Manitoba could see more native-run casinos

Manitoba could soon be seeing the development of more aboriginal-owned casinos, despite criticisms that the two existing ones have not provided enough financial benefit to First Nations across the province.

"There's other casino projects on the horizon. I won't get into greater detail," Grand Chief Derek Nepinak of the Assembly of Manitoba Chiefs told CBC News.

"I recognize the need to come together, to recognize the ingenuity and the effort it takes to build a casino, and work towards creating the rest of the casinos we're wanting to build," he added.

There are two First Nations casinos currently operating in Manitoba:

• Aseneskak Casino, which opened near The Pas, Man., in 2002.
• South Beach Casino and Resort, which opened on the Brokenhead Ojibway Nation in 2005.

Each of the casinos is owned by a small group of First Nations.

A third aboriginal casino, Spirit Sands, is approved for the future in western part of the province. 

Manitoba's minister responsible for gaming, Dave Chomiak, said the government will be reviewing any new plans that come forward. 

"Every six months or so a proposal comes up from someone about a casino. What we've always done … is to sit down with the AMC and discuss these issues collaboratively and proceed from there, and that's what we intend to do," Chomiak said in an interview Wednesday.

Annual financial reports show the two existing casinos have generated almost $50 million in profits since they opened.

Profit sharing a touchy subject: minister

CBC News reported this week that despite agreements to share part of the profits with all 63 of Manitoba's First Nations, many have received only $13,128 each.

Both casinos had signed agreements at the outset, stating that 27.5 per cent of profits would go into a fund to be split evenly among all First Nations.

"We've never thought that Manitoba First Nations would all become rich off casino gaming. I don't think that was ever the intention," Nepinak said.

"It was only the intention that we would take advantage of economic opportunity where it arose, and I think we're doing that."

Chomiak said the issue of how casino proceeds are being shared among all First Nations has been a touchy subject.

"We had a lot of disagreement on that," he said, adding that the upcoming Spirit Sands casino will be owned equally by all of the province's First Nations.

"That's been a very difficult process, but fortunately we're proceeding on that," he said.

Chomiak said the idea from the outset was to give First Nations a say in how casino revenue is shared, rather than having the government unilaterally impose such decisions.

Similarly, Chomiak said decisions about the management of the province's aboriginal casinos are up to First Nations.

Management fees criticized

Some chiefs have pointed out that a large part of proceeds from the South Beach casino have been eaten up by $43 million in fees paid so far to Hemisphere Gaming, a Minneapolis-based company that was hired to finance and manage the facility.

South Beach's management agreement with Hemisphere runs until 2028.

"We're going to make mistakes along the way, but we're also going to realize great successes. And I think the successes outweigh the mistakes we've made along the road so far," said Nepinak.

The planned Spirit Sands casino already has an agreement lined up with an outside management company, Minnesota-based Red Lake Gaming Enterprises.

But Nepinak said there are lessons to be learned about long-term contracts with management companies.

"Maybe that could potentially contribute to the length of time it's taking for us to actually get the casino up and running in Spirit Sands," he said.

"We're trying to establish best practices, trying to learn from what some people might consider challenges that were presented at both South Beach and Aseneskak.

"As far as I'm concerned, both casinos are huge success stories in the regions they're operating within," Nepinak added.

Chomiak agrees: "I'd say it's been a relatively good success," he said.