Southeast considered last untapped U.S. tribal market

Kathy Hanrahan

Tuesday, May 10, 2005 | 9:39 a.m.

BILOXI, Miss. -- The Southeast, rich in Indian tribal lands, should be a prime target for expansion of the multibillion-dollar American Indian gambling business, but few new casinos are being pursued, industry officials say.

"It probably is the last area that can get Indian gaming back into double-figure growth," said Jason Giles, legal counsel with the National Indian Gaming Association.

Giles, whose comments came during the recent Southern Gaming Summit on the Mississippi Gulf Coast, said that for the first time in more than a decade tribal gambling did not increase by double digits in 2003-2004.

The Southeast has 13 Class III casinos operated by Indian tribes, spread among Mississippi, Louisiana, Florida and North Carolina, according to the NIGA. Class III operations, which have Las Vegas-style table games and slot machines, require tribal and state compacts to be agreed upon, according to the National Indian Gaming Commission.

Alabama contains Class II operations, with games like bingo that pit competitors against each other and not the house. Tennessee, South Carolina, Georgia and Arkansas do not have federally recognized tribes operating gambling organizations, according to NIGC.

The Indian Gambling Regulatory Act confines tribal gambling mostly to reservations, and generally prohibits gambling on land acquired after the law's passage in 1988. Tribes also must sign a pact with a state's governor.

With a lack of full-scale Indian casinos in the area, operations such as Harrah's Cherokee Casino in North Carolina has benefited, reporting more than 3.3 million visitors a year in 2004.

Being nestled in the Bible Belt has not hurt the casino, said Joyce Dugan, director of external affairs and communications for Harrah's Cherokee Casino and Hotel.

Dugan said the casino, opened in 1997, was one of the only casinos to ever close one night because they ran out of money. Since then, consumer demand has remained strong for the casino despite not allowing alcohol, having no large entertainment area and for two years not operating a hotel onsite, she said.

In a study by Harrah's in 2003 of casino participation rates across the country, eight of the top 20 most popular markets in the country for tourists have casinos, Dugan said. Of those eight, Houston is the only city west of the Mississippi River.

Cherokee Casino is the third-highest revenue grossing casino in the Harrah's organization, behind properties in Atlantic City and Las Vegas.

Currently the Cherokee Casino is attracting tourists within a 250-mile radius, but Dugan said the casino is losing gamblers to the Mississippi Gulf Coast, Tunica and Las Vegas.

The Mississippi Band of Choctaws Indians is holding its own against the Gulf Coast gambling market.

"Long before gaming, the tribe was in such poor condition we had to do something or leave the state," said Phillip Martin, the tribe's chief.

Since establishing its first manufacturing industry, Chahta Enterprises, in 1979, the Choctaws have opened the Silver Star Resort and Casino and Golden Moon Hotel and Casino at Pearl River Resort near Philadelphia.