Golden Opportunity

The recent phenomenon of Indian gaming development over the past nine years has created a lucrative niche market for architects, contractors and suppliers.
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Golden Opportunity

Jan 1, 1998 12:00 PM, Andy Pulsipher

The recent phenomenon of Indian gaming development over the past nine yearshas created a lucrative niche market for architects, contractors andsuppliers. Unfortunately, few of these people have positioned themselves toparticipate in the industry that can now be found in 48 of the 50 UnitedStates. This controversial industry has grown from 200-seat bingo halls tocasinos larger than anything in Las Vegas. For years, Indian gaming wastypically housed in a metal building with poor ventilation, substandardlighting and a 20 W sound system. Many of these still exist in rural areas;however, these buildings - and everything inside - are being replaced bystate-of-the-art facilities.

This trend can be directly traced to the legalization of class three gaming(slot machines and house-banked games), which the United States enacted in1988. These games are 10 to 20 times more profitable than the old weekendbingo games that were sometimes lucky to break even. Now, the annual profitof Indian casinos ranges from $1 million to more than $400 million peryear. These casinos may now include fine dining restaurants, bowlingalleys, ice rinks, show lounges, cigar lounges and even entertainmenttheaters to draw new customers into the casino. Because of the location ofthese gaming facilities, factory outlet stores, convenience stores, gasstations and even retail shopping malls are now being clustered aroundcasinos to take advantage of the large volume of traffic.

Because of the enormous economic benefit from casinos, Native Americantribes are primarily interested in creating employment opportunities forits members. Indian hiring preferences are common in the industry, leadingto a preferred status for minority-owned consulting and contracting firms.Although gaming is not considered a cure-all for long-term tribalself-sufficiency, the hundreds of jobs created by ancillary businesses areseen as a means to achieve economic and cultural longevity. These business,usually owned and operated by Native Americans, have fostered thereplacement of welfare checks with paychecks.

To many people, casino development seems to be assuming epidemicproportions. However, two primary factors may limit this trend. First, thegovernment controls that have allowed casinos to exist may also force themto close. Currently, the public opinion is favorable with respect to thegaming industry's growth. Gaming is popular, and the convenience of casinosattracts millions of people every month. As public opinion changes, so maythe government controls that oversee casinos and reservations.

The second factor is market saturation. Growth will continue only as longdemand exists. The relocation of several riverboats and the closing of theHarrah's Casino on New Orleans remain the only casualties in the UnitedStates gaming industry thus far. Most Indian casinos enjoy minimalcompetition, but as more tribes establish themselves, the market willeventually see areas of saturation. The growth of gaming in Nevada isconsidered the barometer of casino growth in the United States, and byrecent observations, it seems safe to say that there is no immediateindication of market saturation.

Demographics and location will still dictate the size of new Indiancasinos, but one thing is certain: Indian casinos will continue to developmajor (and expensive) state-of-the-art facilities, and it is highly likelythat one is coming to a location near you.

The team approach>From an architect's perspective, Indian casino development presents great>opportunities and many challenges. The role of the architect often>includes playing the part of a researcher, developer, construction manager>and tribal liaison. Most Native American clients, as is the case with Las>Vegas casinos, demand accelerated design and building schedules. To meet>these expectations, I usually choose the team building approach, which>assembles professional gaming consultants, designers, contractors,>engineers and casino management (if available) immediately after the tribe>approves the concept drawings. This method allows a quick reaction time>from initial concept to hard budget and, most important, to the>construction phase.

Hand picking the team is critical to the success of team development. It isan educational experience to interview each prospective engineer, designerand contractor. The criteria list I use for selection includes thefollowing:

Size of firm: Does it have adequate capacity to perform on a timely basis?

Experience of the firm: Have there been recent and similar projects, and isthere a strong familiarity with recent technologies?

Availability: Can-the company commit adequate resources when needed?

Computer literacy: Is the company CAD capable, and does it offer Internetaccess?

Personnel: Does the company have team players with knowledge andflexibility and innovative decision-makers with a positive attitude?

Surprisingly, firms with these qualifications are not hard to find.Referrals from other architects, contractors, engineers and even suppliersbring the few qualifying firms to the surface. Often, one or two firms arerepeatedly recommended for each trade, and then it's a matter requestingresumes and conducting personnel interviews. Many times, these firms haveworked together before. This is a bonus, which helps the team gel quicklybecause of existing friendships.

The development team begins with a systems analysis and projected timeline, after which it progresses quickly into construction documents thatare reviewed weekly. Each member of the team is responsible for ensuringthat coordination between the member's trade and others is maintainedthroughout the process. These meetings also allow each trade to have inputat each stage of the design, and they also require each member of the teamto be on schedule with drawings and specs for review by other members ofthe team. The method is neither new nor unique to Indian gaming, but it isthe most time-effective way to accelerate the design of the casino.

