Cherokee gaming LLC to expand its reach
The company the Eastern Band of Cherokee Indians formed earlier this year to purchase Caesar’s Southern Indiana Casino hopes to branch out its business interests, receiving approval from Tribal Council Dec. 9 to invest up to $12 million in gaming-related technologies and pursue construction of a sports betting bar on the tribe’s Exit 407 property in Sevier County.
“We’ve looked at over 20 companies, six of which we really like,” said Scott Barber, CEO of EBCI Holdings, Inc., of the $12 million investment. “They’re in various stages of Series A and B. Those are investment windows that are open for short periods of time.”
The $12 million investment would bolster the company’s mandate to develop commercial gaming ventures for the tribe and is also expected to yield a high rate of return, Barber said. The funds will come from the tribe’s existing investment accounts, which yield an annual return of about 10%. Barber expects that most of the anticipated investments will yield a return of three to five times the original amount once the company exits the investment.
“We’re striving for a much higher return on investment,” he said.
Most Tribal Council members supported the request, though some said they needed time to learn more before committing.
“It’s easy to prey upon people who don’t have the information and take advantage of them and that’s what I feel like,” said Big Cove Representative Teresa McCoy. “I’m not going to do it.”
The requested $10 to $12 million is a lot of money, she said, and she doesn’t feel comfortable allocating that amount to off-Boundary business efforts when there’s great need at home.
“This is $10 to $12 million, and I am not comfortable with it because I know that tonight in my community there’s going to be homeless people,” she said. “There’s going to be hungry people.”
Yellowhill Representative T.W. Saunooke disagreed, saying he sees the resolution as an opportunity to reallocate current investments to bring back a higher rate of return.
“I have an educated decision that I’m able to make based off the information that’s been given to me,” he said. “The other comments about me not knowing, I kind of take a little offense to that.”
Snowbird/Cherokee County Representative Adam Wachacha said that pursuing investments like the one proposed is crucial in light of the Catawba Indian Nation’s planned casino in Kings Mountain.
“Just imagine the people that bought into Amazon,” he said. “There wasn’t any e-commerce at the time that was really going on, and those people that bought into Amazon as its early investors, they’re billionaires now because of that one idea. They believed in that idea. And I believe in the idea that this group has in trying to diversify our revenue so that we can sustain.”
Impact to the status quo of casino profits isn’t merely a threat, said Vice Chairman Albert Rose.
“It’s going to happen,” he said. “Especially what’s going on with Catawba.”
That means that the EBCI has to be aggressive with its business ventures, he said.
The resolution passed with a weighted vote of 62-38, with Chairman Richard French, McCoy, and Wolfetown Representatives Bill Taylor and Bo Crowe voting to table it and the remaining members opting to pass it.
Council then considered a second ask from EBCI Holdings, this one a request for permission to venture into a new business category — opening an “experiential and interactive sports bar” on the Exit 407 property under development by the tribally owned Kituwah LLC. The bar will offer sports betting , said Barber, which is legal in Tennessee.
“Without getting into too much business strategy, we are going to create an experiential and interactive form of gaming that doesn’t exist,” he said.
As originally submitted, the resolution included a request for $40,000 from the tribe to cover a marketing and feasibility study, but floor amendments removed the funding request, as Barber said EBCI Holdings had the money to cover those costs itself. Instead, the company was just asking for Tribal Council’s blessing to pursue the opportunity, because its bylaws require the body to approve any new business ventures.
If successful, EBCI Holdings could duplicate the sports bar concept for other markets, said Secretary of Finance Cory Blankenship, who is also on the EBCI Holdings board.
“The idea would be to develop a product that we can deploy in other markets,” he said. “Hopefully the feasibility comes back that we have the first on tribal land, but it’s not restricted to tribal land. We could take this product to other markets.”
The proposal met with widespread approval from Council, with only two members — Taylor and Crowe — opposed. The resolutions require a signature from Principal Chief Richard Sneed to become effective.