RSS 2.0 Feed
Vol. 7 No. 12, December 2008, Dateline
Loan Pays Off for Washington Tribe
By today’s financial standards, last month’s opening of Snoqualmie Casino a half-hour’s drive from Seattle was nearly a miracle. Two years ago, lenders were coming out of the woodwork for a chance to finance the $375 million project, which includes a 1,700-slot gaming floor and five restaurants overlooking the Cascade Mountains near Interstate 90.
The Snoqualmie Tribe had to track down the money after its partnership with MGU Companies of Phoenix collapsed in 2006. “Holding the bag,” the tribe turned to Wall Street, finding $330 million from Bear Stearns as what the Seattle Times terms “the biggest startup financing in the country for a tribe building a casino.”
“It was surreal,” Tribal Administrator Matt Mattson says. “We had no collateral, no revenue. It was based on an idea. We had people wanting to invest from all over, all the biggest firms, Hancock, Fidelity, you name it.”
Such interest would be unlikely in the current economy. In fact, present conditions pose Snoqualmie a dilemma in finally opening its first casino after years of effort: planning to fund competitive expansions—and tribal benefits from casino funds—while paying down debt in an area where other tribal casinos are starting to report declining revenue growth for the first time.
“It’s taking a large gamble,” Mattson says. “We could have put up a tent, with no debt. We decided to up the game. We hope the reward is that much greater. Greater risk, greater reward.”
W. Ron Allen, chairman of the Washington Indian Gaming Association, sees a sound future for Snoqualmie, the only casino in an area marked by some of Washington’s wealthiest zip codes.
“Their market is so strong over there on the east side of Puget Sound, it is not going to be a problem for them,” Allen says. “They are going to succeed almost despite themselves.”
The Snoqualmie Tribe had to track down the money after its partnership with MGU Companies of Phoenix collapsed in 2006. “Holding the bag,” the tribe turned to Wall Street, finding $330 million from Bear Stearns as what the Seattle Times terms “the biggest startup financing in the country for a tribe building a casino.”
“It was surreal,” Tribal Administrator Matt Mattson says. “We had no collateral, no revenue. It was based on an idea. We had people wanting to invest from all over, all the biggest firms, Hancock, Fidelity, you name it.”
Such interest would be unlikely in the current economy. In fact, present conditions pose Snoqualmie a dilemma in finally opening its first casino after years of effort: planning to fund competitive expansions—and tribal benefits from casino funds—while paying down debt in an area where other tribal casinos are starting to report declining revenue growth for the first time.
“It’s taking a large gamble,” Mattson says. “We could have put up a tent, with no debt. We decided to up the game. We hope the reward is that much greater. Greater risk, greater reward.”
W. Ron Allen, chairman of the Washington Indian Gaming Association, sees a sound future for Snoqualmie, the only casino in an area marked by some of Washington’s wealthiest zip codes.
“Their market is so strong over there on the east side of Puget Sound, it is not going to be a problem for them,” Allen says. “They are going to succeed almost despite themselves.”
Staff writers for Global Gaming Business magazine. Las Vegas, Nevada.
Please login to post your comments.