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A conversation with John Fontana, president of Hard Rock Tampa

John3.2008TAMPA — John Fontana, president of Seminole Hard Rock Hotel & Casino Tampa, oversees the day-to-day operations of the world’s sixth-largest casino and a 12-story, 246-room hotel. With more than 3,300 team members, the fifth-largest employer in the Tampa Bay area had a $592 million economic impact on the region in 2013.

Fontana has worked for the Seminole Tribe of Florida for 34 years and has been involved with Tribal gaming pursuits most of that time. As general manager of the original Seminole Casino Tampa, the Florida State University graduate coupled his financial training and management acumen with a unique experience to help transform a few rough acres around an abandoned J.M. Fields store into the award-winning Hard Rock Tampa, one of the most profitable casino in the United States.

 Fontana’s career in Indian gaming includes stints as a consultant on the opening teams for the initial facilities built for the Sycuan Casino in El Cajon, Calif., and Little Six Casino in Prior Lake, Minn. Fontana also serves on the board for the Florida Council for Compulsive Gambling.

Fontana is the son of Jean Fontana, who worked myriad jobs during her 40 years as a valued Seminole Tribal government employee, including assistant controller, risk manager and Human Resources Department director for the Seminole Tribe of Florida. John Fontana’s brother, Vincent, is a storage manager for the Seminole Tribe Accounting Department in Hollywood.

Hard Rock Tampa recently held a celebration in honor of its 10th anniversary.

PG: In your wildest dreams, growing up and trying to figure out what you’re going to do, did this kind of a life ever cross your mind?

JF: No. As a kid, I was never one of those kids that was, you know, this is what I want to do, this is what I want to be. So when I really started thinking about a career and got to college, I used to tell people all the time, even two or three years after I started working at the bingo hall, if you had come to me my senior year in college while I was getting my finance degree and told me I would be running a bingo hall in three years, I would have said you’re crazy.

So, I am just a great example of someone who has been in the right place at the right time. I have been really fortunate a lot of times and then you couple that with being willing to do the work the opportunity presents, you know, so you kind of make your own way sometimes. You’ve been working around the Tribe as long as I have. You know that even through their trials and tribulations and ups and downs, they have been great people and I am very fortunate to be around them.

PG: When you first came to Tampa, remembering the way it looked back then, could you have envisioned that this would become, in less than 10 years, what they are calling the sixth-largest casino in the world?

JF: Never, never in a million. I didn’t even know to imagine it, you know what I mean? Even though I was working in the casino industry, I don’t think I went to my first casino until after I was working here. I think the first time I was ever in a casino was a trip to Vegas that was part of work here, to a seminar about bingo as part of a gaming conference. First time I had ever been in a casino, so I am not sure I had the mental snapshot to imagine this. It would be like, could you ever imagine seeing Godzilla if you didn’t know what Godzilla looked like?

Certainly back then, I don’t think anyone could have foreseen this. I think the first time I got a notion that this could really be something is when I saw what happened at Foxwoods. That was the first real (Indian) casino. There were people who had some slot machines out there prior to that, but the approach wasn’t a casino approach. But when you saw Foxwoods you started to think, wow, what we could do?

What I do recall is when they first passed IGRA (Indian Gaming Regulatory Act) in ’88, the management company Pan American was here. You know Jim Clare. They were great guys, real nice guys, and they got the deal of the century. But they made an honest deal and lived up to their end of the bargain, as the Tribe did. I remember going to those guys and saying, “Geez, we should just bring slot machines and blackjack tables and crap tables in and see what happens. No one knows what’s going on.”

The Indian Gaming Regulatory Authority did not exist at that time. They just passed this piece of legislation and there were no regulations, no government body, there was nothing. And it said you can do Class III gaming. So I said, you know what, let’s bring the stuff in and sort it out when it is done.

But I think those guys were smart enough to realize – and I wasn’t – that we didn’t have a clue about running one of those things. It’s one thing to say let’s get some blackjack tables and another to actually open one and make it work the right way and not have everyone in the world stealing from you and those kinds of things. But, yeah, that was probably the time, right around then, when I started to think what could happen. And then after I saw Foxwoods, what struck me was it was way up in Connecticut – if you look at the aerials of the place, it is in the woods. I thought, you know, if they can make that kind of money in the woods, think of what we could do in Tampa, or Hollywood.

PG: You realized that people will travel a long way to go to the casino. In other words, they say people from Tampa won’t drive to St. Pete to see the Tampa Bay Rays baseball team, but people from Sarasota will drive all the way up here to the Hard Rock Tampa.

JF: Oh yeah. I had seen some of that. I had seen Cherokee Bingo. They used to bus in 10,000 people and the one time I went there, I don’t know if you have ever been there, but it is on the side of a mountain. Getting there ain’t easy. Imagine getting there on a bus. If you drive from Asheville to the Cherokee Reservation, it’s a two-lane road and I am not even sure you get a bus down there with oncoming traffic.

