What we learned about Talking Stick Resort

Valley casinos are familiar spots for gambling, dining and concerts. But the public knows very little about them as businesses.

The Arizona Republic pulled back the curtain on one secretive tribal gaming enterprise and found it hasn’t delivered on financial promises to the community.

Residents of the Salt River PimaMaricopa Indian Community provided The Republic with information on the quarterly payouts they receive from the profits at their casinos. An analysis of those payments shows the community’s gaming profits have yet to rebound to pre-2008 levels.

In fiscal year 2018, the gaming enterprise earned an estimated $359 million in net gaming revenues—total earnings after taking out operating expenses and prize money. That’s $15 million below the high-water mark reached in 2007.

This is significant for two reasons. First, community members told The Republic they were promised soaring profits when leaders pitched them on building a new Talking Stick Resort and Casino a decade ago. It was billed as the next big step in tribal gaming. The towering hotel and casino was meant to mimic the success the Las Vegas Strip has had in generating nongaming revenue. Instead, profits are lower than they were before the resort was built.

Second, community members have suffered from that profit decline. The quarterly payments they receive, called per-capita checks, totaled $3,000 less in 2018 than a decade prior.

“We used to make it from per-capita to per-capita,” resident Martin Chiago said of the quarterly checks. “The people out here would pay their bills three months in advance, but (now) it runs out before the month is out.”

The Salt River community declined to address the accuracy of The Republic analysis of the payments received by tribal members. The community also declined to make an official available for an interview.

The Republic’s analysis shows casino profits soared in the early-2000s: Net revenue doubled between 2003 and 2007.

Then the recession hit.

The Republic couldn’t estimate how the casinos performed during that period because the tribal council subsidized per-capita payments with its own funds. By fiscal 2011, when the subsidies ended, net revenues had fallen by $113 million, or 30%.

Since then, profits at the gaming enterprise have slowly increased but remain well below their pre-recession peak.

How does this compare to other Arizona casinos? It’s hard to determine since there is limited comparable data for other tribes.

Gila River, which has a similar percapita program, publishes its quarterly amounts on Facebook. Using that information, The Republic estimated a net gaming revenue of $234 million in fiscal year 2018. That’s $125 million less than Salt River in the same period, but the numbers aren’t perfectly comparable because Gila River subtracts other expenses from net gaming revenue.

The best available figure for comparison is an estimate of gross gaming revenue — not adjusted for costs — published annually by Casino City Press, a publication for industry professionals. It shows the average gaming enterprise in the state had surpassed pre-recession revenue levels by 2011.

Tribal casino financial information isn’t public nor is it typically reported by the tribes except to the state and the federal government. The per-capita checks offer a glimpse into the gaming enterprise’s performance that’s otherwise nearly impossible to get.

Salt River’s revenue allocation plan calls for 35% of net gaming revenues to be divided equally among members, according to a copy of the plan residents provided to The Republic. The other 65% of Salt River’s net gaming revenue is used to fund programs and infrastructure projects.

So, if you have the per-capita amount and the total enrolled member count at the time the dividend was calculated, you can multiply those amounts together and divide by 35% to get the net gaming revenues.

This analysis was limited by the lack of information Salt River makes public.