The owner of Ilani Casino Resort in Ridgefield, Washington, the Cowlitz Indian Tribe, is considering cutting ties with its casino management partner, the business arm of the Mohegan Tribe, Mohegan Gaming & Entertainment.
Sizeable Management Fee
The Cowlitz Tribe opened its Ilani Casino Resort in 2017 and since the first day of operation, the casino management was contracted to Mohegan. The seven-year contract involves a 24% net revenue management fee and the Cowlitz Tribe is considering its options beyond June 2024 when it expires, according to a statement issued by the Cowlitz Tribal Council.
The sizeable management fee of the contract is enough of a motive for tribal leaders to consider going on their own, believes Robert Whelan, a Portland-based economist who tracks the gaming industry. Cited by Oregonlive, Whelan also noted that tribes that initially outsource their casino management usually take it in-house once they gain experience.
The Cowlitz Tribal Council and Cowlitz Tribal Gaming Commission spent the past weekend in a joint executive work session to discuss gaming management agreements.
Cowlitz Tribe statement
“A public vote on the gaming management agreement will take place at an upcoming Tribal Council meeting. No decision on gaming management has been made by Tribal Council at this time,” the statement concluded.
Cutting Ties May Be Risky
When approached by the reporting media, Cowlitz Tribe leaders declined to comment on the story but other tribal members expressed their concerns at the tribe’s ability to go forward managing the casino on its own, pointing to weak leadership and too much dysfunction.
Dumping the Mohegan may prove costly to the tribe as Ilani Casino Resort is one of the most successful casinos in the Northwest, estimated to be generating between $400 million and $500 million in gross gaming revenue annually, allowing the Cowlitz Tribe to continue paying the sizeable management fee.
The 110,000-square-foot casino features nearly 3,000 slot machines, 75 table games, and a sportsbook and is located close to Portland. The construction of a 14-story hotel adjacent to the casino is nearly complete and is expected to drive sales further.
The tribal property which is one of the most popular tourist sites in Clark County, attracting more than 3 million visitors per year, as well as a major employer, providing work for 1,500 people, has been under a federal investigation for a while. For the past six months, the FBI has been probing the resort for possible violations of the antitrust laws for alleged efforts to keep competing casinos away from Ilani.