This is the first of a four-part series analyzing the growing local casino industry and its influence on life in the Four Corners region. FARMINGTON — Five casinos will be operating within 65 miles of Farmington next year after the Navajo Nation establishes its third gaming facility on the New Mexico portion of the reservation. The Nation jumped into gaming two years ago with a casino near Church Rock, entering the industry nearly a decade after it was legalized in New Mexico and amid promises of unsurpassed wealth. Its second facility, a Class 2, 120-machine casino, opened in Hogback in October, and the Upper Fruitland Chapter is expected to break ground as early as next month on a Class 3, 750-machine facility. The two newest local casinos come in addition to three existing gaming facilities in Northwest New Mexico and Southwest Colorado. The Upper Fruitland facility, which will include a restaurant and hotel, will be the third casino operating in San Juan County. SunRay Park & Casino, located adjacent to the county fairgrounds on U.S. 64 east of Farmington, opened in April 1999. It is located within 20 miles of both Flowing Water Navajo Casino, in Hogback, and the planned facility in Upper Fruitland, the closest Navajo community to Farmington, located about a mile southwest of city limits. Local patrons also frequent Sky Ute Casino Resort in Ignacio, Colo., and Ute Mountain Casino in Towoac, Colo., both of which offer unique gaming and entertainment experiences such as live music and lodging services. Although the two additional gaming facilities are expected to deliver more entertainment options to Four Corners residents, the Navajo tribe's decision to put two casinos in San Juan County has raised questions of viability and competition. More casinos also means a greater social impact, both positive and negative, county CEO Keith Johns said. Although entertainment venues and an economic boost are needed in the local market, casinos may not provide the needed balance between jobs and social health. Viability and competition Although distinctly Navajo, down to facility names and traditional food served to gaming customers, San Juan County's two new casinos are in direct competition with SunRay Park & Casino and the two Ute casinos in Colorado. More gaming facilities simply means more competition, said Ray Etcitty, general counsel for the Navajo Nation Gaming Enterprise. The Gaming Enterprise, established to oversee regulation of six planned casinos on the 27,000-square-mile reservation, conducted four feasibility studies on potential locations, including the Hogback and Upper Fruitland areas, despite their proximity to existing casinos. "SunRay is competition," Etcitty said. "We're just recapturing the market, taking patrons from the other casinos, the other tribes, and bringing them back." Competition comes not only in patronage, but also in jobs, Etcitty said. With all three Navajo casinos up and running, the gaming enterprise expects to employ nearly 900 workers, with 62 currently employed at Flowing Water Navajo Casino and as many as 400 jobs available at the Upper Fruitland facility. "There is a large group of Navajos who are now able to work in Navajo casinos," Etcitty said. "Many of our workers are coming from other casinos. They left the reservation to go to other casinos, and now they're moving back to work here." SunRay, a privately owned and managed business, operates the second racetrack casino established in the state, said Greg Saunders, executive director of the New Mexico Gaming Control Board. It offers live and simulcast horse racing, as well as 510 gaming machines and a restaurant. San Juan County, in a lease agreement with SunRay Park & Casino, pulls in $2 million per year from the gaming facility. The county went through a competitive bid process more than a decade ago to secure a lease with SunRay, and the enterprise has operated within the county since, Johns said. County commissioners vary in their views of the gaming industry, but all agree that the county's relationship with SunRay is crucial to preserve the $2 million in lease payments and hefty gross receipts taxes. "It would be a tremendous blow to us if SunRay went out of business," Johns said about the county. "It would be very difficult to rent that facility to someone else. We'd like to continue a good relationship with them and we'd like to see them continue to have the best facility they can." SunRay CEO Byron Campbell did not return repeated phone calls seeking comment. Attempts were made over several days to reach Campbell, but he denied multiple requests for interviews. The older SunRay facility is at a disadvantage as Navajo casinos move into the county, Saunders said. The two new casinos