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SLEEPING GIANT GROUP

Frequently Asked Questions

Questions and Answers About The Sleeping Giant Casino in Hadyen Colorado

1. Why a casino?
2. Why a Native-American-owned casino?
3. What is the approval process to license a Native-American owned casino?
4. Which Native-American tribes meet the legal standards of ownership as detailed in federal licensing regulations?
5. What taxes will an Indian-owned casino pay at the city and county levels?
6. How long will the approval process take?
7. Does Colorado’s approval of a gaming compact require the approval of the state legislature?
8. How do Americans feel about casino gaming?
9. Are casinos good members of the communities where they reside?
10. What has been the experience of other areas that have a casino in or nearby their communities?
11. Didn’t Hayden consider and reject a proposed Native-American casino 13 years ago?
12. How big of a business will the Sleeping Giant Casino be?
13. Will there be investment opportunities beyond the casino?
14. How many jobs will be created, directly and indirectly, by the casino?
15. What will these jobs pay?
16. How will job creation resulting from this project affect the regional labor market?
17. What are the projected costs of construction for the casino and related projects; and is it anticipated that locally-based businesses will have the opportunity to participate in these projects?
18. Will area colleges have training opportunities for the casino workforce?
19. Will revenues from Sleeping Giant Casino take away from other businesses in the area?
20. What are the related benefits to the regional communities of the casino’s presence?
21. Will the approval and opening of Sleeping Giant Casino lead to additional casinos in the Yampa Valley?
22. Will a casino in Routt County lead to undesirable activities?
23. Where will the casino be located?
24. What does research show about gambling as an addiction and its impacts on a community?

1. Why a casino?

This project is about the region’s future economic vitality. It aligns the region with the current and future tourism market. Today’s generation of tourists, whether they are skiers or those attracted to outdoor summer activities, are looking for a range of entertainment attractions in making their vacation choices. A casino and entertainment venue would provide a distinct competitive advantage to the Yampa Valley area over many other similar vacation choices available to the tourist market. It also will provide a significant marketing partner for the numerous other tourist attractions in the region; and help the region have more year-round tourism, reducing the economic lulls during off-season periods.

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2. Why a Native-American-owned casino?

A casino owned by a Native-American tribe provides the best option under existing law and regulation to bring such a venue to Routt County. Colorado law currently restricts commercial casino operations to three specific localities: Blackhawk, Central City and Cripple Creek. Amending this restriction would require statewide voter approval. A tribal owned casino also will provide significant economic benefits to the tribal community to assist in efforts to sustain and enhance economic development and combat existing pockets of poverty, as do the two existing tribal-owned casinos in the southwest corner of the state.

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3. What is the approval process to license a Native-American owned casino?

Licensing is a three-step process. The first two steps are unique to the fact that licensing is being sought on lands that are off-reservation. The third step is typical to all licenses sought to open a Native-American owned casino.

Step one requires the Native-American tribe to seek federal approval to place off-reservation land owned by the tribe into what is called “land into trust.” This is done by application to the U.S. Secretary of the Interior. Approval is granted when “the Secretary after consultation with the Indian tribe and appropriate State and local officials, including officials of other nearby Indian tribes, determines that a gaming establishment on newly acquired lands would be in the best interest of the Indian tribe and its members, and would not be detrimental to the surrounding community…”

Step two requires that “the Governor of the State in which the gaming activity is to be conducted concurs in the Secretary’s determination.” The Governor is given up to one year to review this matter and make a determination.

Step three requires that the Native-American tribe seeking to open a casino negotiate and reach an agreement, commonly called a “compact,” with the state in which the gaming is to be conducted. Such compacts typically (among a wide range of provisions) detail the activities to be allowed at the casino, fees to be paid to the state and local governments to offset costs related to the casino, requirements to mitigate any potential or actual environmental impacts, and commitments of support to social service activities in surrounding or nearby communities.

These steps do not necessarily occur in order. They can occur simultaneously. For example, the tribal-state compact is sometimes negotiated during the step one federal application process to enable the federal review to have a complete picture of all future arrangements. In such instances, the compact is submitted along with the other Department of Interior land-into trust application documents.

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4. Which Native-American tribes meet the legal standards of ownership as detailed in federal licensing regulations?

