EBCI Tribal Council to Discuss Possible Joint Venture on Commercial Casino Project
Posted on: May 5, 2021, 09:43h.
Last updated on: July 7, 2021, 01:44h.
The Eastern Band of Cherokee Indians is considering yet another commercial casino investment project when the sovereign nation’s Tribal Council meets on Thursday.
According to the agenda, posted on the EBCI website, a resolution that gives leaders approval to pursue opportunities under an initiative codenamed “Project Commonwealth” will be discussed.
The resolution would allow tribal leaders to have communications regarding a proposal with a company that’s publicly traded and “has had a long-standing relationship to develop gaming opportunities within a certain proximity” of EBCI’s two casinos in western North Carolina.
The company that matches that description is Caesars Entertainment, which operates the two Harrah’s Cherokee casinos in Cherokee and Murphy.
Last December, EBCI announced its intention to enter the commercial gaming business when it agreed to purchase Caesars Southern Indiana from the Las Vegas-based company for $250 million.
The secretive language is necessary, the resolution notes, because of federal laws regarding insider trading, as well as EBCI’s own internal concerns about disclosing business plans “until all parties are officially ready to announce their plans publicly.”
Cherokees Seek Substantial Stake in Casino Project
If EBCI leaders get the go-ahead, the plan is to discuss a potential joint venture with the publicly traded company.
EBCI Holdings, a business the band created in order to purchase and operate Caesars Southern Indiana once that sale closes, would lead the discussions. In the discussions, EBCI Holdings will seek “a large equity stake” in Project Commonwealth.
The casino project is a greenfield development that would require a substantial amount of debt financing to construct a new facility.
According to the resolution, the publicly traded company would manage the casino for at least five years. However, EBCI Holdings wants the right to buy out its partner during a two-year period once the casino has been in operation for five years.
A project that seemingly matches the description of the casino in the resolution is one that Caesars has been awarded to operate in Danville, Va. Danville sits on the North Carolina state line, 40 miles north of Greensboro, NC. Danville is also about 230 miles northeast of Harrah’s Cherokee.
Virginia also happens to be one of four states called a commonwealth. The other commonwealths are Massachusetts, Pennsylvania, and Kentucky. Massachusetts and Pennsylvania both have casinos, while Kentucky allows its racetracks to offer historical horse racing machines.
Caesars only has one property in any of those states, Harrah’s Philadelphia Casino and Racetrack.
In Danville, Caesars plans to build a $400 million casino resort that would hold up to 2,000 free slot machines, 75 table games, a 2,500-seat theatre, and a 300-room hotel.
Last fall, as EBCI leaders debated pursuing the Caesars Southern Indiana purchase, tribal officials noted that Caesars offered them an opportunity to partner on the Danville project.
Why EBCI Pursues Commercial Gaming
In an interview with Casino.org last November, EBCI Principal Chief Richard Sneed said the tribal nation was considering the commercial casinos business because it stood to lose millions in revenue from its existing casinos, thanks to the Catawba Indian Nation’s plan to build a tribal casino near Charlotte.
EBCI has tried to stop the Catawba project in federal court. But last month, a federal judge ruled in favor of the South Carolina-based tribe.
Casino gaming is a major source of EBCI’s revenue, and in entering the commercial gaming realm, it would follow the likes of the Seminole Tribe of Florida and the Mohegan Tribe of Connecticut.
As Sneed described to Tribal Council members late last year, EBCI Holdings would need to own multiple casinos in order to replace the millions in revenue lost to the Catawba casino, which will open a temporary venue later this year.
In a narrow vote, EBCI leaders approved the plan to create the gaming operations business and provide funding from its accounts to purchase Caesars Southern Indiana. Under EBCI’s plan, EBCI Holdings would eventually use the proceeds from its initial commercial gaming ventures to then purchase future assets.