Tribe Drops Harrah's As Casino's Manager

Citing debt problems and a drop in customers, the Upper Skagit Indian Tribe and Harrah's Entertainment announced yesterday an agreement for Harrah's to withdraw as managers of the tribe's casino in November.

The move will mean little for casino-goers who visit Harrah's Skagit Valley Casino, just off Interstate 5 north of Burlington in Skagit County, tribal members said. They added that business is still good and there are plans to add a resort.

But it represents the latest in a series of financial problems for tribal casinos in the state.

Of 12 tribal casinos approved by the state since 1988, one closed last summer - the Lummi Casino near Bellingham - and at least three more, citing financial problems, have stopped making their required community-impact contributions, state officials said.

Skagit Valley Casino officials, like those at other casinos in the state, cite the absence of slot machines - devices banned by state law and rejected by voters - as a reason for the financial slump.

The Asian financial crisis also is apparently having an effect on business at the Skagit Valley Casino; there has been a drop in the number of Asian customers, many of whom come in from Vancouver, B.C., said spokesman Don Guglielmino.

"The frequency (of their visits) was not as great as it once was," he said.

Upon Harrah's departure on Nov. 2, the casino will be renamed "Skagit Valley Casino and Resort" and managed by Excelsior Gaming of Willimantic, Conn.

Tribal casinos typically hire established management companies, like Harrah's, relying on their expertise to manage the casino.

The company, in turn, typically gets a cut of the casino's profits, said Amy Patjens, spokeswoman for the Washington State Gambling Commission.

The agreement between Skagit Valley and Harrah's is part of a refinancing plan by the casino to pay Harrah's about $25 million - the balance of its $29 million opening costs - which the casino is required to do within five years by the Indian Gaming Regulatory Act, said Doreen Maloney, general manager for the Upper Skagit Indian Tribe, based in Bow, Skagit County. The casino opened in December 1995.

Under the plan, the tribe will get a new loan - one with a 20-year payment plan - and use that money to pay Harrah's, Maloney said.

Maloney said the plan was hatched after profits from the casino fell short, adding that paying Harrah's the full amount in five years was "not possible and not realistic."

Arthur Santana's phone message number is 206-515-5684. His e-mail address is: asantana@seattletimes.com