Preliminary outreach to Colorado historians indicates that at least three federally registered Native-American tribes have strong ancestral ties to the Yampa Valley region: The Northern Utes, The Mountain Utes, and The Southern Utes. The Northern Utes reservation is located in northern Utah, with both The Southern Utes and The Mountain Utes located in southwestern Colorado. Both The Southern Utes and The Mountain Utes own and operate modest-sized casinos on their reservation lands in southwestern Colorado.

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5. What taxes will an Indian-owned casino pay at the city and county levels?

Native-American tribes are government entities. A Native-American owned casino on lands held in trust by the federal government results, according to a Congressional Research Service study, in “the removal of the land from state and local tax rolls…”

This said, as part of negotiations between the tribal casino owners, and state and local governing authorities, “fees” are paid to the state and to local governments to offset the costs of various local services.

One example of this are various Memorandum of Understanding (MOU) entered into recently as part of a California Native-American owned casino’s land-in-trust approval. The casino is projected to have $46 million in revenue by year seven of its operation, significantly below projections for Sleeping Giant Casino. One MOU with the local county government called for the county to receive $83 million over 20 years for various services. A second MOU with a nearby city called for payments of $4.8 million over 15 years.

A second example, typical of fee-based agreements, is where the tribe ownership pays 10-12% of slot revenue to the state. In a casino the projected size of Sleeping Giant, this could yield the state $5.25 – $6.3 million annually based on year two revenues alone. All of such fees would be in addition to local tax revenues generated as a result of increased economic activity related to the casino’s impact on increased employment, increased commercial and residential investment, increased visitors to the region, among numerous factors. Yampa Valley Data Partners estimates that casino-related economic activity will generate $4.3 million in sales tax revenues across the Yampa Valley.

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6. How long will the approval process take?

This is very difficult to predict. But we do know that recent changes in the regulatory process at the federal level have started to loosen a logjam of existing applications and reform criteria that often prevented approval of otherwise viable applications.

The immediate goal of the Sleeping Giant Group is two-fold.

First, we intend to assemble the best possible partners for this project:

  • A tribal owner that will benefit directly and significant from ownership of the casino and that is committed fully to the project’s success and meets all federal regulatory requirements.
  • And a casino management partner with a strong track record of executing rapidly all the steps required for licensing approval at the federal and state level, as well as working with our management team and the local communities to ensure the construction and operation of all venues are consistent with community standards and values.

Second, we intend to make sure that all the surrounding communities – Hayden, Steamboat Springs, Craig, North Routt and South Routt – are fully apprised of all plans related to the establishment of a casino at the Hayden Airport and are given the opportunity to provide feedback to our teams to make sure the project fully reflects the desires and needs of the region. We already have started discussions to create “Community Advisory Councils,” and plan to hold ongoing “town-hall” meetings in each of the five surrounding communities, in addition to the over 50 meetings we held prior to our announcement to help fully understand and integrate community feedback into this project’s earliest planning.

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7. Does Colorado’s approval of a gaming compact require the approval of the state legislature?

No. Some states do require approval by the state legislature, according to a survey conducted by the National Conference of State Legislatures, but Colorado does not. In Colorado, the Executive Branch negotiates gaming compacts. Both of Colorado’s existing Native-American owned casinos have compacts with the state and both are of unlimited duration.

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8. How do Americans feel about casino gaming?

American attitudes toward casino gaming have been fairly consistent over the past ten years. In polling conducted by Peter D. Hart, co-pollster for the NBC-Wall Street Journal poll, approximately 80-82% of Americans said that casino gaming was either “perfectly acceptable for anyone” or “acceptable for others but not you personally.” Only 15-17% said that casino gaming was “not acceptable for anyone.”

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9. Are casinos good members of the communities where they reside?

Many are, and some are not. But the commitment of Sleeping Giant Group, the locally owned and locally led team leading this effort, is to identify and exceed the best practices found in casino-community partnerships. In Tahoe, for example, the Caesars Foundation recently donated $21,400 to purchase individual night vision goggles for the crew of the area’s search and rescue helicopter. In Oregon, the Coquille Indian Tribes Mill casino set aside a portion of gaming revenue to establish a community fund that awarded area non-profit organizations $345,800 in grants in 2011. Federal law establishing the regulatory framework for Indian-owned casinos specifically allows for casino donations to charitable organizations.

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10. What has been the experience of other areas that have a casino in or nearby their communities?

