New Mexico’s Tribal Casinos Betting Big on Full-Service Resorts

When Indian casino gambling started in New Mexico in the 1990s, at least one politician saw money spiraling into “a black hole,” a dead star with gravity so powerful that nothing escapes its pull.

Critics today claim that casino gambling is draining the economy of some New Mexico communities.

But the casinos are a lucky star for the tribes--and their magnetism could help the state.

Cash from gaming is helping tribes build housing, clinics, schools, roads. It’s also being used to create, or help sustain, non-gambling businesses, like fiber-optic networks, electronics manufacturing and retail, from hardware stores to supermarkets--even a flea market.

Today nine of the state’s 11 casino-operating tribes are taking gaming a step further: They’re trading up to full-scale resorts, with luxury hotels, some with golf courses and beauty spas, hoping to draw out-of-state tourists.

“It’s all providing jobs, construction jobs, facility jobs. It’s creating commerce,” said Frank Chaves, chairman of the New Mexico Indian Gaming Assn.

Numbers tell part of the story. Robert Robinson, an economist with the Center for Applied Research in Denver, projected earnings for tribal gaming statewide in 1995, anticipating 13,300 jobs and income of $215.5 million. By 1999, he said, income was $335.5 million.

Overall in 1999, Robinson said, 41,174 jobs were directly and indirectly attributed to Indian economic activity in New Mexico, including all 22 tribes. And personal income, due partly to gaming but mostly to spinoff businesses, was nearly $1.48 billion.

Tribal business is growing. The Santa Ana Pueblo north of Albuquerque, for example, collaborated with Hyatt to open an $80-million resort and spa in January. The 350-room hotel has three restaurants, and the spa offers herbal wraps, facials and massages in 14 treatment rooms. The 500-acre site offers stunning views of the Rio Grande, 10,400-foot Sandia Peak and the juniper-studded mesa to the west.

Despite its off-season opening, the resort is “doing very well,” said Mitch Ostrow, the director of marketing.

“We’ve had over 100 [corporate] bookings, of meetings,” he said. “We continue to grow that weekly. . . . It’s exceeding targets.”

The resort will mean more than 400 jobs, tribal administrator Roy Montoya said. Tribal members get preference for those jobs.

Other tribes also are expanding. On March 2, Isleta Pueblo south of Albuquerque opened a new $50-million casino with 1,750 slot machines--the most at any New Mexico casino--and a new theater.

“I will put this up against anything in Las Vegas,” casino general manager Gordon Dickie said.

But Dickie thinks this is just the beginning. Discussions are underway for a hotel and more.

“You need to house your guests to create the two-, three-, four-day stay,” he said. “You need to have a health spa, a beauty parlor. You need to have a coffee shop accessible at all times. You need to have a tiered room [rate] structure.”

Sandia Pueblo, planning to open an $80-million casino May 25, also plans a hotel, golf course and convention center bordering Albuquerque that would bring the total price tag to $250 million, tribal Gov. Stuart Paisano said.

Its architecture is pure Southwest, full of pueblo-style beams, adobe and dry-stacked sandstone.

“This is truly Sandia,” project manager Robert X. Martinez said during a preview tour. “This is not just another Indian gaming facility; this is Sandia.”

The casino is less than two miles from the annual Albuquerque international balloon fiesta launch field.

San Juan, Pojoaque and Tesuque pueblos north of Santa Fe and the Mescalero Apache Tribe in southern New Mexico also have casino hotels.

“I think you can’t have a casino without a resort in today’s competitive environment,” said Jason Ader, Wall Street gaming analyst with Bear Stearns.

Santa Clara Pueblo north of Santa Fe is about to get its feet wet with a new casino, bowling alley and restaurant complex this spring.

Tesuque named its casino and hotel Camel Rock after the distinctive camel-like rock formation in the area. The pueblo, population 425, will use about $4 million worth of casino earnings to renovate its historic plaza, a sacred place where it holds ceremonial dances. Another $6 million worth of gaming proceeds will build a combination Head Start center and elementary school, tribal Gov. Charlie Dorame said.

Casino jobs have motivated pueblo members to stay in school and continue on to college, Dorame said. And now tribal scholarships are available, he said.

“I’m really excited about these kids having that opportunity. I didn’t have it when I was growing up,” he said.

Unemployment at Tesuque is down to about 2%, Dorame said, compared with the 25% he remembers in the 1960s.

Dickie sees a strong tourism draw in the pueblo resort phenomenon.

“I think because of the climate and the beauty of the Southwest, number one. That grabs you first,” he said. “The history is also major. There’s a lot of history with the pueblos here. But I think right off the bat, beauty.”

State Sen. Joseph Carraro, the Albuquerque Republican who sounded the “black hole” warning in the 1990s, now says he is reassured somewhat by tribal diversification but remains wary.

“I think we can see now that Indian gaming, some of the Indian gaming tribes, have used the money to benefit their communities as well as the state,” Carraro said. “There are a lot of positive things they’ve done.”

But most of the tribes’ gambling windfall, so far, has come from in-state communities that lose revenue, he said. If resorts sprout and visitors come from around the country, that could outweigh the local money spent at casinos, he said.

“I had some real serious doubts,” he said. “Now I see the potential for benefits.”

Some see no gaming potential.

“Gambling is not economic development,” said Guy Clark of the New Mexico Coalition Against Gambling. “It does not add to the economy. It drains the economy.”

Albuquerque Mayor Jim Baca said his city loses tens of millions of dollars in tax revenue from gamblers’ losses. Baca recognizes gaming is reality; people like to play. But he’d like the state to find ways of assuring financial fairness for cities while it protects tribes.

“I don’t think it is all bad. I think the casinos are incredibly bad, but these resorts will bring people into New Mexico,” Baca said.

The debate arises as tribes seek to renegotiate their 1997 gambling compacts with the state. They want to cut their state revenue share in half--from 16% of slot machine proceeds, which they deem illegally high, to 8%. And they want an 18-year compact instead of nine.

The Indian Gaming Assn. has taken out two television commercials talking about the thousands of people employed by the casinos, and Santa Ana has a TV spot of its own.

“We are building roads. We are building bridges. We are building clinics,” the Santa Ana ad says. “But most of all, we’re building opportunities and creating jobs for ourselves and for New Mexico. We are a people with a proud heritage and a promising future--we are Santa Ana.”

Janet Jessup, head of the New Mexico Gaming Control Board, said slot revenue--gamblers’ losses minus slot payoffs--totaled an estimated $396.2 million in 2000. That’s up from $254.5 million in 1997.

As much as 95% of casino revenues are from slots, because that’s where the vast majority of casino-goers play, said Jason Woodside, director of marketing for the Isleta gaming operation.

“Slot revenue is very good here compared to Vegas--in some cases, even better,” said Dickie, Isleta general manager. “I know the win per unit, and I know in some cases Las Vegas would kill to have these numbers.”