N.C. tribe's casino braces for 1st drop in profits
By The Associated Press Monday, November 03, 2008CHEROKEE, N.C. - Fewer customers are coming to Harrah’s Cherokee Casino in western North Carolina because of a sour economy and officials are bracing for a reduction in profit for the first time in its 10-year history.
There are 15 percent fewer customers at the casino, the Asheville Citizen-Times reported Monday. Officials said the twice-yearly checks sent to members of the Eastern Band of Cherokee Indians could be smaller than before.
Casino spokeswoman Joyce Dugan said the facility’s market is uncertain, but it is moving ahead with an expansion to be ready for a turnaround in the economy.
“It is this next quarter that is going to be telling,” Dugan said. “We just don’t know. No one knows from day to day what the market is going to be.”
The casino’s $633 million expansion is being boosted by plentiful labor and cheap money. About a month before the economy turned downward, the casino renegotiated its loan on the project to 4.42 percent.
“You can look at us as pure geniuses or just real lucky,” said Erik Sneed, who is in charge of the expansion project. “We like to think that we are geniuses.”
The project will include a third hotel tower, a spa and a doubling of the gambling area as well as 1,000 new jobs by 2012. Sneed said contractors are contacting the casino to seek work on the project and workers are being bused in from Asheville.
The casino is one of the state’s top tourist attractions with 3½ million visitors a year.
Dugan, a former tribal chief, said some members of the tribe have complained about the expansion when profits could be dropping.
But she said there are two accounts. Operating revenue is used to make payments to the tribe’s members. In 2007, each of the tribe’s 13,500 members received $9,318.
Expansion is financed from a credit line. The tribe has spent about $40 million so far on building.
“It is our plan that by the time the economy starts moving up we will be ready with a whole new facility to capitalize on that,” Sneed said.
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