Comparisons from one community to another are difficult to make, and should be viewed with caution. Each community is different and how they manage a casino development is also different. The best and most comprehensive evaluation of this question has been done by noted NBC-Wall Street Journal pollster, Peter Hart, who surveyed community leaders in gaming jurisdictions. Hart found: “in the broadest sense, elected officials and civic leaders are strikingly positive about the impact that casinos have had on their communities. They welcome the additional tax revenue, jobs, secondary economic development, and contributions to community and charitable organizations. At the same time, the negative effects predicted by casino opponents have largely failed to materialize. Taking everything into consideration, these public officials strongly endorse the decision to allow gaming in their communities – with the benefit of hindsight, fully 75 percent say they would vote to allow casinos if they could go back and do it all over again.”

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11. Didn’t Hayden consider and reject a proposed Native-American casino 13 years ago?

Yes. In 1999, the Northern Ute tribe, based in northwest Utah, proposed a casino project for the Hayden area. The proposal was rejected by a public referendum.

A review of the minutes of public comments during council meetings at that time point to a range of citizen concerns. These included the potential for a shortage of labor, the impact of such development on agricultural land, worries that home and land values would escalate, fears about unwanted and undesirable growth, and concerns about the impact of gambling on individuals and families. It was pointed out that Hayden did not need additional tax revenue to meet its expected budget and community needs.

It will be up to the citizens of Hayden to decide if the factors that guided its decision in 1999 are the same today or whether changes have occurred since then to produce a different point of view.

Factors likely to be considered today include the following: home prices and land values are down significantly over the past five years; labor is in a supply surplus, with many residents forced to work multiple and seasonal jobs, often requiring long and expensive commutes; critical infrastructure needs in areas such as water, school repair and replacement, and road maintenance are putting significant pressures on a relatively narrow tax base; and the ability of existing businesses to thrive given the area’s economic base is an ongoing challenge. The land proposed for the casino site already is annexed for commercial purposes and will not impact existing agricultural land. Undesirable commercial development can be restricted by appropriate town and county ordinances, as they have been in other communities across the nation that have welcomed casino development. In addition the gaming industry has worked aggressively with behavioral scientists to develop far more effective programs to prevent abusive gambling.

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12. How big of a business will the Sleeping Giant Casino be?

The casino alone will likely be one of Routt County’s largest businesses by revenue. The Innovation Group, a highly regarded casino industry market assessment firm, based in Littleton, Colorado, forecasts second-year revenue at just under $57 million, with growth to over $61 million by year five. These estimates are based on tried and true industry models, and rely heavily on revenues from tourists visiting Yampa Valley. These estimates do not include casino-related venues such as a hotel, an entertainment center and food services.

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13. Will there be investment opportunities beyond the casino?

It is anticipated that additional development will occur at or very nearby the casino site, including an entertainment venue large enough to attract world-class acts and shows, multiple food service venues, and a 200-room hotel, along with indoor and covered parking.

These venues will provide opportunities for locally based investment and ownership, and will produce tax revenue for local and county governments through property taxes, sales taxes and other legislated taxes and fees.

These development plans are not unusual for casino projects, where casino income typically represents about 70% of an overall project, with food and beverage averaging about 13%, lodging about 10% and other revenues, including entertainment about 7%.

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14. How many jobs will be created, directly and indirectly, by the casino?

Industry experts consulted by The Sleeping Giant Group estimated that a casino with $60 million in annual revenue will create about 550 full-time, permanent jobs along with about 100 part-time, temporary jobs. According to Yampa Valley Data Partners, this estimate along with its own economic analysis, results in a total projection of 995 local jobs.

Of the 445 jobs projected by Yampa Valley Data Partners to be created outside of the casino, 51 jobs are associated with the direct and indirect impacts of employment at the facility and the facility’s use of local vendors, the remaining 394 jobs are projected to result from an increase in the area of visitors and visitor activities. The projected 995 jobs do not include any ancillary employment in entertainment venues or other businesses that may be planned in the future.

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15. What will these jobs pay?

Employment in the casino industry cuts across a wide range of jobs and job categories. Salary.com, for example, in its survey of industry pay scales has identified 182 different job categories covering employment in casinos and related businesses such as food services and hotel operations.

A result study by the Washington, D.C.-based firm, The Brattle Group, concluded that industry salaries and benefits totaled $15 billion in 2010. This paid the salary and benefits of 350,000 industry jobs, or over $42,850 per average job. But within the range of different industry jobs, salaries vary widely.

