Cherokee projects a budget deficit; no date for the reopening of the casino has yet been announced
As Harrah’s Cherokee Casino marks its seventh week of closure due to the coronavirus pandemic, leaders of the Eastern Band of Cherokee Indians are planning the tribe’s financial future in the face of the casino’s revenue evaporating.
Casino profits represent about half of the tribe’s budget, with 51.2% of current year revenue expected to come from gaming operations. The coronavirus shutdown has brought that revenue stream to a halt, and even when it reopens, operations are expected to resume at a much lower level.
“The property is bullish and thinks it can go up to 70%,” Finance Secretary Cory Blankesnhip said in an April 29 video update. “Caesar’s Corporate says accolade for 30 or 40 (percent).”
Senior Chief Richard Sneed plans to pull the middle in planning the budget for the 2020-2021 fiscal year – which begins Oct. 1 – by basing spending on 50% of normal casino projections. Currently, the tribal budget is based on 80% of casino projections, making it “the most conservative budget approach in tribal government history,” Blankenship said. This approach has placed the tribe in a “very lucky position,” with a financial cushion in place and a healthy level of reserves to support operations.
“But just because we can support operations doesn’t mean we can’t plan how to overcome this particular situation,” Blankenship said.
The tribe will look at its three main spending categories – personnel, contracts and capital spending – to find cuts while maintaining their jobs, manpower and services, Blankenship said.
The crisis will also affect per capita payments – the semi-annual distributions that tribal members receive as casino shareholders – and lead to the suspension of the tribe’s per capita loan program, which allows tribal members to receive borrowed monthly payments. on their future distributions per capita.
“Now is the time to start planning ahead,” Sneed said. “If you can make future rent or house payments (with your June distribution), that would be a very wise thing to do.”
Per capita loans will continue to be available for April and May, but after that the program will be suspended until further notice. Loans usually don’t go out in June anyway, as that’s when one of the semi-annual per capita payments is issued, but loans won’t resume in July as they normally do.
“We felt it was important to continue this program until this scheduled break in June, and then to halt the program after that until we can see how the distribution of gaming operations will start to arrive at. the tribe, ”Blankenship said.
The June per capita payouts are based on the casino’s income earned from October to March, while the December checks are from the profits recorded from April to September. Although it is only a factor of one of the six months reflected in the June check, COVID-19 will leave its mark on the size of this distribution.
The pre-tax distribution will be $ 5,859, down $ 450 from $ 6,309 in June 2019. After tax, tribal members will receive $ 4,981.
“I think it’s a very good cast, all things considered,” Sneed said.
On an annual basis, total per capita payments have increased continuously since 2010. Since 2014, the only time so far that disbursements have declined from June to June is when payments have increased from 5,511 $ to $ 5,341 between June 2016 and June 2017. December distributions are always higher than June distributions because they are derived from income earned during the busiest time of the year.
While the cut between the June 2019 and June 2020 payouts is relatively modest, tribal leaders expect the December cast to suffer even more. The period used to calculate the June payout included only two weeks of casino closure, and none of the slower paybacks that are expected to follow its eventual reopening. No reopening date has yet been announced.
“Discussions are taking place within EBCI on how and when the border can reopen, but no specific timeline has been announced,” said Brian Saunooke, regional vice president of marketing for Harrah.