Casinos cash in on more than gaming
Two local tribal casinos building hotels
by Hilary Parker

Flashing lights, the cacophony of slot machines and old-timers gathered around the craps table greet visitors to the Silver Reef Casino in Ferndale. In the unlikely event you were to fall asleep in our easy chair and wake up at the Silver Reef, chances are you would think you’d woken up in Nevada.
Director of Marketing for the casino, Eric Larsen, says it’s a typical observation: “People tell us we’re a lot like Vegas, only more intimate.”
The Silver Reef, owned by the Lummi Nation, is one of four tribal casinos in Whatcom and Skagit counties. The Nooksack River Casino in Deming, the Skagit Casino Resort in Bow and the Swinomish Northern Lights casino near Anacortes round out the field.
The attraction for many is that Vegas feel without the travel. From great entertainment, to affordable food and premium gaming, these area casinos offer the core elements found in any big name casino, plus something the big guys can’t offer – personalized customer service.

Building customer loyalty one handshake at a time
Customer service is critically important to retaining market share, says Larsen, who’s been with the Silver Reef since shortly before its opening in April 2002.
“The one thing we work hard on is customer service,” Larsen said. The casino’s internal campaign “Going for Great: Every Guest, Every Time” gets to the heart that commitment.
In turn, that “great” attention to their guests has paid back in spades as the casino is in the midst of its second expansion since opening four years ago.
Nooksack River Casino’s Brian Zappettini similarly finds customer service is key to his business. , Zappettini, the casino’s marketing manager, says knowing the customer is where the Nooksack, the smallest of the four area casinos, shines.
“When you have a smaller customer base you can reach that customer base more effectively,” he says. With a low customer-to-staff ratio, it’s easy to get out on the casino floor and shake hands and listen to customer needs.
Zappettini estimates casino employees know “85 percent to 95 percent of our customer base on a first-name basis” – something he thinks the area’s bigger Vegas-style casinos can’t do.
While every year is showing a steady increase in the Nooksack’s customer base, Zappettini says it’s a double-edged sword. “We don’t really want to grow size-wise too much,” he says, lest they lose that ability to connect with their customers.
Larsen agrees that being out on the floor making connections really does make a difference, and he finds that their Diamond Dividend card, which tracks customer activity, is a powerful tool in providing great customer service. Employees can be prompted to remember regular patrons names and favorite games from accessing the information supplied by the card.
The customer “loyalty card” technology employed by the gaming industry is the same customer tracking technology used by your local grocery store. In fact, tracking customer profiles with the use of a “member card” started in the gaming industry.
Technology drives much of the innovation in the gaming industry, says Zappettini. Traditionally, he adds, it’s been a challenge for Washington state’s casinos to keep current with gaming technology due to the state’s strict gaming regulations, often requiring casinos to “hold off on technology until it becomes passé.”

Growing pains & growing gains
Before 1999 gaming technology was merely a hypothetical for the state’s tribal casinos. Prior to that time, what the public thinks of as slot machines were not allowed in the state. The tribes saw the state’s lack of willingness to negotiate as a lack of good faith. In 1994 the state and tribes entered into a consensual lawsuit referred to as the “friendly lawsuit,” giving the federal court the deciding voice on what types of gaming devices were permitted under state law.
The court issued its decision in 1997, ruling that the state did not have to allow traditional slot machines, but other gambling devices were subject to negotiation. (One main difference here is players don’t insert coins in to the machine.) The result was a boon for the state’s tribal casinos, which operate a total of 18,631 gaming machines today.
Case in point, Northern Lights Casino General Manager Brian Wilbur said the Swinomish Tribe’s casino, which opened in 1995, has made a profit every year since electronic gaming machines came on line.
“On the whole you see the gaming industry growing, especially the tribal casinos,” notes the Silver Reef’s Larsen.
In a February 2005 report on the NPR program “Day to Day,” it was reported that tribal casinos made more than $18 billion in 2004. That’s twice what all the casinos in Nevada made in 2004.
The four area casinos are a fraction of the tribal casinos around the state. Currently 20 tribes operate 24 casinos. While the casinos are privately held and do not report their revenue to the state, the Washington State Gambling Commission estimates in 2005 the tribal casinos took in $1.02 billion in net receipts, which is defined as wagers minus prizes. That’s the largest slice of the pie (61 percent) for the state’s gaming industry, which took in a total of $1.695 billion in net receipts in 2005. Card rooms came in a distant second with net receipts totaling $302.6 million (19 percent).

