The winning gamblers
In Seminole gambling, a few are big winners
The Seminole tribe's Florida casinos are taking in nearly $500-million a year.
By BRAD GOLDSTEIN and JEFF TESTERMAN
Times Staff Writers
Eighteen years after his small tribe pioneered Indian gambling in America, Seminole Chairman James Billie can cruise over his territory in Florida in a $9-million jet and see a tribe awash in money.
If the Seminoles were a public company, they would be one of the 50-largest in Florida -- and one of the most profitable. Exact income figures are not available, but in fiscal 1997, after paying expenses such as jackpots, management fees and overhead, the tribe projected profits in excess of $110-million. That profit is tax-free because of the sovereign-nation status of Indian tribes.
But where does all the money pouring into the casinos go?
ATimes investigation found some of the millions easy to track, and some veiled in mystery and intrigue:
* For a handful of people, gambling has been a bonanza. The non-Seminole owners of the management companies that run the casinos are very well paid -- an estimated total of $60-million in fiscal 1997.
A few Seminoles have done well, too. Billie has a 47-foot yacht, owns 20 acres of land in Oklahoma with three working oil wells on it, and has at his disposal the $9-million jet (which once belonged to Philippine President Ferdinand Marcos) and three helicopters. Billie's predecessor as leader of the tribe, Howard Tommie, is getting $12.5-million from a casino deal on top of millions he already has received.
* An increasing slice of the money goes to each of the tribe's 2,500 men, women and children in dividends paid monthly out of gambling revenues.
For years, the dividend was meager, never exceeding $1,000 a year, but in 1994 it jumped to $12,000. Next month, it will become $18,000. That means a family of four will get $72,000 a year, in addition to any income derived from jobs.
* Hundreds of thousands of dollars have gone to a few casino patrons who have had incredible runs of luck at Seminole casinos.
In just six months, one woman playing video slot machines at the Immokalee casino won 57 jackpots worth a total $475,000. Another gambler beat the slots at the Hollywood casino 22 times in a year -- a take of $532,000.
When officers of the Seminole police force gave federal officials evidence of suspicious payouts in the casinos, the tribe's leaders acted promptly. They fired the officers.
Billie brushes aside questions about the integrity of the casinos' managers.
"As far as I know, my percentage of monies has always been coming to the tribe," he says. Moreover, the tribe is taking over management of the casinos, Billie says, which should put the $60-million in management fees in Seminole pockets.
But the Seminoles' gambling future is far from secure. About three-quarters of the tribe's casino revenues, or more than $300-million a year, come from video slot machines that the federal government regards as illegal. Federal prosecutors have gone to court in an effort to get rid of the machines in Tampa and Immokalee.
At the same time, the tribe is facing demands from some members for a greater share of the gambling profits through higher monthly dividends.
Earlier this year, the tribal council voted to boost the dividends to $24,000 a year, even though the tribe's comptroller warned that to do so while the video machine issue is unsettled was "an invitation to financial catastrophe."
After just four months of a higher dividend, tribal leaders decided to reduce it, to $18,000 a year starting in January.
"Our money sometimes is almost like a glass house," Billie says. "You don't know when it's going to drop, so you better be ready to tighten up your belt."
* * *
The rise in the Seminoles' fortunes has been rapid. As recently as 20 years ago, many tribal members still lived in thatched-roof chickee huts. They were the descendants of a few hundred Seminoles who had retreated deep into the Everglades in the mid-1800s after three wars with the U.S. government.
It was a bleak existence. In 1979, Chairman Howard Tommie oversaw a tribal budget of just $400 a member. Federal aid was the main source of revenue.
Tommie had a brainstorm: high-stakes bingo. Here might be a way for the tribe to take care of itself.
Bingo already was legal in Florida, but state law permitted a maximum jackpot of $100. Tommie figured the Seminoles could offer much bigger jackpots because of the status of Indian tribes. They are considered sovereign nations, which means there is little oversight by federal and state government.
The Seminoles became the first tribe in the nation to offer high-stakes gambling when they opened a bingo hall in Hollywood, near Fort Lauderdale, in 1979. Three years later, having survived a legal challenge, the bingo operation expanded to Tampa. The Seminole bingo hall off Interstate 4 opened to overflow crowds lured by a $4,000 super jackpot. Bingo was followed by poker and video slot machines.
Other Indian tribes around the nation quickly cashed in. Today 184 tribes in 28 states have gambling operations that take in $4.5-billion a year.
Of the Seminoles' four casinos in Florida, the Hollywood casino is the biggest money-maker, according to the tribe's budget estimates. Seminole Management Associates (SMA), the private company that financed and built the Hollywood casino, was paid $24.2-million in management fees this year. Another $10-million in fees went to an undisclosed company, according to the tribe's budget projections.
