has become the destination resort the tribe envisioned when it first opened a small bingo hall in 1993.

"It helps when you live in one of the most beautiful places in the world," said David Matheson, chief executive of the tribe's gaming operations.

Indeed, while many Indian tribes were shunted to remote, hardscrabble reservations after signing treaties, the Coeur d'Alenes got 345,000 acres in the forested mountains and lush valleys of northern Idaho. They also own the lower one-third of scenic Lake Coeur d'Alene and are close to the cities of Coeur d'Alene, Idaho, and Spokane.

About two-thirds of the casino's customers are from just across the border in Washington state. Tour buses also come down from Canada each week.

The tribe does not release financial information about the casino complex, which has about 800 employees.

However, the tribe is required to give 5 percent of its casino profits to local schools each year. Based on past awards, the casino generates about $15 million to $20 million in annual profit, The Spokesman-Review newspaper recently calculated.

The bulk of the tribe's gambling profits go to government, education and social programs, Matheson said. Some of the money is used to buy land to expand the reservation.

Each tribal member gets $2,400 a year from casino profit, with half coming in time for Christmas shopping and half in time for back-to-school purchases, Matheson said.

Unemployment, once more than 70 percent among tribal members, is basically zero, tribal officials said.

The federal government has approved 250 casino gambling compacts for tribes in 25 states, and there are another 30 to 50 tribes currently negotiating compacts, according to the National Indian Gaming Association.

But casinos remain a constant source of tension between Indian tribes and opponents who either seek a piece of the action or worry about the social costs of gambling addiction. Many state governments also spar with tribes over the size and taxation of gambling operations.

Whether tribal casinos create more social problems than they solve remains a political dispute. A national study by Harvard University on the economic impacts of tribal casinos is only now getting started.

But tribes with casinos contend they have created 300,000 jobs around the country and finally started to create viable economies in Indian country.

A 2002 study by two University of Idaho researchers found Idaho's five Indian casinos provided 2,196 jobs and $138 million in sales.

Providing jobs for members was the main reason the Coeur d'Alene Tribe opened a small bingo parlor 10 years ago about 20 miles south of the resort city of Coeur d'Alene, casino spokesman Bob Bostwick recalled.

It was an immediate success, and the tribe in 2000 added a 96-room hotel and meeting rooms, a restaurant and expanded the casino to 1,400 video gambling machines. In August the 18-hole Circling Raven Golf Club opened next to the casino.

"The goal here was to become a true destination resort," Bostwick said. "The golf course completes that."

But it still wasn't enough. A $15 million expansion currently under way will add more than 100 new hotel rooms by Christmas. A tepee-domed casino is also being built to hold 400 more gambling machines.

The casino has long offered live boxing, concerts and other entertainment in its ballroom. Next year the tribe hopes to begin construction on a 5,000-seat indoor arena to double the crowds it draws for such entertainment.

Matheson, 52, was born on the reservation and has an MBA from the University of Washington. He was a former chairman of the tribe before spending several years working in Washington, D.C., for the Department of the Interior.

He came back home to launch the casino, which he hoped would eliminate chronic poverty among his people.

"Tribes develop at their own pace. The time is right for us right now," Matheson said.

About 60 percent of casino employees are tribal members.

While many tribes opened casinos in partnership with giant gaming companies such as Harrah's, the Coeur d'Alenes built their casino themselves and operate without an outside investor.

With no pressure to produce a big profit, Matheson said the casino has no minimum-wage jobs. The average pay is more than $8 per hour, excluding tips, and the jobs include medical and dental coverage, plus a retirement plan.

Workers get free meals in the cafeteria, and the casino also provides onsite day care for employees' children.

While tribal gambling has many critics, Matheson said there hasn't been much of a downside for the Coeur d'Alenes.

"Being human, we won't live in a perfect utopia," Matheson said. "Problems will develop and we will adapt."

While in Washington, D.C., Matheson saw what happened when some tribes began distributing huge amounts of gambling revenues to members, killing the incentive to go to school or hold jobs. He was determined the Coeur d'Alenes would avoid that trap.

"Tribes that divide all their money are hurting their people," Matheson said. "They are crippling their young people."

When Bostwick was hired by the tribe as press secretary 12 years ago, the tribe had 75 to 100 total employees, and unemployment was more than 70 percent on the reservation.

Now "the tribe has a job for every tribal member who wants one," Bostwick said.

The benefits of gambling extend beyond its members, employing hundreds of non-Indians in the area, such as himself, Bostwick said. The tribe is the second biggest employer in Kootenai County.

"The Coeur d'Alene Tribe is a major success story in Indian country," Bostwick said. "We have created more jobs in this region than anyone in the past decade."