Who’s playing?
Located off Highway 20 on the way to Anacortes, the Northern Lights draws the majority of patrons from nearby. Most of the Northern Lights’ customers are local, says Wilbur, coming from Oak Harbor, Anacortes, Burlington and Mount Vernon. The casino also draws patrons from further south, including Marysville, Everett and Stanwood.
When the Tulalip Casino in Marysville opened Northern Lights operators feared it would draw from their customer base, but after the curious checked out the new casino, it was back to business as usual, Wilbur said.
“Our customer visits have stayed pretty consistent.”
The casino also sees some business from Canada, especially for bingo, but the other three casinos to the north tend to draw the Canadian gamblers, he said.
Closest to the Canadian border, the Nooksack River casino sees a number Canadian patrons. “A very good portion of people come down from Canada, however we claim to be more of a casino for the local Bellingham area,” said Zappattini.
Larsen estimates 50 percent to 60 percent of the Silver Reef casino’s guests are locals, with visitors from across the border in British Columbia making up a healthy percentage of the tourists who visit.
“We have a lot of ‘daytrippers,’ if you will,” he says – the casino sees buses daily from Canada.
And Larsen sees casinos in Canada as the Silver Reef’s biggest competition. For example the newly opened River Rock Casino Resort just over the border in Richmond, B.C., is a huge establishment offering a 70,000-square-foot casino with 1,000 slot machines, a 220-room hotel, spa and marina.
Until recently, the Canadians didn’t see the value in the casinos, but that’s since changed explains Larsen. “Now they really see them as a revenue opportunity.”

Becoming a destination
To combat the encroaching Canadian market, the Silver Reef is looking to cement its reputation as a destination. Along with its established gaming, entertainment, fine dining and banquet room, the Silver Reef is adding a 105-room hotel with additional conference space and a spa.
“We hope to blend our amenities,” explains Larsen.
And having done the market research, casino management and the tribe believe there’s a place for their expansion. “The closer we get to completion the more we hear the buzz,” says Larsen of the hotel.
The $24.5 million project is the third phase of the Silver Reef’s growth. Once completed, Larsen estimates it will bring their number of employees from its current 400 to 475.
To cash in on that destination status, the Northern Lights is building a hotel as well.
The Northern Lights expansion will break ground on Feb. 15, Wilbur said. The project, to be built in phases, will start with condos, followed by a 125-room hotel and water park. Following that, there are plans to expand the casino in the direction of the hotel with the addition of a convention center.
Future plans may also include adding a new bingo hall/multipurpose room. This would free up the current bingo hall to become a nonsmoking casino.
The timeline for all these projects to be completed is about three years, Wilbur said, adding, “We’re really excited.”
The tribe also owns land south of the casino that is slated for future development. Those businesses will “help generate traffic down to this area,” Wilbur said.
The Swinomish tribe already has an RV park within walking distance of the hotel that has proved to be a popular choice for destination travelers. June through August is the busiest time for the casino, thanks in part to the RV park. “It’s helped us bring in a lot of people,” Wilbur said.
With the addition of the hotel he expects to expand on that success. “Hopefully we’ll be drawing from further away than we are now.”
As the area’s casinos build on a solid base, they appear to be preparing to cash in on the same trend as local developers, a growing population.
Both Wilbur and Larsen attribute their casinos’ success in part to population growth in the counties.
“There’s definitely a lot of potential here,” said Wilbur.