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Spirit Mountain likes its odds against casino rivals

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Spirit Mountain likes its odds against casino rivals

Spirit Mountain managers concede the arrival of a glittering new rival underscored the casino's distance from Portland, the big city that helps feed its hundreds of slot machines.

The rural Polk County casino is 60 miles southwest of the state's population center while the Ilani -- which opened late last month near Ridgefield, Washington -- is less than half that distance. That metric is one reason the Confederated Tribes of Grand Ronde, Spirit Mountain's owner, projected the Ilani would siphon off as much as $100 million, or 41 percent, of its gross annual revenue.

But Spirit Mountain General Manager Stan Dillon likes to point out that the 22-year-old casino is still the closest gaming hub in terms of driving time for those who live in the south end of the metro area or near Salem. And being close-in to Portland is not without its drawbacks, he says, such as the chronic traffic congestion at both Columbia River bridges that he contends offsets the longer distance to Spirit Mountain.

To Dillon, the fight for customers will come down to what each has to offer. "I think it's going to be based on drive time and value," he said. "Where do they think they are getting a better value?"

'Vegas-style' slot machines

It's too early to assess whether Spirit Mountain is losing customers – the impact has been "very minimal so far" Dillon says – but that doesn't mean it hasn't taken Ilani countermeasures. The casino, for example, updated its gaming floor and sports bar last year. It also has taken to highlighting its rival's growing pains in marketing materials.

The 8-mile traffic jam on the Ilani's opening day made headlines, but less noticed by the news media were problems inside the casino. Many visitors turned to social media to complain about smoky air in non-smoking sections, valet parking charges, the lack of a buffet, and the absence of free soft drink stations. 

By comparison, Spirit Mountain's vast gaming area has separate smoking and non-smoking rooms, each brightly lit by layers of light fixtures that can change colors to reflect a theme.  Its Cedar Plank buffet is billed as the largest in Oregon, and Dillon says the $10.95 lunch and $19.95 dinner are big draws. The casino also has an events center that can seat more than 2,000 people. A comparable entertainment venue is still months away at the Ilani.

But Spirit Mountain's ace in the hole, so to speak, is its "Vegas-style" slot machines, which use a random number generator to hatch the winning combination. That system means each spin provides the same chance at winning a jackpot. By contrast, due to Washington state law, the Ilani casino uses a scratch ticket/pull tab system in which a central computer system distributes pre-determined wins and losses.

The tribe also believes its deep Oregon ties -- through charitable giving, community projects and sponsorships of the Portland Trail Blazers, Oregon Ducks, Oregon State Beavers and the Rose Festival's Grand Floral Parade – are points in its favor.

"I'm amazed at the remarkable pride and loyalty people in Oregon have for their state," said Shawna Ridgebear, Spirit Mountain's marketing director.  When she came here from Nevada in 2015, Ridgebear said, "I couldn't believe there was a store called 'Made in Oregon.'"

Mostly, Spirit Mountain focuses on its function as a social gathering place. "A getaway – that's what a casino is," Dillon said.

Challenges remain

Still, no one underestimates the challenges ahead for the Oregon casino.

"It's going to be tough for Spirit Mountain. I don't see any two ways around it," said Robert Whelan, a project manager for the ECONorthwest consulting firm who specializes in tribal gaming issues. "There is a certain amount of money people spend on gambling and it doesn't vary much from year to year." 

In 2013, Oregon tribal casinos generated $477 million in gaming revenue, according to the most recent report by ECONorthwest for the Oregon Tribal Gaming Alliance.

Plus the Ilani already is picking up steam. It's meeting expectations on visitor counts, according to Kara Fox-LaRose, the casino's president and general manager. Plus her team has addressed a number of customer complaints, improving traffic management, fixing broken machines, and establishing clearer boundaries within the casino between smoking and non-smoking areas.

The $4 valet parking fee is waived for VIPs. Soft drinks are free from servers, rather than from drink stations, Fox-LaRose says, because of the Ilani's focus on customer service. And in response to strong customer interest, some Ilani restaurants will soon be offering buffets at least part of the time.

Fox-LaRose sees Ilani as a draw for day trippers within a 60- to 90-mile radius. "We offer an experience that is unique to the market," she said. "When I go on the weekends and see people having a good time, that's what we're here for."

Unseen advantage

Justin Martin, lobbyist for the Grand Ronde tribe and a tribal member, said it will take at least a year to measure the Ilani's effect on Spirit Mountain.

"We are cautiously optimistic that the impacts aren't going to be as big as predicted," Martin said. "We deliver a very solid entertainment experience. We hope Oregonians want to stay here."

Spirit Mountain has a large unseen advantage over Ilani. The casino is nearly debt free, and it's built an endowment that will continue to support tribal activities even if casino revenues decline.

"Our strongest economic engine beyond Spirit Mountain is our investments," Martin said. The Cowlitz Tribe borrowed heavily for its $510 million casino, which it operates in partnership with the Mohegan Tribe of Connecticut.

The Ilani poses challenges for other gaming venues. Two of the four card rooms in nearby La Center, Washington, for example, have folded.

On a larger scale, Oregon's Office of Economic Analysis forecasts the state could lose $110 million in video lottery sales, drying up $72 million in lottery contributions to state government.

The Oregon Lottery is waiting to see how it all plays out. The lottery currently has 11,855 video lottery terminals, compared with 7,796 in all Oregon tribal casinos, and the projected potential loss would amount to 12 percent of total lottery revenue.

"We're not seeing any appreciable variance right now but it looks like the (Ilani) casino is still getting its sea legs," said Joanie Stevens-Schwenger, the lottery's corporate communications manager. "We'll have to see what happens. "

Meanwhile, the Confederated Tribes of Siletz Indians, which operates Chinook Winds casino in Lincoln City, recently floated the idea of an intertribal casino in Salem that could benefit all nine Oregon tribes if they chose to participate. The Grand Ronde quickly announced its opposition to the project, which would require the approval of Gov. Kate Brown.

Martin, the Grand Ronde spokesman, said a Salem casino would be devastating for Spirit Mountain. "Economically that doesn't work for us," he said. Delores Pigsley, the Siletz tribal chairman, said in a statement the Siletz were continuing to discuss the intertribal casino proposal with the Grand Ronde tribe and would keep pushing forward with the project.

 --Gordon Oliver
Special to The Oregonian/OregonLive

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