EBCI Holdings, the commercial gaming arm of the Eastern Band of Cherokee Indians, plans to establish a gaming technology incubator and invest between $10 million and $12 million in early stage startup companies.
Scott Barber, EBCI Holdings’ CEO, told the Band’s Tribal Council Thursday the incubator is a way to create a diversified revenue stream for the North Carolina-based tribe.
We’ve looked at over 20 companies, six of which we really like,” Barber said at the Council meeting. “They’re in various stages of Series A and B (funding).”
The commercial gaming company took ownership of its first casino – Caesars Southern Indiana – in September. Because EBCI Holdings is relatively new, it does not have the funding in reserve to establish the account on its own and asked for the funding through the tribe’s endowment and investment accounts.
The Council approved the request, although it was not unanimous. Council Chairman Richard French said he was not opposed to the project, but he wanted more time to understand the request and get answers for the residents he represents. EBCI Holdings presented information to community members earlier in the week, but that session was not broadcast to all community members.
However, Council Member Adam Wachacha said that the tribe needs to listen to its gaming subject-matter experts and understand that private sector investments often happen within a small window. Barber said that some of the funding windows for companies it has identified would be closing within a roughly 30-day period.
The tribe, which own two Harrah’s casinos in western North Carolina, set up the commercial gaming subsidiary last year as it pursued the purchase of the Indiana casino. Tribal leaders said the emergence of new gaming opportunities in North Carolina and the surrounding area required the move in order to generate the income it needs to provide essential services for its members.
“Twofold Relationship” Possible with Some Companies
Barber told Casino.org after the meeting that the fund would allow EBCI Holdings to invest directly into a variety of gaming-related businesses.
As the owner and operator of Caesars Southern Indiana, EBCI Holdings has rights to three mobile sports betting licenses, otherwise known as skins, in Indiana. Currently, it is one of four of the 12 commercial-licensed casinos that do not have at least one mobile wagering partner.
Barber told the Council that a couple of the six companies that have been targeted for investment could eventually become partners and receive skins.
“Not only can we have a business relationship directly with them in the state of Indiana and any other state in the future where there’s gaming that we enter, but also, we have the ability to potentially make early stage investments as well,” he told the Council. “So you could have kind of a twofold relationship to them.”
Indiana currently does not allow online casinos, or iGaming. However, advocates for iGaming have met with Indiana lawmakers ahead of the 2022 session, which starts next month.
While gaming operators would definitely be of interest, it’s possible the venture fund could invest in companies that provide services or new technologies to gaming operators, either online or in a brick-and-mortar setting, too.
EBCI Holdings Considering “Experiential” Sports Bar in Tennessee
The Tribal Council also signed off on another EBCI Holdings project Thursday, giving the company the green light to conduct a feasibility study on a new business concept.
Per the resolution the council approved, the company wants to look at the possibility of operating “an experiential and interactive sports bar concept” in Tennessee. Another EBCI operation currently owns property near Exit 407 off Interstate 40 in eastern Tennessee.
That exit is the primary interchange for tourists traveling to the Gatlinburg area and the Great Smoky Mountains National Park, one of the most popular tourist attractions in the country. The region drew more than 12 million visitors in 2019 and 2020, according to data from the National Park Service.
Tennessee allows sports betting but only through online apps. Barber told the Council that some operators have partnerships with establishments – such as BetMGM with Buffalo Wild Wings – that allow BetMGM users to get special betting opportunities when they visit a BW3s to grab a meal or watch a game.
“There’s a couple different outcomes that we could take this concept, and obviously, it’s a big price tag,” Barber said. “We want to fully vet this out with some market research first.”
EBCI Holdings would likely be able to cover the costs for the study, Barber said. However, because it is a new business concept, it required the company to get the Council’s approval before proceeding.
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