Payscale.com lists a number of different jobs, with very different average pay rates. Examples include: restaurant general manager, $58,958; casino host, $35,357; food and beverage director, $90,000; executive casino host, $53,458. Salary.com provides further similar average pay data, which, like other compiled pay scales, vary by labor market and industry experience. Examples here include: player’s club director, $52,336; cage shift supervisor, $39,849; cage cashier, $28,812; blackjack dealer, $14,429 plus tips. These pay rates do not include additional compensation, including benefits such as health care and vacation pay.

Sleeping Giant casino pay scales will likely reflect local labor market conditions in addition to industry standards. But industry averages compare favorably to hourly wage rates and labor source income in Routt County. 2009 labor source income, according Yampa Valley Data Partners, averaged $31,940, with hourly wages at $20.19. Both of these numbers are well below casino industry averages, although they are significantly higher than the “self-sufficiency wage for a family of two adults and two children” of $14.78 per hour for residents of Routt County.

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16. How will job creation resulting from this project affect the regional labor market?

Most recent data from Yampa Valley Data Partners shows that the regional labor market has contracted significantly over the past four years, with 1st quarter 2011 jobs numbers in Routt County approximately 4,000 below corresponding quarters of 2007 and 2008. This 25% reduction also results in a significant decrease in employment-related income.

Clearly job creation, directly at the casino and related venues and indirectly from increased regional economic activity, will help move the region back toward the levels seen prior to the recession and the contraction that occurred in construction and development-related employment.

The goal of this project is to contribute significantly to economic needs of Sleeping Giant’s tribal owners, as well as to the region’s economic growth and vitality. Job opportunities throughout the region will occur at a wide range of businesses and sectors, including the tourism sector, real estate development and related businesses, public sector positions, transportation, retail and consumer services.

With growth and greater business activity (particularly as it assists the local small business community achieve higher revenue and increased profit margins) will come increased opportunity for better paying jobs and a strengthening of the region’s middle class.

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17. What are the projected costs of construction for the casino and related projects; and is it anticipated that locally-based businesses will have the opportunity to participate in these projects?

The cost of constructing a casino the size our market will support is estimated at $52,000,000. A reasonable effort will be made to use local contractors, particularly in those areas that do not require specific expertise and experience in casino construction. The construction phase of the casino alone is expected to employee 150 workers for the length of the project, many of which will be local.

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18. Will area colleges have training opportunities for the casino workforce?

It is not unusual for casinos to partner with local area colleges to train their workforce.

In Columbus, Ohio, for example, such a partnership has been developed between the planned casino and three area colleges. Students enter training programs designed jointly by the casino and the college after being pre-screened by the casino company. The company reimburses the student’s costs for the training once the program is completed and the student begins work at the casino.

Colorado Mountain College already has courses and programs focused on the hospitality industry. It represents the type of ideal partner for this project’s workforce development.

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19. Will revenues from Sleeping Giant Casino take away from other businesses in the area?

No, they will likely do just the opposite. The market study prepared by the Innovation Group projects an increase in tourism of approximately 15% as a result of an addition of a casino to Yampa Valley tourism attractions. A casino in the Yampa Valley represents a competitive advantage that no other resort community in Colorado will possess.

Increased tourism, both for the summer as well as the winter seasons, means increases in lodging utilization, greater retail traffic, additional restaurant traffic, and greater use of existing tourism assets devoted to winter sports, biking, hiking, fishing, hunting, golf and tennis. Yampa Valley Data Partners projects that visitor spending alone will rise by $40.8 million annually because of the casino’s net economic contribution to the region, in addition to $13 million in increased local consumer spending.

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20. What are the related benefits to the regional communities of the casino’s presence?

Two studies speak directly to this question. One is focused on the casino industry on average; the other provides projections specific to Sleeping Giant Casino and the Yampa Valley.

The Brattle Group documents the multiplier effect for both jobs and income, meaning how many jobs and how much income in the casino industry, on average, translate into wider job creation and additional income. It concludes that each casino job on average generated .92 additional jobs, for a total of 1.92 new jobs for each casino job. This multiplier effect is significantly larger than the retail industry’s average of 1.525. It also concludes that each dollar of casino gaming revenue generates $1.49 in additional revenue for the economy through indirect and induced impacts, for a total of $2.49 generated income. This also exceeds the retail industry’s average of $2.242.

According to Yampa Valley Data Partners the benefits of a Casino will be felt in both Routt and Moffat counties. On a direct/ indirect/ induced basis the proposed gaming facility is projected to create 995 jobs, add $34.5 million in household Income, $13 million in local consumer spending, $59.8 million in increased visitor spending and $4.3 million in sales tax revenues. The Town of Hayden is expected to share significantly in these economic impacts due to its proximity to the casino.

