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Cherokee casino braces for first drop in profit in 10-year history
Market is uncertain, but officials decide to begin expansion
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Published: November 5, 2008
CHEROKEE
Because of the sour economy not as many people are going to Harrah's Cherokee Casino in Western North Carolina, and officials are bracing for a reduction in profit for the first time in its 10-year history.
The number of customers has dropped by 15 percent, and officials said that the twice-yearly checks sent to members of the Eastern Band of Cherokee Indians could be smaller than before.
A spokeswoman for the casino, Joyce Dugan, said that the casino'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 helped 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 that contractors are contacting the casino to pursue work and workers are being bused in from Asheville.
Dugan, a former tribal chief, said that some members of the tribe have complained about the expansion when profits could be dropping.
But she said that 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.
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