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Casino: Big risk or big riches?

Critics say two Hard Rock hotels, including one set to open in Tampa, could sink the Seminoles.

By Associated Press
Published December 28, 2003

[AP photo]
This is a model of the Seminole Hard Rock Hotel & Casino. The Seminole Tribe of Florida sees its future in the massive Seminole Hard Rock Hotel & Casino, under construction, a flashy Las Vegas-style complex.

HOLLYWOOD, Fla. - It was here, on a rundown stretch of State Road 7, that the multibillion-dollar Indian gambling industry had its humble beginnings. Today, the Seminoles' original high-stakes bingo hall still stands, but the squat building seems a relic from the past.

Just down the road, the tribe sees its future: a flashy Las Vegas-style complex called the Seminole Hard Rock Hotel & Casino that now is under construction.

There are big dreams, great expectations. Tribal leaders hope the casino and a twin complex in Tampa will more than triple annual gambling revenues to about $1-billion after they open early next year.

But some members fear overreaching might cause their spectacular rags-to-riches story to end in ruin.

The tribe has taken on $410-million in debt to finance the Hard Rock casino project. James Billie, the tribe's previous leader and the man who built the Seminoles' gambling empire, was ousted over a scandal involving allegations of multi-milliondollar spending sprees.

Some Seminoles think the quest for wealth has blinded tribal leadership to the real needs of its people.

"We have a severe housing shortage, infrastructure that needs to be updated," tribal member Gloria Wilson said. "In my opinion, we haven't had a government in a while. They've become a banking institution."

The casino project and its accompanying debt are "too ambitious for our coffers," Wilson said.

The Hollywood complex will be the bigger of the two casinos. The 15-story, 500-room hotel will charge about $150 a night for average rooms.

Seminole Gaming chief executive officer James Allen said there are tentative commitments for 60,000 room bookings, enough to fill the hotel for four months.

The two Seminole complexes are expected to draw more than 20,000 visitors a day, have $700-million in annual revenue and create 6,000 full-time jobs for Indians and non-Indians, tribal officials said.

"It's going to be a pure economic engine," said Max Osceola, the Hollywood representative on the tribal council.

The tribe sold $410-million in 30-year bonds to build the two Seminole Hard Rock Hotel & Casinos, Allen said.

He said the bonds and have been popular with institutional investors and are trading above face value.

The Hard Rock Cafe's parent company, the Rank Group PLC, bought $25-million of the bonds.

The tribe only has a licensing deal to use Hard Rock's name, so the restaurant chain won't manage the complex.

Hard Rock officials declined to comment for this story.

"Some of them were upset, saying, "410-million? That's a lot of money.' And that is a lot of money. But what do they say? You've got to spend money to make money," Osceola said.

There's no doubt gambling money made the Seminole Tribe of Florida rich.

* * *

Each of the tribe's 3,000 or so members receives $42,000 a year and free health care and college tuition because of gambling income.

Tribal leaders say that figure likely will go up after the casinos open in April.

The empire that Billie started with the bingo hall in 1979 led other tribes to turn to gambling, and the industry had $14.5-billion in revenue last year, according to the National Indian Gaming Commission, a federal agency.

But for the Seminoles, wealth also has invited legal troubles and accusations of greed.

Billie and other leaders admitted in a trial where charges were later thrown out that they went on massive spending binges. Only Billie was ousted from leadership.

Tribal lawyers have acknowledged that federal officials still are investigating whether Seminole leaders paid millions of dollars in required taxes on gifts.

The lawyers denied any wrongdoing by the tribe, and Internal Revenue Service officials declined to comment.

Billie says the current leadership is spending too much on the Hard Rock casinos and is ruining his legacy as chief from 1979 to 2001.

"When I was there, they made close to $3-billion. None of these guys will be able to achieve that," he said.

Big plans

The Seminoles' Las Vegas-style luxury casino in Hollywood, Fla., will be bigger than a twin complex planned for Tampa.

It will have 130,000 square feet of casino space, a Hard Rock Cafe, a bar with 42 suspended plasma screen televisions, a spa and a 6,000-seat arena for concerts, among other features. It also will have 300,000 square feet of retail space and restaurants.

[Last modified December 28, 2003, 01:01:07]

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