DATELINE

Gambling on a casino

November 9 1987
DATELINE

Gambling on a casino

November 9 1987

Gambling on a casino

DATELINE

SAULT STE. MARIE, MICH.

The building has none of the neon glitter that its name suggests. In fact, the $1-million Vegas Kewadin looks more like a brown-brick suburban funeral home than a gambling casino. But the front-door security guard, with his nightstick in a holster, dispels that image. Holding a metal detector in his hand, Paul McCoy, a Sault Chippewa Indian, scans the patrons for concealed guns or knives as they enter. Inside, on the gaming floor, it is standing room only around the 36 blackjack tables, four poker tables and the Big 6 money wheel, a cousin of roulette. What is extraordinary about the capacity crowd of 350 on one recent night is that it is made up mostly of Canadians. Vegas Kewadin, located on the 410-acre Sault Tribe of Chippewa Indians reserve in Sault Ste. Marie, Mich, (population 15,000), is specifically designed to cater to the 82,000-strong Canadian market just across St. Mary’s River in sistercity Sault Ste. Marie, Ont.

The Sault Chippewa tribe conceived Vegas Kewadin—kewadin is Ojibwa for “north”—as a way of achieving financial

self-sufficiency, particularly after being hit hard by Reagan administration cutbacks in funding to reserves. And since the casino, designed with the help of a Las Vegas consultant, opened two years ago, it has more than fulfilled expectations. About 300,000 patrons have passed through its heavy wooden doors—22,000 last August alone. According to assistant general manager Bonnie McKerchie, the building’s mortgage has already been paid off and $1 million in net profits has been realized since its opening. Still, Kewadin has ignited controversy within the local business community and has aroused fears about its social impact. Meanwhile, a U.S. federal lawsuit threatens to shut it down.

Vegas Kewadin is a no-frills casino. The menu features items such as a twopound hamburger, and some patrons have complained that the complimentary White Russians—made with milk, Tia Maria and vodka—taste like chocolate milk. Discarded piles of pull tabs, akin to scratch-and-win lottery tickets, litter the room. Still, attracted by the adventure of gambling—and a bar that stays open for gamblers until at least 4 a.m. seven days a week—customers from the Sault Ste. Marie, Ont., area account for 75 per cent of the casino’s clientele. Kewadin’s management regularly distributes free drink and $5-chip vouchers across the border in an effort to attract Canadians, who may gamble in their own currency. “I have a lot of fun there,” said Terri-Lynn Elliott, a secretary from the Canadian side. “They get everything from doctors’ groups to bikers up from Detroit.”

The 6,400 Sault Chippewa in Kewadin did not have their own reserve until they were federally recognized in 1978. Now, the 1,000 permanent residents live in 230 skylight-outfitted homes, built by their own construction company. Casino profits are used to increase the reserve land and support the police force and day care programs. And although the casino has a high employee turnover, it has helped lower the reserve’s unemployment rate to 48 per cent from 64. Said McKerchie: “I have dealers in their 30s who have never worked before.”

Indian gaming was pioneered by Florida’s Seminole reserve, which introduced high-stakes bingo in 1979. Now, more than 100 U.S. reserves have bingo operations, and about a dozen have opened casinos, with Kewadin as the largest. Although gambling is strictly regulated in most states, Indian gaming is protected by constitutional guarantees against the encroachment of state and municipal law on reserve lands. But various state governments have tried to close the casinos by claiming that they violate the 1970 Organized Crime Control Act. One lawsuit, brought by the U.S. attor-

ney general’s office against Vegas Kewadin and four other Michigan tribes in November, 1985, is still pending.

Indeed, some local businessmen want Vegas Kewadin shut down. One tavern owner claimed that he had lost $100,000 worth of tourist business to the casino during the past year alone. He charged that the special status granted to Indian reserves constituted unfair competition. “They don’t have to pay any taxes,” he said. “It used to be that we were one nation under God—now, apparently, we are two sovereign nations. It is going to ruin everybody.”

Still, for the most part the business community has embraced the casino, largely because it has had a favorable impact on the town’s economy. “The casino is bringing a lot more tour buses in,” said Chamber of Commerce executive director Francis (Bud) Mansfield. “And our current unemployment figure of 10 per cent is the lowest I’ve seen in 11 years. Those Canadian dollars work real good.”

But many people in Sault Ste. Marie, Ont., say that they are concerned by the dollar drain. The Canadian city has economic problems of its own, with a 12.7per-cent unemployment rate and thousands of layoffs at the city’s principal employer, Algoma Steel. Said Mayor Joseph Fratesi: “All [the casino] has done is hurt many individuals at a time when they could least afford it.” There have been social costs too. One single mother

who admitted to being a compulsive gambler said that she won an average of $150 a night when Kewadin first opened, but then she hit a losing streak and has now accumulated personal debts of $500. The woman, a mother of two who requested anonymity, said that she knew of two marriage breakups resulting from gambling abuse. “A lot of people got destroyed over there,” she said.

But Kewadin is likely here to stay. Tribe members say they are optimistic that the federal government will lose its case in January. At the same time, Congress is formulating an act that would legitimize casinos such as Kewadin and provide national standards. In the meantime, Kewadin managers say that they are planning to add a craps table—and , build a live-act nightclub with adjoining restaurant—within the next few years. As McKerchie said, “People love to gamble.”

—PAUL KAIHLA in Sault Ste. Marie, Mich.