They can give it a new name, revamp the architectural design, and even plug in a few extra million for construction, but we remain unconvinced that the often-delayed casino project south of Carberry will do much to benefit Manitoba First Nations.
On Monday, Hemisphere Gaming announced that work was finally underway for the Sand Hills Casino, which will be built on Swan Lake First Nation land along Highway 5.
The $20-million Sand Hills Casino project, formerly known as the Spirit Sands Casino and Resort, will be the third First Nations-owned casino in the province and when it is finished, it will be the second casino that has been built by Hemisphere Gaming.
Last October, when the Assembly of Manitoba Chiefs Grand Chief Derek Nepinak announced an agreement with Hemisphere Gaming to develop and manage the casino project, the new management company essentially had to start over — the project was scaled-down to an initial $15-million budget from the original $40-million Spirit Sands price tag.
“This is a different project, a different management group, who thought that the name Sand Hills would have a broader appeal I think than Spirit Sands, and along with the logo, might just be a little bit more exciting,” Hemisphere Gaming spokesperson Barbara Czech told the Sun yesterday.
“They were starting from scratch really, with new designs, new construction managers, etc. As you go forward, obviously the number become more firm.”
As the Sun reported earlier this year, Hemisphere Gaming is the same company that financed and operates the South Beach Casino.
Czech couldn’t speak to the specifics of the contract between the Assembly of Manitoba Chiefs and Hemisphere Gaming, but she did confirm the company will manage the Sand Hills Casino for a period of 10 years after construction.
In November 2012, the Brandon Sun obtained a copy of the deal signed between the AMC and the Minnesota-based gaming company, an agreement that exacted hefty management fees, significant revenue shares and a financing incentive fee if Hemisphere is able to negotiate a better financing interest rate with a bank, than the state project rate of 13.5 per cent.
Czech yesterday cautioned the Sun that the version acquired by the Sun may not have been a copy of the final agreement, and that she was “not at all confident that those details are correct.”
However, she did not offer to correct the information and the AMC has never disputed the Brandon Sun story.
Whatever the case, Hemisphere’s record speaks for itself. More than a year ago, the private firm was the subject of a CBC News investigation which found that the company had made more than $43 million — mostly in management fees — on the South Beach Casino since it opened in 2005, while the casino itself had total net earnings of $39 million.
Former Birdtail Sioux First Nation chief Ken Chalmers told the Sun late last year that his band had only received about $15,000 since the Aseneskak and South Beach casinos opened.
In our opinion, it’s not likely that the company would settle for much less with Sand Hills, given the fact that the construction and location of Manitoba’s third casino has been plagued with false starts and financing problems.
The problem here is not that Hemisphere Gaming is making money from this casino deal — that’s what private companies do. Why else would they be involved, except for the revenues?
The problem continues to be the Manitoba NDP government’s aboriginal casino model, which has failed to show any substantial benefit for the greater aboriginal community in this province. Alberta has capped management fees for casinos at 15 per cent, and as the Saskatchewan Indian Gaming Authority ultimately manages First Nation casinos in that province, there is no management fee structure.
But Manitoba’s NDP shows no signs of attempting to impose new regulations that would cap management fees and see a greater revenue share go to our provincial First Nations.
Czech confirmed the company will manage the casino for a period of 10 years after construction. After that, the board of Sand Hills Casino can choose to extend the agreement or move in another direction.
And so, even if Sand Hills proves to be a monetary success, it will be 10 years before Hemisphere’s management agreement is up for renewal. If the management agreement is even close to being as lucrative as our copy of the agreement shows, it’s the private sector, not First Nations, that stands to benefit.
Republished from the Brandon Sun print edition June 12, 2013