Click here to read the entire Spring 2011 Issue of Casino Lawyer.
Gaming Executive of the Year: Timothy Cope
By David McKee
Slow and steady wins the race. That’s been the saga of Minnesota-based Lakes Entertainment CFO Timothy J. Cope. His patient progress up the ladder of the casino industry and his long-term focus are qualities that make him IGML’s Executive of the Year for 2011.
Born “a long time ago” in Hudson, Wis., Cope has taken a long route back to the Midwest. “I basically grew up in Las Vegas,” says the casino veteran, whose father relocated the Copes when Timothy was 10. His first summer job was as a dishwasher at the El Cortez. After earning a degree in business administration at the University of Nevada-Reno, Cope cut his teeth at a couple of Washoe County casinos. He dealt cards, wrote keno, worked the cage, fixed slot machines and basically did whatever needed doing.
“Wednesday afternoons were my career at that point,” Cope recalls. That wasn’t much of a future, so Cope invested two years in becoming a certified public accountant. (He also owns certification in industrial engineering and computer programming.) The newly minted CPA received a job offer from MGM Grand Reno “almost exactly after my two years were up.” There, he rose to vice president of finance and administration, surviving two changes of ownership, first to Bally’s, then to Hilton Gaming in 1993.
By this point, Cope had been working two decades in the Reno market. He received an offer for a dramatic change of scene from Lyle Berman’s Grand Casinos, headquartered in the Twin Cities area. It meant going from a company that was consolidating to one in expansion mode. Five years after the passage of the Indian Gaming Regulatory Act, Class III tribal casinos were still in their infancy, perceived as rudimentary facilities. That’s an image that Grand would help change.
Grand managed four tribal casinos: two in Minnesota (Grand Mille Lacs and Grand Hinckley) and a pair in Louisiana (Coushatta Casino Resort and the now-Paragon Casino Resort). The Grand brand helped all four raise their profile until they were ready to strike out on their own.
Inevitably, there was some culture shock. “It was a very neophyte-type of industry, just in the grassroots,” Cope says of tribal gaming, which is now a $25 billion per year business. When he arrived in Minnesota, Cope thought the way casino business was done in Nevada “was the only way gaming should operate” and found himself in “an eye-opening situation.”
While Cope could bring his private-sector experience to bear upon streamlining tribal operations, he also learned from his Native American clients, who weren’t hidebound by conventional wisdom—or terminology. “They just called things different. They didn’t know the industry standards, so they thought of their own ways of doing things and sometimes they worked very well.” He describes the tribal casinos as “much more entrepreneurial” in nature, “as opposed to legacy systems like Nevada was used to.”
Tribes also employed more of a retail approach toward marketing their product, at a time when the Nevada-style product was still sold around gambling plain and simple. “Most Native American locations are single-casino operations, so they have to be a little more focused on what helps their particular location,” be it amenities or value, “as opposed to a corporate-wide approach.”
Cope also credits Grand with helping bring outside investment capital to the tribal industry. Grand Mille Lacs and Connecticut’s Foxwoods Resort Casino “were neck-and-neck as to who was the first to obtain third-party financing,” he chuckles. “The proven success of the Grand Casinos-managed properties brought a real level of trust” into the relationship between tribes and the financial industry.
In addition to helping expand the tribal sector, Grand was deeply involved with opening up the Mississippi market, where it eventually owned three casinos (subsequently sold to Hilton Gaming, then to Harrah’s Entertainment). “The challenge there was just ‘Get it open quick,’ ” Cope says of the Bayou State. “It just had to float.”
However, the earliest casinos there had been retrofitted into riverboats and old passenger liners and “were very space-constrained. They were literally riverboats tied up to a dock.” Grand thought “outside the hull,” as it were, becoming the first to use what Cope calls “mega-barges” and thereby jump-starting the move to large-scale casino properties in Mississippi. Grand also steered clear of the ‘90s theming craze. “That worked out well,” Cope opines. “Just a good, clean, upscale casino.
“In those days, it was all new to Mississippi, so there was a large learning curve.” That cut both ways: Wild rice soup, for instance, was a Minnesota staple that couldn’t appeal to Southern palates. “Some of the recipes we thought were Mom’s favorites didn’t go over in Mississippi or Louisiana,” Cope reminisces.
A misstep of a much larger nature was Grand’s takeover of the Stratosphere Casino Hotel & Tower, which Berman took over when developer Bob Stupak’s funds ran low. Its opening was a notorious Vegas financial-disaster story and ended Grand’s Sin City aspirations. As Cope tells it, Grand bought into industry reasoning that, ‘If you build it, they will come.” Instead, they “learned that location is very important,” he recalls with a hard-earned laugh. Grand thought the observation tower was a strong marketing hook, and it was—for the restaurants, rides and sightseeing, “but it didn’t translate into gaming dollars.”
Chastened by the experience, Grand would reinvent itself as Lakes Entertainment and revert to its roots in tribal gaming management. While Cope finds that Wall Street is still somewhat skeptical of Native American casinos, acceptance has risen and the focus is now on metrics such as location and ROI. A well-sited tribal casino, he says, is “more apt” to obtain financing than a private-sector one in a poor location.
Developments that Lakes helped usher to fruition were Sacramento-area Shingle Springs Red Hawk Casino (a half-billion-dollar facility with 2,122 slots and 73 tables) and the $350 million Pokagon Four Winds Casino in New Buffalo, Mich. According to former National Indian Gaming Commission Vice Chairman Tom Foley, this “required extreme patience” of Cope “and the development of innovative strategies to bring the projects online. Tim was the steady hand leader during this process.”
The patience, Cope explains, “had to deal with understanding the inalienable right of Native Americans to have a gaming enterprise.” He’s tried to help other tribes obtain recognition, without success, noting that in order to succeed one must have both land and a compact with the state “and all that takes time.” Both the Shingle Springs and Pokagon bands already had federal status and the former had the acreage, too, while the Pokagon had a court order allowing them to repurchase ancestral territory.
“We just didn’t realize it was going to take so long to open a casino,” Cope reflects, adding that several years were occupied with fighting lawsuits and obtaining regulatory approval. He points to a Lakes project in the San Diego area that still hasn’t been approved, even though Lakes has been laboring on it for a decade.
Unlike some industry leaders who flit from one idea to another, Cope advises a steady course. “Patience is a virtue, but if you know you’re going to be successful, it’s worth the wait.” After all, tribes are “used to waiting for tens and hundreds of years.” Once that casino is open, “it’s theirs forever.”
One realm in which Lakes was a little too far ahead of the curve, Cope thinks, was online poker. He believes Internet poker will be legitimized, first at the state level and then federally, adding that Uncle Sam would be better served by taxing online gambling now “than fighting it forever.”
However, Lakes’ World Poker Tour “put us in an awkward position where we couldn’t be involved in an Internet company that was headquartered offshore,” especially since online play inhabits a legal gray area and is domestically exploitable. “We may get involved again but,” having spun off the WPT, “at this time there are no plans.”
Now living in Golden Valley, Minn., Cope and wife Cathy are enjoying parenthood … and grandparenthood. They have three daughters, Maggie, Molly and Jill, and twin grandsons are expected June, with “three more [grandchildren] on the way.” In the spare time he has, Cope enjoys tennis but doesn’t get to play as much anymore. Of his role at Lakes he says, “It seems like this is my life.”
Click here to read the entire Spring 2011 Issue of Casino Lawyer.