Then you look around here and you think, wow, in the middle of all this, we could really do something. Then in the late ’90s, we brought the machines in. One of the things I am really proud of is we were the first of any Native American Tribe to do machine-based gaming. We started with the bingo machines that we kind of invented and built in Sarasota, then went to the pull tab machines. There were a couple spots around the country where people went out and bought old used machines and put those out there, but in terms of any kind of scale with machine gaming, Tampa was the first place.

PG: You keep up with all that is going on with Indian gaming around the whole country? I see a lot of those stories and in just the last four years it has increased dramatically. There are Tribes applying for gaming licenses everywhere, even, like you say, in the middle of nowhere.

JF: You look at some of these places and they are beautiful. These travel resorts are all over the country. Gorgeous. People have spent tons of money putting these together. I think back during the time when the Seminole Tribe had partnered with the Pan American guys to go do other bingos. We went to Quapaw, Okla. You flew to St. Louis and then took a small plane somewhere else and you drove out into the middle of the plains on Route 66. It was literally 4 miles south of the middle of nowhere and there are places in those kinds of locations today that have world class, $100-million buildings. And it just amazes me. It is unbelievable how much gaming there is and how ready to go to a casino America is.

PG: But this is all happening while there are pockets of huge protest against gaming expansion everywhere. The opposition was never this vocal in the past.

JF: Public opinion about gaming is on a kind of pendulum. Early on, obviously, there was a lot of resistance that was driven by the gaming jurisdictions lobbying against Tribal gaming. Vegas didn’t want there to be gaming anywhere else in the world.

Then, the states started to understand the revenue potential for the state. That drove the states to say, hey look, the state of Connecticut is getting a $100 million a year out of that. Real money. So you started to see a lot of states with budgets that weren’t gigantic, (a lot smaller than the state of Florida) but where it was a really viable financial solution to some problems. But I think now what you are starting to see is the backlash from all of that … where they are saying, you know it is an easy fix. But you just can’t build casinos and suddenly all the state financial problems are going to go away.

I think you are starting to see a little bit of it. It will settle somewhere sensible at some point. It is crazy. If I had really wanted to chase it, I probably could have worked in 30 states. I never had that desire to be anywhere but here. But the way it has gone, I could have had a job a year for the past 30 years. Moved every year.

PG: What do you see, looking in the future at this point? Is the increase in all these little dinky racinos and storefront gaming rooms, is this eventually going to saturate the market and affect Hard Rock Tampa negatively? Or is the Hard Rock brand so special it can withstand that?

JF: Yes, it is. There is something about having that brand that is so important. Today, people who hear the brand, associate the brand with good things. They hear Hard Rock and they may not have the exact perception of what we are doing, but there is a kind of a subconscious, initial instant positive reaction that is a very positive thing. And I think the brand has helped us in that way. If it was just Seminole casinos, there would certainly be people who have no clue – maybe they never come here – and would have a different perception.

Most people at the end of the day, as voters in the state, will have a voice, whether they ever show up here or not. So I think the brand helps and the Tribe being good custodians of the brand helps as well. I think when you project out into the future, I don’t care what anyone else builds, or what they call it, this brand is something you can’t replicate, you can’t knock it off. You just can’t.

The Hard Rock brand is 40 years old, and I don’t know what the number is but it is the fifth, sixth or seventh most recognized brand on the planet. You are talking about brands like Coke and Pepsi and Nike, IBM, that kind of brand recognition

So, I don’t care who comes up and builds a casino; they are not going to put a name on it that is more recognizable than Hard Rock. The value of the brand is what you make it. The Hard Rock branding guys work on quality and not just slapping a guitar anyplace that’s willing to pay. It would be easy to do that. Lots of people would love to get the brand involved in stuff, no matter what the quality was. And there are opportunities that we need to specifically stay away from.

The brand department works with the “best in breed” type companies. When we do these hotel and casino projects around the world, it is going to be quality; it’s not going to be, OK, someone’s going to give us a million dollars so let’s slap a guitar on the wall. A proper custodian of the brand ensures the future.

PG: Do you get people approaching you here in Tampa with crazy ideas?

JF: We would never handle brand stuff out of Tampa. Anyone who would come here regarding branding like that we would redirect to Orlando. They do come here, though. I had someone corner me with a proposal to have Hard Rock taxi cabs. They were going to use the brand and this really cool idea of a hybrid between a cab and a limousine with multiple people. They had all this software worked out to make it work.

Which brings up an interesting point. In the past, when people approached the Seminole Tribe, 10 out of 10 would approach the Tribe with their hands out (saying), “We can do this; all you got to do is put a million dollars into the project.” Right.

