Two Kings Casino could secure Catawba Nation’s future. Illegal deals stall the dream.
READ MORE
Casino Chaos
After winning a long-shot quest to build a North Carolina casino, Catawba Nation tribe members are frustrated with fumbles delaying its completion.
Expand All
Justin Johnson was sitting on the porch outside his small brick house in Monroe, burning sage and cedar. The drums and chants of tribal music flowed from a stereo, filling the chilly November air.
Johnson was preparing for Yap Yè Iswà — the Day of the Catawba — a festival celebrating his people’s cultural heritage to be held the following day on the Catawba Nation Reservation, some 30 miles southwest of his home.
Johnson was looking forward to fellowship and the connections with a culture far older than the one outside the reservation. But this year, his anticipation was tinged with sadness about what a tribe that has already lost much could see slip from its hands.
The very thing that was supposed to assure the future of the Catawba — a gleaming $273 million casino near Charlotte, with restaurants, entertainment and a hotel — is on hold.
For the Catawba, the right to own and operate a casino means money. It means annual payments of thousands of dollars to each tribal member. It means a new ability to invest in services on the reservation, like housing and roads and social programs.
But that money — promised to pour in from slot machines and sports betting, and eventually table games — represents more. It symbolizes sovereignty, self-determination, survival of a culture.
The initial phase of the Kings Mountain casino, open since the summer of 2021, has already brought millions of dollars to the tribe, according to several Catawba sources. But it remains a fraction of what it was projected to be.
On Dec. 7, the National Indian Gaming Commission announced that business agreements between the tribe and the company hired to develop the casino were in violation of federal law.
Until the tribe gets its contracts with Sky Boat Partners, LLC in compliance with the Indian Gaming Regulatory Act, it could face hefty daily fines and, potentially, temporary closure of the casino. It can’t start building the full casino until these issues are resolved, leaving tens of millions of dollars on its unfinished floor.
For Johnson and other tribal members, the delay, plus the possibility — however small — that regulators could shut down the gaming operation is a real threat to the tribe’s livelihood.
“It’s got us in such a bind,” Johnson said about the NIGC violation. “It could essentially shut us down.
“That would be catastrophic.”
Tribal upheaval
The Catawba Indian Nation is the only federally recognized Indian tribe in South Carolina, with a population of more than 3,000 members. Just over 1,000 people live on reservation land outside of Rock Hill, according to the latest U.S. Census Bureau count.
The tribe landed permission to open a casino in North Carolina in 2020, after years of political moving and shaking. Leaders promised an alluring Kings Mountain casino complex that was expected to be under construction by now.
Instead, Two Kings Casino is hundreds of glowing slot machines and electronic table games packed into a massive metal modular unit in a parking lot off Interstate 85. No entertainment options outside of gambling stand within. Rather than high-end restaurants, there’s a snack bar.
After the NIGC announced that Two Kings Casino was in violation of the law, the tribe was in “mass hysteria,” said Brent Watts, a tribal member and vocal critic of Catawba leadership.
Part of the reason for the uproar was that tribal leaders for months had been assuring members that everything was fine with the casino and things were progressing normally.
In an August letter after the federal investigation was first made public, the tribal government said the NIGC was conducting a “standard review” and that “we are committed to full compliance with Federal and Catawba gaming law.”
In reality, the NIGC had informed tribal leadership months before that its casino contracts with Sky Boat were likely illegal and that if they were not brought into compliance, the agency would act.
These violations “may result in the issuance of a notice of violation, a civil fine assessment, and/or an order of temporary closure to the Nation and Sky Boat as the manager of the Tribe’s gaming,” Tom Cunningham, the NIGC’s chief compliance officer, wrote in March.
Tribal leaders knew about the potential violations for even longer
In a July 2021 “letter of concern,” Cunningham wrote that the gaming commission “has identified several provisions within the agreements that explicitly or implicitly allow the third parties to manage the Nation’s gaming operations and that grant a proprietary interest to third parties,” both of which are against the Indian Gaming Regulatory Act.
Now the tribe and Sky Boat face fines up to $57,527 per day for each violation and the Two Kings Casino as well as temporary closure order.
“We do not take this enforcement action lightly, but do so to preserve the integrity of the industry and protect the valuable tool Indian Gaming represents for many Tribes,” NIGC Chairman E. Sequoyah Simermeyer said in a statement announcing the violation.
Dissent despite assurances
After The Charlotte Observer revealed the gaming commission’s serious concerns in November, Chief Bill Harris released a written statement.
“The Catawba Nation continues to work closely with the National Indian Gaming Commission on its review of our casino resort project and necessary agreements, and we are working to follow its recommendations as required, ” it read.
By then tribe members were expressing frustration with a lack of information about the casino’s progress for months. Some members posted pointed questions on a Facebook group for the tribe’s Executive Committee. There’s also been a push to pick new leaders in next July’s tribal election.
Joyce Oswald noted there that she’d written the federal gaming commission earlier this year asking for information about its investigation because, she said, Catawba leaders weren’t forthcoming.
“If the EC committee was as transparent maybe tribal members would not be looking at other avenues to find information out!!!” Oswald wrote in a comment on the Facebook page.
Harris has said as recently as last month that he will not seek reelection in July.
Brian Harris, a fellow Catawba who is not closely related to the current chief, wants the job. The Alabama resident, a logistics manager for a local forestry company, says tribe members have lost faith in current leaders.
