Catawba Indian Nation rolls dice on Kings Mountain casino
The Catawba Indian Nation rolls the dice on a Cleveland County casino project with a hefty potential payout.
A visit to Kings Mountain makes clear that the city of about 11,000 residents takes great pride in its battlefield heritage. City signage, churches and small businesses make references to the historic Revolutionary War victory against British loyalists in 1780. Battleground Road, Battleground Community Church, Battleground Collision — all are reminders of the area’s patriot ghosts.
A different sort of battle waged more recently may lead to a higher profile and new image for the Cleveland County town. Within city boundaries, a chunk of tribal land the size of 12 football fields is being developed into a Las Vegas-style casino and resort. A fenced-in construction area off Exit 5 of Interstate 85 houses a 14,706-square-foot temporary site of Two Kings Casino, which South Carolina’s Catawba Indian Nation wants to expand into a $273 million development.
Several hundred slot machines started ringing July 1 at the makeshift site, while a permanent 56,000-square-foot building is expected to open next year. The full build-out depends on if Two Kings reaches its revenue targets, which initially call for $72 million in revenue in the first year and $150 million within five years. As many as 2,600 people could be on the payroll if the project excels.
The 6,000-year-old Catawba Indian Nation is no stranger to the Kings Mountain area. The Two Kings’ name is a nod to Catawba Chief King Hagler, who reigned from 1750 to 1763, and the city’s longtime friendship with the tribe. The Catawba people fought alongside the patriots in the Revolutionary War.
Located about 50 miles southeast in South Carolina’s York County, the 3,534-member Catawba Indian Nation shows dwindling membership and little prosperity. According to U.S. Census estimates, about 12% of the workforce was unemployed in May, and 21% of people live below the poverty level, much higher than York County’s unemployment rate of 3.4% and poverty rate of 8.6%. Some roads around the 700-acre reservation are in disrepair, several mobile homes have seen better days or appear abandoned, while others remain in well-kept condition.
Catawba Indian Nation Chief Bill Harris says a portion of the tribe’s 1993 landmark agreement with South Carolina impeded the tribe’s growth by placing restrictions on its economic endeavors. He contends the tribe hasn’t benefited from significant economic development since the 17th century, when Catawbas were part of the East Coast trade market.
“In the early days, it was all about trying to survive what was coming from Europe — assimilation means you gave some of yourself away in order to survive,” Harris says. “As we came along further, the government of South Carolina was not very receptive to its indigenous community once it became the powerhouse. If your goal is to conquer somebody and keep them down, you can do that.”
The tribe had total revenue of $9 million in 2019, including $7.2 million from federal grants, and a total fund balance of about $19 million, according to its latest annual report. The money pays for government activities, transportation, education, child care and other functions.
“There truly is no economic growth within the nation,” Harris says. “[Opening the casino] is basically the fulfillment of the 1993 treaty: Being able to provide the economic stability that all communities need, because once you have economic stability, you have the ability to guide your future. Without that, you can make plans, but you’re at the mercy of someone else, or you’re unable to fulfill those plans.”
Catawba leaders kicked off their effort in 2013, applying to take a portion of their land into trust near Kings Mountain in North Carolina. South Carolina wouldn’t let the tribe run a gaming operation because of laws banning most gambling except for bingo, raffles and the state lottery.
Since then, a legal and political battle has played out between the Catawbas and the Eastern Band of Cherokee Indians, a 16,018-member tribe that runs North Carolina’s only casinos in Cherokee and Murphy on the state’s western edge. The Cherokees in July estimated an annual revenue decline of $100 million from the new competition but insist the fight is about much more than money.
Kings Mountain, which once acted as a “buffer zone” between the Catawba and Cherokee tribes before European settlers arrived, is again in the middle of a battle.
About 140 miles west of Kings Mountain, the Cherokees started in 1997 with a video poker business that has expanded into Harrah’s Cherokee Casino Resort, now comprising more than 1,100 hotel rooms and suites, 2,100 slot machines, 160 table games and a new sportsbook venue. In 2015, they opened Harrah’s Cherokee Valley River Casino and Hotel in Murphy, about 57 miles southwest of Cherokee. It has 180 hotel rooms, 700 slot machines and 180 table games. Both properties are managed by Nevada-based gaming giant Caesars Entertainment and employ a combined 3,300 people, representing 10% of Cherokee County’s workforce.