are boasting newer equipment, better gaming machines and unique cultural settings. Plans call for 750 machines in the Upper Fruitland facility. The Flowing Water Navajo Casino has 120, and Fire Rock Navajo Casino, located on the historic Route 66 near Gallup, has 742. When all three are operating next year, Navajo casinos in New Mexico will have a total of 1,612 gaming machines. The two local Navajo casinos, especially the larger Upper Fruitland facility, also will compete with the Ute Moutain Casino and the Sky Ute Casino. Located in the shadow of the legendary Sleeping Ute Mountain, the Ute Mountain Casino, Hotel and Resort in Towoac, is the oldest and largest gaming facility in the Four Corners. Sky Ute Casino Resort, a 45,000-square-foot gaming floor in Ignacio, Colo., includes various types of gaming machines and offers luxury hotel rooms, five restaurants and bowling lanes. The Navajo facilities are ahead of much of the gaming industry, exceeding financial projects every quarter, even as other American Indian casinos are losing business and facing devastating debt, said Robert Winter, CEO of the Navajo Nation Gaming Enterprise. Fire Rock Navajo Casino brings in more than $40 million per year in net win per year, according to reports to the state Gaming Control Board. Early projections two years ago forecast $32 million in net win. Net win is defined as the total amount wagered in a casino, minus the amount paid out in prizes, to the state and annual regulatory costs. "We concentrate on customer service," Winter said. "We are keeping pace with trends in the gaming market, constantly changing machines to keep up with what is popular in the industry." Border town benefits The Upper Fruitland casino, scheduled to open by December 2011, is located one mile from Farmington. The city, however, is considering annexing 1,400 acres on Farmington's south side, which would put city limits adjacent to — and across the street from — the casino. The 86-acre plot withdrawn for the Upper Fruitland site is located next to the reservation border, on the south side of Navajo Route 36, and almost visible from N.M. 371. Farmington officials have claimed the proposed annexation has nothing to do with the prospect of developing hotels or other businesses within walking distance of a casino, but the city stands to benefit tremendously from the annexation, former mayor Bill Standley said. The city would not consider annexing the land if the tribe were not building a casino, he said. "The expense to annex will not be worth it without the added business," Standley said. "The infrastructure, the expenses to serve the residents with police, the liability of that being in city limits, we can't afford that." The tribe is aware of Farmington's move to annex as much off-reservation land as possible near the planned casino, but it expects enough business at the gaming facility for both the tribe and the city of Farmington to gain. Upper Fruitland also is eying certification under the Local Governance Act, which would allow it to channel some of the revenue directly into the community. "The city of Farmington is going to benefit from this in terms of sales tax," said LoRenzo Bates, Upper Fruitland delegate to the Navajo Tribal Council. "Farmington knew we were going to put a casino out here; they just didn't know when. ...When the second phase of construction moves in, including a hotel and convention center, there will not be enough room (in) Navajo (amenities) to hold all the people." The Farmington City Council hosted a public meeting last month on the proposed annexation. The Council still is discussing the measure. Farmington also can expect to benefit from jobs created by construction on the Upper Fruitland facility, Etcitty said. The lagging economy has made contractors hungry for jobs, and hundreds of temporary jobs will be created as early as spring once construction begins in Upper Fruitland. The same job climate is expected at the Twin Arrows casino near Flagstaff, Ariz., he said. Available temporary jobs include construction, landscaping and security. "All the construction contractors are calling and they want jobs," Etcitty said. "They all want to bid on the job." An estimated 200-300 temporary jobs will be created on the Upper Fruitland site after ground is broken. More are expected for the Twin Arrows site. Economic development continues after construction is complete, Etcitty said. A casino tends to spur additional development nearby, including restaurants, hotels and shopping venues. "A casino becomes an anchor in the market, and it grows from there," he said. Coming Monday: Navajo tribe ups the ante in casino industry Alysa Landry:
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