The Navajo Nation is getting into the gambling business.
The Window Rock tribe plans to build its first casino in Church Rock, N.M. Construction is expected to begin in April and the casino is slated to open in mid-October, tribal leaders announced Thursday.
To fund the project, the Navajo Nation Gaming Enterprise is expected to receive a USD 35 million loan fronted by the tribe’s Land Acquisition Trust Fund.
Fast track construction is planned where phases are managed and awarded throughout the construction schedule rather than upfront. This allows for faster construction and the opportunity for the enterprise to concentrate on Navajo preferences. To date, all awarded contracts have gone to Navajo vendors or joint ventures.
„We are extremely pleased with this outcome and grateful for the work and vision of the tribe’s resource committee, budget and finance committee and the president’s office support,“ said Bob Winter, interim CEO of Navajo Nation Gaming Enterprise, in a released statement.
The USD 35 million loan is from a fund valued at about USD 60 million, which generates a return of approximately 8 percent on its investment portfolio, officials said.
The loan will be amortized over seven years at a rate of 11 percent, the first year of payments being interest only. Periodic draw downs will occur based on construction phases and casino development costs.
„It’s actually a great strategy for the Navajo Nation. To be able to finance your own development, and earn a higher return on that loan than on existing investment returns,“ said Winter.
Tribal gaming is big business in Arizona. Gross gaming revenue from Arizona’s Indian casinos in 2007 hit USD 1.94 billion, up 8.6 percent from 2006, according to Arizona Department of Gaming. Gross gaming revenue is the difference between gaming wins and losses, before deducting casino operating costs and expenses.
Complying with state laws, tribes contributed USD 92.2 million last year to the Arizona Benefits Fund, which finances education, health care and other programs for Arizona residents. Tribes contributed another USD 11.3 million directly to cities, towns and counties of their choice.
Fifteen tribes in Arizona operate 22 Class III casinos. Class III gaming includes slot machines and similar electronic gaming devices, jackpot poker, blackjack, keno and off-track pari-mutuel betting.
Navajo Nation Budget and Finance Chairman Lorenzo Bates said the move is „history in the making.“