The two casinos averaged about 161,000 trips in March, April and May, with the older Cherokee site making up about two-thirds of the business, says Brian Saunooke, regional vice president of marketing for the Harrah’s Cherokee resort. Revenue distributed to casino owners decreased from $424 million in 2019 to $341 million in 2020.
About 90% of the tribe’s government expenditures are subsidized by the casino and tourism enterprises, according to its 2018 report, so losing ground to a rival close to Charlotte is a troubling prospect. But leaders say that’s not why they’ve been working to block the project. They contend that the 16-acre parcel in Cleveland County is historic Cherokee land ceded to the state of North Carolina by treaty, and the Catawba, who also claim historic land rights, aren’t eligible to offer games across the state line.
“There’s an entire section of federal law that just deals with Indian tribes and Indian gaming,” says Richard Sneed, principal chief of the Eastern Band. “What the Catawba are trying to do is what’s commonly known in Indian country as ‘reservation shopping,’ where a developer comes in and says to a tribe, ‘We’ll foot the bill for everything,’ and the developer gets a percentage of the revenue if they’re successful.”
Criticism of the Cherokees being primarily interested in upholding their monopoly power is unfair, he says. “From a business perspective, any business is concerned about their market share, so I don’t think it’s fair for people to hang their hat on that. It’s way more complex.”
The Cherokee argument initially drew support from more than 100 N.C. state lawmakers of both political parties, who signed a letter in 2013 disapproving of the Catawba casino proposal. Signers included former N.C. House Speaker Thom Tillis and other powerful leaders. The Cherokees also secured opposition from many other key lawmakers such as state Senate President Pro Tem Phil Berger, along with county commissions and city councils.
Those efforts held up the Catawbas’ plans until 2019, when U.S. Sen. Lindsey Graham of South Carolina introduced a bill to bypass the Department of the Interior’s approval and put the site into federal trust. “The Catawba Nation has been treated unfairly by the federal government, and our legislation rights that wrong,” Graham said at the time.
In a surprising shift, Graham’s bill was co-sponsored by his Republican peer Tillis, who was elected to the Senate in 2014. While the Senate never passed the bill, the Interior Department took the land into trust and allowed the casino to move forward. The Cherokees are fighting in court, but in April 2020, U.S. District Judge James Boasberg of the District of Columbia ruled in the Catawbas’ favor.
“First and foremost, [the Cherokee have] not shown that it is likely that Cherokee historical artifacts even exist at the Kings Mountain site,” Boasberg wrote.
In January, Gov. Roy Cooper stamped his approval on a gaming compact by which the state would receive a percentage of the casino’s revenue, estimated at $5 million to $10 million per year, for the right to offer table games. The Catawbas also agreed to form a foundation that will contribute as much as $7.5 million annually to benefit the tribe.
Tillis declined an interview request and hasn’t explained what changed his mind. Cherokee leaders contend that it’s the result of campaign donations from Wallace Cheves of Skyboat Gaming, a Greenville, S.C.-based casino company that partnered with the Catawbas to develop the project. Cheves, who also declined to be interviewed, donated about $77,000 to Tillis’ various campaign committees between 2015 and 2019, according to the N.C. Policy Watch website. By comparison, the Eastern Band gave Tillis about $8,500 between 2014 and 2020, according to OpenSecrets.org, which tracks political donations.
Overall, the power pendulum in Raleigh appears to have shifted from the Cherokees to the Catawbas. Tillis’ successor as House Speaker is Tim Moore, a Kings Mountain lawyer who once did legal work for Skyboat Gaming. He is no longer part of the project and declined comment. Former N.C. Sen. Tom Apodaca of Hendersonville, who once championed Cherokee causes, is a Raleigh lobbyist for Skyboat. So are former Raleigh Mayor Tom Fetzer and Franklin Freeman, a McGuire Woods lawyer who was a top aide to former Gov. Mike Easley.
Berger is a rarity among N.C. leaders in voicing opposition to the Catawba casino, but he downplays his authority. Berger sent objections to federal and state policymakers and offered other public statements, says spokesperson Pat Ryan. “Ultimately, the North Carolina General Assembly does not have the authority for approving or rejecting the casino,” he says.
In March, U.S. Rep. James Clyburn, an influential South Carolina Democrat, introduced a bill to affirm the Interior Department’s decision allowing a Catawba reservation in North Carolina. The Cherokees’ Sneed says the bill shows that congressional representatives “know the decision rendered by the Department of the Interior was incorrect, because if they were so confident it was the right thing to do, they’d allow the appeals process to run its course.”
