Seminole's business brings change to Reservation

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by Adrian Saiz
AP Business Writer

The Seminole Tribe of Florida fought the U.S. Army in the 1800s and resisted forced migration to Oklahoma. A century later, they rescued themselves from poverty by becoming the first tribe to venture into the gambling business.

Now is the time for an ambitious new challenge - being the first American Indian tribe to buy a global company.

The Seminoles finished their $965 million purchase of Hard Rock International's restaurants, hotels and related businesses from U.K.-based The Rank Group PLC on March 5. Its 3,300 members are now in the position to add to their already impressive wealth.

But the acquisition also speaks to something deeper, a respect for an ancestry of "unconquered warriors'' whose kin are motivated by history and preserving their culture.

``I don't think the measure of how much money comes in to the tribe is the benchmark,'' tribe Vice Chairman Max Osceola said. ``I think the measurement is what you do with it. Money only buys convenience. It doesn't buy character.''

American Indian Tribes Are Profiting
American Indian tribes are profiting from gambling, and Florida is where it all began.
The Seminoles became the first U.S. tribe to offer high-stakes gambling in 1979, when they opened a bingo hall in Hollywood, Fla.

The bingo hall survived several court challenges, and in 1988, Congress passed the Indian Gaming Regulatory Act, which established federal regulatory authority and standards.

Since then, Indian gaming has greatly expanded. It generated $22.6 billion in revenue in 2005, up 14.6 percent from the previous year, according to the Indian Gaming Industry Report by Alan Meister, an economist with Analysis Group.

Florida's tribes - the Seminoles and the Miccosukee Tribe of Indians - placed sixth among the highest grossing states with more than $1.26 billion in revenue in 2005 - up 36.1 percent from 2004, the study showed.

The Seminoles account for a large chunk of the state's Indian gaming revenue, and 90 percent of their budget comes from gambling. They have seven casinos, including thriving Hard Rock Hotel and Casinos in Hollywood and Tampa.

Indian tribes do not pay corporate income taxes on tribal revenue. But for their Hard Rock deal, the Seminoles created a separate taxpaying corporation to own and manage Hard Rock that's subject to public disclosures.

``Entering the commercial arena would require them to disclose more information that they already do and that's a quantum leap for many tribes,'' said David Katz, gaming and lodging analyst for CIBC World Markets.

The tribe's likeliest move toward expanding Hard Rock will probably be into commercial markets where gambling is allowed, such as Atlantic City, Katz said. And Osceola said other gaming tribes have contacted the Seminoles to see if they can use the Hard Rock name at their facilities.

These moves have the potential to increase the tribe's revenue, which would only mean more prosperity for its members. But where does all that money go?

The Road Cuts A Winding Path
The road cuts a winding path toward the north. Buzzards swoop down and pick at a carcass, forcing cars to swerve onto soft shoulders that give way to canals. Cows graze in the midmorning sun, as white egrets perch on mangroves lining the canals. In the distance stand stately cypress trees, a reminder of the location - Florida's Everglades.

A sign welcomes motorists to the 35,000-acre Big Cypress Seminole Indian Reservation, established in 1936.

The Seminoles spent decades fighting the U.S. Army, and fled south to the Everglades to avoid the forced migration known as the Trail of Tears in 1830. President Tyler ordered the end of military actions against the Seminoles in May 1842, and the tribe never surrendered to the U.S. Army.

The Seminoles settled in the Everglades, and were mired in poverty for decades. Tribal elders recall days when they had to hunt their own food and lived without utilities.