An additional benefit is establishing a cost allocation for various systemsboth quickly and accurately. The only thing worse than having equipmenttacked on to the building is not having it in the initial budget. Videowalland surveillance systems are large-ticket items in casinos that will oftenexceed half a million dollars each. With technology advancing so rapidly,the budgets for these items become variables known only to the experts. Thearchitect must rely on his team to provide timely budgeting and designcriteria for both overall project data and distribution to each consultant.The problems associated with this transfer of information are immense. Byestablishing the team early and arranging an agreement as to how thisinformation will be disseminated throughout the process, the architect canmonitor the design process and ensure the RFI log is kept on schedule.

With the input of so many people, the relationships among the team membersimproves the project in many ways. A recent casino project included a 3,000seat auditorium useable for both bingo and entertainment. For this 25,000ft squared (2,323 meter squared) room, specialized theatrical lighting,bingo lighting, videowalls and decorative lighting were integrated throughthis process. The interior designer, acoustics engineer, theatricallighting designer, electrical engineer, electrical contractor and I eachcontributed to the process of integrating the exacting requirements of eachuse. Our efforts resulted in the integration of videowall systems withbingo equipment to achieve a double use for the proposed videowalls, whichbrought about a savings of more than $250,000. The theatrical lightingsystem was modified with alternate presets for the bingo stage, and thecaller was integrated with the theatrical sound system, resulting in asavings of approximately $100,000.

Integrating technologyIn the casino industry, catwalks above the ceiling for surveillance havebeen replaced with video cameras. Modern technology means smaller cameras,sharper zoom lenses and falling prices. Each card table often requires adedicated camera, and for each area where cash is transacted, video camerasare an absolute necessity. The net result is a great number of cameras andliterally miles of cable.

The integration of all of this equipment into the interior design is oftenneglected, leading to exposed cable, surface-mounted cameras and, inessence, a compromised interior design. More important, the risk ofcritical blind spots and lighting glare is much higher if the architect andlighting engineer do not integrate camera installation into the design. Byincluding a video engineer on the design team, these conflicts areanticipated and resolved.

Today's technology is tied to the Internet. The development team of todayis finding that the Internet has become a powerful asset to the teamworkapproach. Aside from gathering information on new products and locating newprojects for bidding, the Internet has become a tool for sharing andcompiling information. Web pages, on-line addresses and bulletin boards areseeing increasingly frequent use. At a development team's recent startupmeeting, communication standards were the topic of discussion. We agreedthat all drawing would be set to D size paper by Autocad v. 12, and a diskwould be provided to each consultant upon request. To assemble the sets forprinting, each consultant would be required to upload each drawing to adesignated bulletin board for downloading and printing by the architect.This permitted consultants from five cities in three different states totransfer current drawings both promptly and economically.

New rolesAs the leader of the design team, the architect must move the design teaminto the construction phase. The emphasis will consequently shift fromdesign and coordination to responding to questions from contractors andmaking adjustments for changes and unforeseen field conditions. As always,time is of the essence. Once construction begins, delays are expensive andshould be avoided at any cost. Keeping the information flowing to thecontractors is often difficult for us right-brained types, who are at bestoften disorganized. For simplicity's sake, all information should be inwritten form and passed through a clearing house (usually one person) withmonitored responses. A single change order will often require responsesfrom several consultants. Without a single person dedicated to monitoringthe response times, the RFI will languish, and the contractor will beunable to continue.

Each design engineer remains an integral member of the development teamuntil construction is complete. Because of this, fees for continued servicethroughout the construction phase are often overlooked and can reduce oreliminate anticipated profit. The services of the design engineer may besubcontracted as part of a design/build contractor, thereby establishing abuffer against the direct expense of construction-related involvement. If alump sum fee is requested, then question the architect about expectationsthroughout the entire project and consider those often missed hours.

Niche marketTen years ago, Indian gaming was not even considered a growth industry.Participation in this niche market, however, has propelled many people intosuccessful careers and pushed many corporations toward tremendous growth.Today, this niche market is a multi-billion dollar industry with no visibleindication of losing momentum. Many design firms, engineers, architects andcontractors have migrated to Nevada to become a part of the growthindustry. Now, the industry has spread throughout 48 states and is growingright in our backyards. The window of opportunity for becoming involved inthe industry is wide open at the moment. If you or your firm is seekingexpansion, diversification or simply a change of pace, Indian gaming maywarrant consideration.

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