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Casino success hinges on location, location, location

Editor's Note: This is part two of a three-part Winds of Change series on the economic impact of casinos in the Northland. Reporters from several Murphy McGinnis newspapers contributed to this story.

Editor's Note: This is part two of a three-part Winds of Change series on the economic impact of casinos in the Northland. Reporters from several Murphy McGinnis newspapers contributed to this story.
"I think you have to be ignorant or stealing to lose money in this business," said Fond du Lac Tribal Chairman Robert "Sonny" Peacock. "You should be able to make a profit, and you should be able to pay all your bills with that profit. The only thing that could do you harm is that no one comes through the door."
Peacock was commenting on the success of Fond du Lac's gaming operation, which brings in over $25 million a year. The reservation, located near Cloquet, has an annual payroll of some $20 million and is Carlton County's largest employer.
Fond du Lac is one of the success stories tied to Indian casino gambling, which has grown to a major industry in the Northland during the past decade. Not all Northland reservations have had the same luck as Fond du Lac, but even the small casinos have made a significant impact.
Statewide, the Minnesota Workforce Center lists casino jobs as some of the fastest growing occupations for 2001.
Fond du Lac's Black Bear Casino and Hotel complex, near Cloquet just off I-35, dominates the landscape. The facility is adding a golf course and planning an expansion. Its Fond-du-Luth Casino in downtown Duluth is marking its 15th anniversary.
Since 1990, Fond du Lac has spent more than $58 million on 26 development projects. In addition, the reservation has been able to set aside $100 million to be kept in trust for future needs.
Peacock also pointed out that of the 25 percent of the tribes in the United States with gaming operations, only a few are "wildly successful," mainly because of location.
And that's a problem for a reservation across the Wisconsin border, that has found its casino's location a challenge. Small by Minnesota-Wisconsin standards, Isle Vista Casino near Bayfield is operated by the Red Cliff Tribe. It has a payroll of about $1 million a year and has been going through some rough times.
Playing under different rules
Wisconsin casinos play by different state rules than their Minnesota counterparts. As a result, the Badger State taps into more casino revenue and is officially against expanding the industry.
Under current agreements, Red Cliff pays the state $64,685 annually in casino revenue sharing, the smallest amount paid by any Wisconsin tribe. In contrast, the Lac Courte Oreilles Band, with two casinos in Hayward, pays the state $420,000 a year, and tribes with even bigger casino operations are paying in the millions.
Tribal board member Margaret Diamond said the LCO casino made $22 million last year.
Tribes in both states also pay some reimbursements for services to local governments.
"There are three secrets to casino success," said Red Cliff tribal attorney Dave Ujke. "Location, location and location."
"You literally have to drive past a casino on any highway in order to get here," said Ujke. "We are pinched ... We are not tied to any big market."
As a result, Red Cliff has looked to an off-reservation casino project with two other tribes at a dog racing track in Hudson, Wis. The project could net the tribe an additional $5 million a year and create an estimated 150 new jobs. However, the idea has been strongly opposed by Wisconsin Gov. Scott McCallum and is now headed to federal court.
So, unlike Fond du Lac, Red Cliff finds itself with unmet reservation development needs, well beyond the means of the casino. But like Fond du Lac casinos, Isle Vista is still a major local employer and economic engine.
Ujke said that if it wasn't for the casino, there would be no real business opportunities in Red Cliff for people to put food on the table and money in their pockets.
He characterized the casino as the tribe's "most important social welfare program."
Location is also a factor for the remote Grand Portage Lodge and Casino operated by the Grand Portage Band. The North Shore casino depends on Canadian visitors for about 80 percent of its business.
And it must compete with the a new charity casino in Thunder Bay, Ontario, and could be affected by new security measures which could slow and discourage border traffic.
Casinos mean more jobs, more people and more opportunities for the reservations. They also play a role in Northland tourism. Part 3 of the Winds of Change series on Indian casinos will examine these trends.
Pat Faherty is a reporter for Murphy McGinnis Newspapers. He may be reached by telephone at 723-1207 or by e-mail at pat.faherty@duluth.com .

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