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April 26, 2002
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Monthly statements for Red Lake gaming show
financial problems continue to
persist
By Bill Lawrence
According to an internal financial report dated April 1st
and prepared by Gaming Management for the two-month period ending
February 28,
2002, Red Lake Gaming Enterprises reported that it had net income of
$789,335
on total revenues of $5,919,422. Although
the combined January and February net
incomes of $314,778 and
$474,557 respectively were 128% higher than Gaming income reported for
the
first two months of 2001, they were $477,817 or 38% lower than budgeted
by Red
Lake gaming management for those two months.
In addition, despite showing an apparent a profit of
$789,335, the January and February 2002 financial statements do not
reflect
payment of a number of Red Lake Gaming’s financial obligations. The reported net income does not include
expenditures of $356,462 in principle payments on the $28 million River
Road
Motel and Water Park loans, nor required transfers to the tribal
general fund
of $333,580 (two month’s payments at $166,790 per month), nor “other
uses of
cash” (for example, leasing of slot machines and payment of
construction costs)
budgeted at $726,506. These expenditures or payments were listed in Red
Lake
Gaming Management’s 15 months financial projections, which was included
in
their September 2001 Financial Statements. These projections were
reprinted in Press/ON
several times last Fall and Winter.
Red Lake Gaming’s current liabilities (debt) continue to
exceed current assets by a 2 to 1 ratio and remain near the $8 million
level
where they have been for the past six months. Current liabilities are
debts or
other obligations of a business that are normally satisfied or paid
within a
one-year period of their occurrence. Combined
with the $31 million in long term debt for
the construction of
the motel and water park, Red Lake Gaming Enterprises has the Red Lake
band in
debt for over $39 million.
The River Road Casino Motel and Water Park expansion was
opened on May 25, 2001.
Red Lake Gaming Enterprises is an enterprise of the Red Lake
Band of Chippewa Indians and is responsible for managing the Band’s
three
casinos at Red Lake, Thief River Falls and Warroad, Minnesota. |
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