Tribal members need the casino, Brian Harris said. “We have upwards of 17% poverty on the reservation. We have people that are living in derelict conditions.”
After the NIGC violation was handed down, Brian Harris and others asked tribal leadership for an emergency meeting to discuss the issues raised by the casino regulators.
In an email obtained by the Observer, Chief Bill Harris wrote to members saying that the executive committee needed time to review the NIGC violation. And that group discussion about the investigation could wait until a previously scheduled meeting of the General Council in January.
“We just received this letter late Tuesday, so in order to be able to accurately report back to the General Council regarding the letter, we need to do our due diligence as well,” Chief Harris wrote.
Brian Harris expects more than a conversation at that January meeting. He and others plan to take action they say could prevent tribal leadership from making casino-related decisions until new leaders are elected in July.
“Man, it’s just egregious,” Harris said after the NIGC found the tribe in violation of federal law. “We’ve given them the benefit of the doubt, but that’s over.
Business connections, a probe
Questions raised by the NIGC investigation are not the only concerns surrounding Two Kings Casino. Opaque ties to local and national political figures have brought scrutiny, as well.
The Observer has reported that two former Cleveland County officials own stakes in a company called Kings Mountain Equipment Supply, which leases slot machines to the casino.
Former Cleveland County Commissioner Eddie Holbrook and David Dear, ex-Cleveland County manager, held small stakes in the company, but also had other connections to the casino and its players.
Dear has been involved in two marijuana companies tied to Cheves, the owner of casino development company Sky Boat, while Holbrook is connected with at least two other companies that have been involved in the land deals surrounding the casino, including one related to Cheves.
Not just local influencers were positioned to get a cut of the Catawba casino.
John Clyburn, brother of U.S. Rep. Jim Clyburn, and Michael Haley, husband of former South Carolina Gov. Nikki Haley, also had financial stakes in Kings Mountain Equipment Supply, The Wall Street Journal reported this summer.
Butch Bowers, an attorney who has represented former President Donald Trump and former Gov. Haley; and Patti Solis Doyle, a former campaign manager to both Joe Biden and Hillary Clinton had stakes in the slot machine leasing company too, the Journal reported.
Precious jackpot in peril?
The NIGC violation is the latest setback for a tribe that, like all U.S. Indian tribes, has a history full of them.
Spanish explorers found an estimated 15,000 to 25,000 Catawba when they arrived hundreds of years ago in the Piedmont of what is now North Carolina and South Carolina, according to the tribe’s own history. But those numbers soon dropped dramatically.
A 1759 outbreak of smallpox decimated the population, bringing it down to about 1,000 people. By the 19th century, the number of tribe members had fallen below 100 people.
In 1959, the tribe lost its federal recognition, which it didn’t win back until a 1993 settlement passed by Congress that returned federal recognition and gave the tribe $50 million in exchange for the tribe dropping claims to land in York County.
That history helps explain why the casino is seen as crucial to the Catawba people. And why losing it would be devastating.
Steven Light, a University of North Dakota professor who is an expert on tribal gaming, said it’s tough to overstate the impact a casino can have on a tribe.
“Tribal gaming has had the most impact on tribal communities and reservation communities and American Indians of anything in the contemporary era,” he said. “It has had an almost unquantifiable impact on tribes and reservation quality of life.”
Casino profits are required to be used to benefit the tribe, in the form of direct payments, but also capital projects and investments in tribal programs. Already, benefits from the casino are touching people on the reservation and across Catawba Nation.
Each adult tribal member expects to get a check of around $5,000 this year, according to multiple tribal members, their cut of annual casino proceeds. Some contend that’s not as much as they should be getting from a casino several members say is hauling in around $30 million every month. Tribal leaders would not disclose the casino’s revenue to The Observer.
Still, potholes on reservation streets are being filled and social programs there, like Head Start, are improving because of casino revenues, Johnson said. And if the full casino gets built, the tribe will see even more benefits.
“A casino is a license to print money, isn’t it?” said Watts. “We see sovereignty. We see the ability to provide everything we need. Housing, health care, jobs. Everything a nation needs.”
Light, the tribal gambling expert, said Indian communities that have casinos have higher income levels and lower poverty rates. Gaming revenue can create jobs and pay for things people take for granted, like law enforcement, fire departments and utilities. It can also fund cultural preservation programs, he said.
Tribal gambling has grown to a more than $32 billion industry in the United States, according to a 2018 report from the American Gaming Association. In North Carolina, tribal gaming generated $1.8 billion in 2016, before Two Kings Casino opened.
But for Johnson, the Union County resident, and other tribal members, the NIGC violation and the possibility of the casino temporarily getting shut down has put a cloud over those benefits.
“If this casino was to go away, it would all disappear,” said Johnson, who treasures the opportunity to preserve Catawba traditions along with other vital benefits more income will bring. “It’s the scariest thing I’ve ever been through.”
Johnson, who grew up on the reservation, has a granddaughter who is about a year old. When he thinks about Two Kings Casino, he’s thinking about her future, as well as the future of his people.
“I’m fighting for her. I want her to have stuff I didn’t,” he said. “I want her to live on the reservation without fear. I want her to know our culture and to teach it going forward so we’re here another 100 years.
“I want to keep our tradition alive. Without our culture, then who are we? We’re nobody.”
This story was originally published December 15, 2022 at 6:00 AM with the headline "Two Kings Casino could secure Catawba Nation’s future. Illegal deals stall the dream.."
