Al Pemberton, an elected tribal council member of the Red Lake Nation of Minnesota, has spent many weekends over the years as a powwow arena director in both Canada and the U.S. Initially these cultural connections with tribal leaders in Manitoba, Canada, are what led to a historic business partnership between Red Lake and the Assembly of Manitoba Chiefs (AMC). AMC recently announced that the Red Lake Gaming Enterprises (RLGE) was awarded the management/development contract for a new proposed Canadian gaming facility to be owned by the AMC, the Spirit Sands Casino.
“The fact that we are a tribal enterprise and presented to the AMC with tribal leaders in the room from both groups made a big difference,” said Pemberton who brought the opportunity to Red Lake’s attention.
“When tribal councils get together, that certainly seems to be the way to go,” added Rick Rothausen, CFO of the RLGE.
The proposed Spirit Sands Casino design includes 400-500 slot machines, 10 gaming tables, three restaurants and a full-service hotel. The business will be a joint venture of all 64 First Nations of Manitoba and the Swan Lake First Nation reserve land will serve as the physical site. The property is located in Canada just 60-70 miles north of the American border and will be the third aboriginal operated casino in Manitoba.
Rob Ballantyne, economic development/business analyst for the AMC, is excited about the partnership for two reasons. First, because the venture itself is historic in that all 64 Indian Bands in Manitoba will be partnered equally as owners in the casino venture.
“That in itself is a significant feat of a shared vision,” Ballantyne said. Additionally, he is excited about the cross-border trade with the Red Lake Nation and the strengths they bring to the partnership. He hasn’t seen too many examples of cross–border relations, and this one carries both the cultural and the commercial significance. According to Ballantyne, there are many familial relationships between some of the Manitoba Ojibwe Bands and the Red Lake Nation. Ballantyne believes the commercial viability is also significant in that RLGE brings expertise within a comparable environment to the proposed gaming operation. “Red Lake is experienced in a similar market—that is a rural environment—and their ability to attract and maintain customers at their properties has positively impacted our ability to attract financing.”
RLGE operates three casinos on trust land in Minnesota and Rothausen reports that they are in their sixth straight year of record revenue and EBITDA.
During their search for management, the AMC had issued an RFP, and at the time Pemberton brought the idea to Red Lake, the AMC had already met with several applicants. RLGE came into the process a little late, but made a presentation to the AMC that was accepted the same day. RLGE will have strategic alliances with operators and financiers, but the tribe will be actively involved with the project.
“We gave them the history of Red Lake and how we have built our gaming businesses,” Pemberton said. “They really identified with how we’ve put our tribal members to work and have focused on tribal economic development as part of our overall gaming strategy.”
In 1999, a declaration of unity between the Assembly of First Nations (Canada) and the Congress of American Indians (U.S.) was signed, encouraging and calling for nation-to-nation trade. The wording of the declaration clearly establishes the importance of both the cultural and business connectivity of tribes across the border:
We, the people knowing that the Creator placed us here on Mother Earth as sovereign nations and seeking to live in peace, freedom and prosperity with all humanity in accordance with our own traditional laws, are united in our sacred relationship with the land, air, water and resources of our ancestral territories. We are bound by common origin and history, aspiration and experience, and we are brothers and sisters, leaders and warriors of our nations.
From time immemorial, the lands that are now known as Canada and the United States of America have been and continue to be the sacred home of Indigenous Peoples and Nations;
While our Indigenous Peoples and Nations have distinct identities, cultures, languages and traditions, we have also been guided by many common purposes and beliefs, which have been shaped by many common experiences;
We are hereby resolved to affirm and to strengthen those bonds of mutual respect, cooperation and affection. As friends and allies, we Indigenous Peoples and Nations will go forward with greater strength and wisdom as we interact with other governments in our region, our hemisphere and our world. We authorize our national organizations to inform, assist and support each other in the areas of common concern.
(Excerpts from the Declaration of Kinship and Cooperation Among the Indigenous Peoples and Nations of North America)
Pemberton found it interesting that one of the questions from the AMC to the RLGE related to the utilization of tribal cultural themes within the commercial gaming enterprises. Red Lake’s casinos are named “Seven Clans” and their logos and literature clearly display cultural themes. “They wanted to know if including the culture helped or hurt business,” Pemberton said. “We told them it absolutely is a positive.”
The joint venture plans to seek financing for the construction of the new casino from a Canadian commercial bank and other institutional sources. According to Ballantyne, they hope to finalize financing soon and start construction early next year with an aggressive 12 month construction schedule.
In a business environment still recovering from a slow economy and choppy financial markets, tribal-to-tribal business ventures may prove to be the most sustainable form of development. Other tribes have entered into agreements and joint ventures within the U.S., but it is believed that the RLGE and AMC’s agreement is the first venture to cross the international border under the 1999 declaration. Ballantyne believes this historic venture will be extremely rewarding, saying, “10 to 20 years from now the fruits of this will be lasting and benefitting our generations to come.”
Valerie Red-Horse is an investment banker and financial advisor in her role as President/Owner of Red-Horse Financial Group Inc., offering securities through Western International Securities Inc., a FINRA and SIPC member firm. Red-Horse Financial Group and Western International Securities Inc. are separate and unrelated companies. She can be reached at valerie[at]wisdirect.com or (818) 389-4714.
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