In addition, the short-term impact associated with the construction of the gaming facility will result in 154 direct construction jobs with another 19 jobs associated with the increase household spending as a direct result of the construction jobs. On a direct/ indirect/induced basis the activity associated with the construction will result in $12.3 million in increase household income, $4.7 million in local spending and $331,000 in additional sales tax collections. Based on the market assessment done by the Innovation Group, the gaming facility will result in a 15% increase in the number of visitors to the area. On an annual basis this increase translates to almost 58,000 additional visitors coming to the Yampa Valley.

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21. Will the approval and opening of Sleeping Giant Casino lead to additional casinos in the Yampa Valley?

No. The Innovation Group study has identified the potential market for a casino in the Yampa Valley. It is limited to one, modest-sized casino. Sleeping Giant is not considered a destination casino, in the way casinos are in other vastly different markets. Sleeping Giant will not attract significant numbers of visitors to the Yampa Valley who just want to gamble. Such customers have other venues across the country for this purpose, including, of course, Las Vegas, Reno, and countless other local casinos.

Sleeping Giant is projected by industry experts to be an additional entertainment option to supplement the many tourist assets that already exist in the Valley. It should further be noted that the federal-state regulatory approval process makes it virtually impossible for a second “land-in-trust” casino site to be approved. And Colorado’s own unique restrictions on commercial casinos outside of the three front-range existing sites also will serve to prohibit any commercial casinos in the Yampa Valley.

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22. Will a casino in Routt County lead to undesirable activities?

Some people will say “yes,” and others will say “no.” The reality of the record of casinos and their presence in a community is that generalizations often overshadow realities.

Sleeping Giant Group and any partners and investors who join this effort will be committed to ensuring that a casino will not foster any undesired commercial activity in the Yampa Valley. Sleeping Giant Group will lead the effort to identify communities that have managed casino development smartly and others that have not. We will bring to the project specific “best practices” showing how the communities used local ordinances to limit undesirable commercial development and ensured that their casino was developed in ways that reflected the long-held values central to each community.

It also should be recognized that the town council in Hayden, the city councils of Steamboat Springs and Craig, the County Commissions of Routt and Moffat will have the next several years to craft and pass legislation to ensure that community values are upheld regarding the prevention of undesirable activities. Sleeping Giant Group will support these efforts and devote the resources necessary to further ensure that community best practices in these areas are identified and provided to each of the governing institutions in the Yampa Valley.

Sleeping Giant Group is further committed to ensuring that the shared values identified through Vision2030 – specifically support for affordable housing, agriculture and open space, arts and culture, the economy, education, government, heritage, planning, recreation, seniors, sustainability, transportation and youth – be reflected in the planning, execution and long-term management of Sleeping Giant Casino and related development.

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23. Where will the casino be located??

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24. What does research show about gambling as an addiction and its impacts on a community?

Gambling can be addictive, but as with many things, the perception of the problem often differs from the reality.

According to the National Gambling Impact Study, a congressionally mandated commission, the percentage of Americans that are pathological gamblers ranges from 0.1 percent to 0.6 percent. The percentage of Americans considered to be problem gamblers is 2.3 percent. This data tracks with a study published in the Journal of Clinical Psychiatry in 2005, which estimated a lifetime prevalence rate of pathological gambling at 0.42 percent based upon data derived from a sample of 43,000 U.S. residents aged 18 and older.

Addiction behavior rates, moreover, are no higher nearer to a casino as opposed to rates among populations located significant distances from a casino. A 2008 study published in Psychology of Addictive Behaviors concluded that “in a setting in which many types of gambling activities are available, casino proximity in itself does not appear to explain the rate of gambling-related problems.”

For comparison purpose, researchers at the National Institute on Alcohol Abuse and Alcoholism found 12.5 percent of Americans reported alcohol dependence. This translates into a dependency rate for alcohol use that is 30 times the mean rate of gambling addiction.

Finally, it should be noted that the presence of a casino does not, as is widely assumed, translate into higher rates of personal economic dysfunction. A study by the University of Chicago’s National Opinion Research Center found that communities closest to casinos experienced a 12 to 17 percent drop in welfare payments, unemployment rates and unemployment insurance after the introduction of casino gaming. Another study found that “access by individuals to casino gaming facilities was found to have no statistically significant impact on personal bankruptcy filings.”

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