SMA has 32 limited partners scattered across the country. Eugene P. "Butch" Moriarty, one of the original general partners, now owns a $975,000 home in Fairfield, Conn., and a $450,000 condominium in Jupiter. SMA hired Moriarty's brother, James P. "Skip" Weisman, to manage the Hollywood hall.
A different company, Pan American & Associates, was paid an estimated $26-million this year to run the Seminole casinos in Tampa and Immokalee. Pan American is headed by 56-year-old Jim Clare, and he has gained wealth visibly. He owns an $870,000 mansion on Tampa's Bayshore Boulevard and a half-dozen other homes in the Tampa Bay area. He has a stretch limousine and chauffeur at his disposal. In 1994, Clare listed his net worth at $7-million, court records show.
But if any one person personifies what a windfall Seminole gambling has been for some people, it is Howard Tommie.
He stepped down as chairman of the Seminoles in 1979, after signing a deal for a cut of the Hollywood hall's profits. Today he lives in a $950,000 waterfront home in Fort Lauderdale, across an inlet from his ex-wife's $725,000 house. Tommie is receiving a fabulous payout -- $12.5-million as part of the interest he holds in SMA, the long-time manager of the Hollywood hall.
Those millions come from the Seminole Tribal Council's decision last year to pay $60 -million to buy out SMA's contract. The National Indian Gaming Commission, which regulates Indian gambling, had rejected the contract because some SMA shareholders did not pass background checks.
Tommie did not respond to requests from the Times for an interview, but 10 years ago he told the Miami Herald that some people "just think I made myself a sweetheart deal (with SMA). In a way it was, but I don't look at it that way. It was a risk that I thought was worth taking."
It is not apparent what risk Tommie took. He put no money down to get a share of SMA's earnings, according to court documents reviewed by the Times. Yet in 1992 alone, Tommie and his ex-wife received $2.4-million from the Hollywood casino.
"He's really cutting into the tribe's money," said Michael Cox, a Creek Indian who for six years was general counsel of the National Indian Gaming Commission. "This isn't the first tribe where leadership has benefited."
Because the Bureau of Indian Affairs had ruled SMA's contract was invalid, Cox said, the tribe could have simply walked away from the deal. Instead, the tribal council is spending $60-million that might otherwise have gone to tribal members.
Billie dismisses Cox as probably "kissing somebody else's ass -- it wasn't Indians' ass." He says it was important to honor the deal as SMA had taken all the risk and the tribe had benefited greatly.
"I made a commitment," Billie said. "We signed it, and the tribe
started moving ahead.
* * *
The millions of dollars swirling around the management companies and people like Howard Tommie can distort the picture of the economic well-being of Seminoles in general.
It is only in the past three years that the gambling dividend has been large enough to significantly improve the average tribal member's standing. As a result, many are just now emerging from poverty.
A smattering of available statistics give some indication of the lot of the average Seminole.
Unemployment remains high. By the tribe's estimation, it may be 20 percent. Few Seminoles have jobs outside the reservations; 70 to 80 percent are employed in tribal businesses, Billie estimates.
The federal government has pumped millions into tribal housing, improving living conditions but creating developments marked by a bland uniformity and small floor plans.
School dropout rates are high. The tribe boasts that it will pick up the cost of college for any Seminole who wants it, but a study in 1992 reported that only 1 percent of the tribe's youths actually earn a college degree.
Reservation life provides no immunity from the problems of troubled families. The tribe's newspaper reported recently that foster parents were needed for 65 children because of neglect and abuse, among other reasons. That's more than 5 percent of all the tribe's children.
Billie, who has spoken about the struggle of his own children with drugs, calls "contraband abuse" one of the most serious problems facing his tribe.
The paucity of information about the tribe's finances has provoked criticism of Billie's leadership by tribal members at times. Are there unknown millions sitting in tribal coffers that go to pay for such luxuries as the $9-million jet?
Billie says the tribe has only "a little bit" in its reserves and defended the aircraft as being necessary for him and other tribal leaders to travel to reservations around the state. Besides, he said, Marcos' plane has appreciated in value, making it a sound investment.
None of Billie's critics would challenge him publicly when contacted by the Times. Some feared the loss of their dividend checks, others worried that their children's tuition would cease. Billie increased the pressure by offering a $5,000 reward for the names of anyone who gave Times reporters information that he considered classified.
* * *
Some other tribes with gambling operations pay much higher dividends to their members. Florida Attorney General Bob Butterworth points to a couple of these tribes -- the Pequots in Connecticut, the Shakopee Midewankton Sioux in Minnesota -- and wonders why individual Seminoles have not fared as well from gambling. The same goes for casino patrons, he said.
"If they had done it the way some other tribes are doing it now, I believe they could be making a lot of money honestly," Butterworth says. "The people going to the tables would know the games were honest . . . I would have much more of a comfort level."
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