While the Cherokees press their legal fight, the tribe is expanding its gaming business outside North Carolina. In December, the tribe agreed to buy a casino in Elizabeth, Ind., near Louisville, Ky., from Caesars for $250 million. The transaction is expected to close by the end of the year.
JOBS, JOBS, JOBS
Gaming centers don’t always benefit economic development, as evidenced by Atlantic City, N.J., where nearly 40% live in poverty. Churches and some Kings Mountain residents criticized the Catawba casino plan for years because of concerns about increased crime, gambling addiction, traffic and other problems. The N.C. Family Policy Council and some other groups remain vocal, but much of that dissent has faded.
Local leaders now mostly welcome the project and say that Kings Mountain is devoted to making sure that the impact is positive. The city has invested in various infrastructure projects including an improved downtown streetscape, new water lines and smart electric meters. The city-owned electrical system expects solid business from the casino.
“We’re so lucky this is being developed two or three miles out of town, and I think it will be a situation where we have two city centers instead of one,” says Kings Mountain Mayor Scott Neisler, a staunch casino advocate. “I look forward to the possibility of it growing up into what it can be, and at the same time, we’re planning so we have a clean slate: A place where people really want to come and feel good about being here.”
The new casino jobs may blunt the impact of a recent plant closing. Swiss-based industrial products giant ABB is shuttering its 265-employee Kings Mountain auto-parts plant over the next month. The Catawba casino has already hired about 250 employees after a job fair drew about 800 attendees.
While Cleveland County benefits from its proximity to the Charlotte and Greenville-Spartanburg, S.C., metro areas, it is deemed a Tier 1 economically distressed county under N.C. economic-development guidelines. More than a quarter of its residents were living in poverty as of 2019, according to the U.S. Census Bureau.
More visitor traffic is good news for restaurants, hotels and other retailers. Cheves is planning several hundred apartments, townhomes and single-family houses over the next few years on an 118-acre site near the casino. Local officials expect “additional revenues and capital investments tied to the casino will be quite high,” says Kristin Reese, executive director of the county’s Economic Development Partnership.
Hound’s Drive-In, an outdoor movie theater two miles from the casino, expects its business to eventually double. The three-screen theater is adding 200 recreational vehicle campsites to its existing 60. “Many families have never been to a drive-in theater, so I am hopeful that when they visit the casino, they will also catch a movie and get the full drive-in experience,” owner Preston Brown says.
Making sure the casino has a positive impact is largely up to Buffalo, N.Y.-based Delaware North, hired by the Catawbas and Skyboat to run the business, Neisler says. The company operates 10 U.S. casino venues and reported $1.45 billion in revenue in 2020, down 61% from the previous year because the pandemic slowed the hospitality business, according to The Buffalo News.
Buffalo’s Jacobs family owns Delaware North, which handles concessions at 11 Major League Baseball stadiums and five NHL and NBA arenas. It also operates food services at airports and theme parks including Disney World.
“I have all the trust and confidence Delaware North will run a first-class operation, and that’s something we’re going to be proud of because it will be a resort area, not just a casino,” the mayor says. “Obviously we want growth, but at the same time, we do have people who want Kings Mountain to keep the same charm and quality of life we’ve always had, and that’s something we want to guard.”
NEW GAME IN TOWN
The Two Kings casino will raise North Carolina’s profile in the gaming industry. Beyond the Cherokee sites, other legal gambling channels are the North Carolina Education Lottery, charitable bingo, low-stakes beach bingo and raffles.
How much that profile increases depends on if lawmakers in the ninth-most populous state reverse their historic aversion to gambling. An economic impact statement commissioned by the state-chartered lottery agency last year estimated North Carolina has capacity for nine commercial, non-Native American casinos that could spark more than $2 billion in annual revenue within three years. Those ventures would bring in more than $450 million in annual taxes, assuming the state gets about a fifth of overall revenue. That’s a typical levy in other states.
The report estimated that the Cherokees’ two casinos generate annual revenue of $900 million and pay about $7.3 million per year to the state.
The Cleveland County project could be a lifeboat for the Catawba tribe, which wants to convert its winnings to build schools, buy land, and create businesses and jobs, Harris says. “It’s like two double-hinged doors that are going to be kicked wide open.”
This opportunity is long overdue, he adds. “From the beginning of European contact, the Catawba has always been a good neighbor. And we have proven over and over through history that we are that good neighbor. No matter how many times we were wronged, we kept coming back with an open hand, not a closed fist.” ■