Now it is the other way around with the Tribe. People come to the Tribe and it’s, “Hey listen, we are willing to pay you to get your brand involved in this.” Those are the kind of values, from buying and protecting the brand that I certainly didn’t realize before being involved in all this.

That is a big difference; there are people now actively seeking out the Tribe as a partner – because of the credibility the Tribe brings to the table – instead of as a finance source. Even that was a metamorphosis from the time the Tribe didn’t have a dime. When I first came to work for the Tribe in 1980 at the Accounting Department, if it wasn’t coming in from a federal grant or a state grant, it pretty much wasn’t coming in. The Seminoles just started making a little bit of money in cigarettes, for four or five years, but it wasn’t giant money. And bingo had just been opened a little while.

It’s all changed. I told a reporter the other day we’re funding the state. The state wants our money. They come to us for money. Different world. Ten years down the road, on this property, no matter what happens, you are going to see growth because it is a very strong market. When I think about competition incoming to the market, certainly that is the last thing you want in a market. You don’t need it.

But, we are running the place, the brand, in a way that is ready for whatever comes. The Tribe has a lot of historical claim to what it has and there are reasons that the state should respect that history and the partnership the Tribe has lived up to.

So, if the state wants to expand gaming in the state, my opinion is why would you need anyone besides the Seminole Tribe of Florida to do that? The Seminole Tribe is the strongest, most financially sound gaming company in the United States. We have the only investment grade credit rating. You look at a company like Harris that has 28 to 30 casinos and they are $22 billion in debt. Their debt is 14 to 15 times what they earn in a year.

Our ration is 1.2, 1.5. We have the strongest balance sheet in the industry. So look, if someone wants to build a billion-dollar resort on Miami Beach, we certainly have the financial wherewithal, the expertise and history and resources to do that very successfully. And then you get all the benefits – the revenue encompassing the state.

Believe me, if Genting builds a casino, every dollar of profit is going out of the United States. Seminole Tribe of Florida builds a casino, the expenditures, the payroll, and the profit will all stay in the state of Florida because that’s where the Tribe lives, that’s where the owners live. So why do you need to go look at these other companies to do these things? And it’s not like the Tribe can only build a Hard Rock, right? We can build any theme casino you want to build.

PG: What about the Tampa Seminole people who lived on this reservation. The Chairman gave them a lot of praise in his speech. It seems they were very important to the success, as well.

JF: I have been around the Tribe since I was 12 or 13 years old. So, as much as any non-Tribal member can have exposure to them, I had it. And these folks have been my friends here for 30 years. Bobby Henry, Richard Henry, their families, the Franks, Nancy Frank, these are people I have known for a long time. Now I know their kids and I know their grandkids.

To do what they did … first to come here. These were family-based people. They focused on their families. It is important. It is a circle like a family should be. Think how hard it was to pick up and remove themselves from the structure they were living in, and move to a place where there wasn’t that same structure. It wasn’t like they all came to Tampa because, oh, there was all this money in it for them. It was, “Hey, come and live in Tampa. We are trying to establish the Seminole Tribe here and we need Tribal members to be in Tampa.”

It’s not like jumping on a ship for the other side of the world, but it was a commitment. I’m not sure I would have done that, or could have done that. And then, soon as they got here, we immediately started putting commercial stuff all around them. The bingo hall was busy, really busy and the smoke shop traffic … imagine trying to get in and out of your driveway every day by cutting through the smoke shop line. It was not an easy thing to do.

The building kept getting bigger around them and I don’t know if you remember the townhouses we had back here; they were in the shadow of the back door that was the loading dock for the bingo hall, right next door to them. It wasn’t like this was paradise in Tampa. They put up with so much here, and then we tell them it is going to get bigger so we need you to move off this piece of land; go live in another community. Now, they are spread out. That was a lot of sacrifice.

They were integral to the success we have here. This is a Tribal government. It is not a business. So if you think about how that group of people could have reacted in terms of their political position with the people who were at the helm when all this was happening to them …

Think about it. If they had convinced James – no we should not economically develop the Tampa property; this is a reservation; we live here; we don’t want to build Hard Rock here; go away – think about the impact on the Tribe. This was 60, 70, 80 people who sacrificed a lot.

It was different on the other reservations. Gaming was never as impactful as it was here in Tampa. That speaks volumes to the folk here. I have a huge amount of respect for them and, hopefully, they consider me a friend and not just a guy who works here.

And now you see the children of people who were born after we got here come to work. We have Johnny Henry’s son, Andrew, in the TCD program. He’s a good kid. You see Richard Henry’s daughter, Alena, in the program and she is getting ready to have kids. There is definitely a rich Tribal history here in Tampa. I am very thankful to those folks.

 

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