12
S moke S ignals
MAY 1, 2018
Preparing for com
COMPETITION continued
from front page
During a February 2008 General
Council meeting, Tribal lobbyist
Justin Martin estimated that the
Grand Ronde Tribe’s gaming div-
idend would be slashed by 47.7
percent when the Cowlitz opened a
casino closer to the Portland-Van-
couver metropolitan area.
Martin also was quoted often in
mainstream newspapers as saying
that the Grand Ronde Tribe stood
to lose more than $100 million an-
nually in revenue once Cowlitz’s
casino opened.
Not knowing what to expect, the
Tribe drastically reduced its esti-
mate of gaming dividend expected
from Spirit Mountain Casino by
38.8 percent from 2016 to 2017.
Tribal managers cut 5 percent from
their budget requests during the
2017 budgeting process and funds
from Tribal investments were used
to balance the budget.
And everyone held their breath
awaiting the opening of Ilani.
However, after a year of operat-
ing with casino competition closer
to the Portland-Vancouver core, the
dire predictions have proven to not
be as devastating as feared for the
Grand Ronde Tribe.
In adopting the 2018 budget, Trib-
al Council increased the projected
dividend from Spirit Mountain Ca-
sino by 36.8 percent, offsetting the
drastic reduction expected the pre-
vious year. The difference between
the expected gaming dividend in
2016 compared to that projected in
2018 is now only 18.8 percent.
In August 2017, then-Tribal
Council Chairman Reyn Leno, who
also sits on the Spirit Mountain
Gaming Inc. Board of Directors,
announced that casino revenues
were remaining competitive with
those earned in 2016, which was a
record revenue year. He added that
compared to the casino’s five-year
average, revenues were only down
8 percent.
Another indication that the ef-
fects of competition have not been
as grave is reflected in Spirit Moun-
tain Community Fund’s grant giv-
ing. The Tribe’s philanthropic arm
receives 6 percent of Spirit Moun-
tain Casino proceeds to distribute
to nonprofits in 11 northwest Ore-
gon counties.
In the four quarterly check distri-
butions conducted by the Commu-
nity Fund before the Cowlitz casino
opened, the fund distributed $3.15
million. In the four quarterly check
distributions following the opening
of Ilani, the fund gave $2.9 million
for a decrease of $254,924, which is
an 8 percent decline in grant money
awarded.
Preparation paid off
The Grand Ronde Tribe started
preparing for Portland-Vancouver
market competition several years
ago.
Smoke Signals file photos
These informational signs were on display at Spirit Mountain Casino one year ago when Ilani opened. They point
out the differences between Spirit Mountain Casino and gaming in Oregon vs. gaming in Washington state’s 28
Tribal casinos.
As early as 2011, the Tribe do-
nated $4 million to the Oregon
Department of Transportation to
help build the Newberg-Dundee By-
pass, which is designed to make the
drive from Portland to areas west
of McMinnville safer and quicker.
Spirit Mountain Casino dis-
patched employees back east to
conduct research on how Cowlitz
casino investors, the Mohegan
Tribe of Connecticut, operate casi-
nos and attract customers. Ilani’s
general manager helped run the
Mohegan property in Wilkes-Barre,
Pa.
In 2015, Tribal Council approved
a $13 million remodel of Spir-
it Mountain Casino, which was
completed in February 2017, and
improvements to Spirit Mountain
Lodge are currently being designed
to offer more high-end suites to
high-roller guests seeking luxuri-
ous weekend stays in Grand Ronde.
“The casinos I’ve seen that are
facing new competition that don’t
re-invest don’t do well,” Spirit
Mountain Casino General Manager
Stan Dillon says. “So the fact that
we did re-invest into the property
and we enhanced it. … We really
did need that renovation badly.”
The last thing Spirit Mountain
Casino needed, Dillon says, was
for customers to visit a brand new
casino and then visit a 20-year-
old, unrenovated casino and start
making unfavorable comparisons.
In early 2017, Spirit Mountain
Casino also started accentuating
the differences in gaming that occur
when you cross the Columbia River.
Washington state does not allow
Las Vegas-style gambling that can
be had in Oregon. The sign explain-
ing those differences still stands
inside Spirit Mountain Casino and
is read by guests daily, Dillon says.
“Competition is good,” says Leno,
who also is a longtime member of
the Spirit Mountain Gaming Inc.
Board of Directors. “I think it helps
us sharpen our pencil and I think it
helps us work harder to do what our
customers want us to do as opposed
to just thinking we are the only
game in town. I think, basically,
we’ve done that.
“To only have a single-digit im-
pacts as opposed to the 40 percent
that was mentioned in the begin-
ning, which I never did believe
would ever happen, means that our
people at the casino worked hard
and I think council at that time
worked hard to prepare and now
we’re in a really good position to
deal with that competition.”
“I think today the effect is pretty
much minimal when you think
of a major player in the industry
opening a mega-resort in your
market, you’d expect to be devas-
tated,” Dillon says, acknowledging
the dire double-digit revenue drop
predictions that were discussed
before Ilani opened. “We are in the
single digits.”
Dillon said Spirit Mountain Ca-
sino saw the greatest effect in the
first five months after Ilani opened
with double-digit decreases in reve-
nue and customer counts, but then
business normalized as the novelty
of a new casino dissipated. In addi-
tion, Spirit Mountain Casino only
lost 13 employees – mostly table
dealers – to Ilani when it opened.
Spirit Mountain Casino has seen
its number of employees decrease
to a current total of approximately
1,050. Leno attributes the employ-
ment decline to pencil sharpening,
as well as the cost-saving effects of
better technology.
Dillon says that when he took
over as general manager in 2014,
staff levels were bloated and he
has allowed staffing numbers to de-
crease to where the casino is operat-
ing efficiently. However, he admits,
with the current unemployment
rate in Oregon hovering at about
4 percent, finding new employees
to fill about 100 vacant positons is
increasingly difficult.
“We’ve reduced employment, but
we’ve also become more efficient,”
Leno says. “There are a lot of ma-
chines taking the place of people.
We don’t need as many people in
the cash cage because we have ma-
chines that do it (ticket redemption)
on the floor. You don’t hardly go to
the cashiers anymore.”
The Cowlitz Indian Tribe’s casino, Ilani, overlook