At The Last Frontier, the receipts had been edging slightly upward from 2013 through 2017, and the same applied to The Palace. Both likely were helped by the closure of Chips Casino and of the New Phoenix Casino.
This year’s figures are not yet available through the Washington State Gambling Commission. But a Nov. 28 report provided to the La Center City Council says gross revenue at both of the surviving cardrooms through September are down 17 percent from the same period last year and are down 22 percent compared with 2016. For the nine-month span, the two cardrooms combined took in about $15 million this year, $18 million in 2017, and $19.3 million in 2016.
With the background hum of five poker tables and 10 other gaming tables, Michael Holt, chief brand officer of The Last Frontier, explains the variety of games taking place on the gaming room floor, which is about the size of a basketball court. The room, with 25-foot high walls, has a cocktail lounge and a family-friendly dining room on the fringe. By contrast, ilani has 75 gaming tables, 2,500 slot machines, 10 restaurants and three retail stores.
But Holt’s game plan is focused on what’s in front of him, not down the road. He repeated much of what he ebulliently described in an earlier phone interview.
“We focus on our vision and mission,” he said, describing how The Last Frontier and its 200 employees distinguishes their business to customers from ilani. “We believe every guest who comes to our casino should be important and appreciated.”
Holt, 52, has spent much of his adult life in the gaming industry. Part of his childhood, too.
He often recounts a scene in interviews as well as appearances on the casino’s YouTube channel, “Because You Love Cards.” In that memory, he’s standing outside the Frontier cardroom in downtown Vancouver, selling candy benefitting the Hazel Dell Little League. Inside, his mother, Sue Boyd, supervised and oversaw five poker tables. The Frontier cardroom operated from 1974 to 1984 before the Vancouver City Council voted to ban cardrooms in the city and paving the way for their arrival in La Center.
Later, mother and son would work together at The Last Frontier. Holt held several jobs, rising through the ranks from part-time blackjack dealer, to assistant gaming manager, and general manager until his appointment as chief brand officer in 2015.
George Teeny, a former professional card player, is the long-time owner of The Last Frontier. Co-owner Sam Magno died in 1994 after a motorcycle crash. Both men also owned The New Phoenix in La Center. That cardroom, which shares a parking lot with The Last Frontier, closed in March 2017, about a month before ilani opened.
Steven Michels, owner of Michels Development in Lakewood, owns Palace Casino. It received its gambling license in September 1997, nearly a decade after The Last Frontier. Also in September 1997, a license was issued for Chips Casino — also owned by Michels Development, which closed in January 2014. Chips shares a parking lot with Palace.
The four cardroom buildings are arrayed at the same roundabout intersection and it’s not known what future uses are planned for the vacant buildings, La Center Mayor Greg Thornton said.
The only sure thing is that gambling tax revenue has been on a downward slope, especially this year, city leaders heard in late November.
As a result, they took a step that may have been unthinkable before ilani’s arrival.
A new arrangement
On Nov. 28, the La Center City Council approved an Alternative Tax Agreement.
Traditionally, La Center taxed 10 percent of the cardrooms’ gross receipts, which accounted for about three-quarters of the city’s operating budget.
But with the cardrooms’ futures uncertain, the council’s Alternative Tax Agreement ranges from 5 percent to 15 percent on gross revenues, allowing the city to collect a higher tax when times are good and less at other times. Based on cardrooms’ revenue this year, the effective tax rate is 6.32 percent.
October’s revenue from the casinos was better than September’s and Thornton said, “It appears that it’s stabilizing. It’s maybe a little premature to say we’re out of the woods. But right now it appears to be doing OK.”
Thornton said he was uncertain of the details of what revenue, if any, the city could expect from ilani. In the Cowlitz Tribe’s gambling compact with the state, the tribe promised to make “community contributions” from ilani revenue.
A spokeswoman for the state Gambling Commission said the first payment for a newly opened casino is based on first-year revenue. The state would likely not verify the amount until at least mid-2019, she said.
Meanwhile, cardrooms should not look for any help in Olympia from next year’s legislative session, said Delores Chiechi, executive director of the Recreational Gaming Association of Washington, the lobbying group for cardroom operators.
State lawmakers authorized cardrooms in 1997, limiting the mini-casinos to 15 tables apiece for games like blackjack, Texas Hold ’em and pai gow. They can’t offer slot machines, while tribal casinos can.
Revenue has been in steady decline statewide since 2005, mostly because of the proliferation of tribal casinos but also, the industry contends, the increase in the hourly minimum wage, a smoking ban that applies to cardrooms and not tribal casinos, and increases in the business and occupation tax.
Chiechi said last week it’s unlikely that her more than decadelong effort to bring electronic games to cardrooms will be successful. It’s possible sports betting will be allowed in the state.
“Whether or not that helps our industry remains to be determined,” she said. “The temperature and climate in Olympia is not to our benefit.”
Holt is optimistic about The Last Frontier’s chances.
New hires learn they are working at a cardroom that strives to be the state’s model in the casino industry, he said.
Employees dress conservatively and not provocatively, with a white shirt, black tie and black slacks as the typical uniform. They keep an eye on excessive drinking and know when to cut off a customer.
And they take seriously their responsibility to spot problem gamblers.
“We’re not outside people who came in to run gaming,” he said. “We’re just ordinary people.”
Will that be enough to survive? Holt certainly thinks so.
“I’ve never felt it was the end, ever,” Holt said. “After being here for so long, it seemed we would survive.”
