San Francisco – The latest Indian casino to open in Northern California, the Red Hawk Casino, will join 57 others across the state, many that pour millions annually into local and state coffers.
It’s a tough time for the Shingle Springs Band of Miwok Indians to bet on gaming profits; with other casino projects in the country being scaled back, publicly traded casino stocks plummeting and gaming revenue in Nevada dipping by 5.4 percent in September.
But Red Hawk General Manager Peter Fordham is keeping his game face on – saying he still expects the tribe’s casino to profit. He just wouldn’t estimate how much.
“The economy today is not what it was even six months ago, but we believe this is a very high-potential market and perhaps not even tapped into deeply at this point,” he said. “We’re a little more cautious than we were in the initial planning stages. But we think we will bring in more than enough business.”
The casino opens Dec. 17 in Placerville, Calif., about 30 minutes east of Sacramento. Among the reasons Fordham cites for its potential profitability is its location, which he calls, “The best in town.” Access to the casino was made easy by construction of the Red Hawk interchange exit off Highway 50.
The casino is an hour and a half east of San Francisco, where amid economic crisis residents are still seen boarding sleek casino buses to spend a day at rural Indian casinos a few hours north. Red Hawk Casino may even woo away locals from a costlier drive to Reno or Lake Tahoe, and nearby casinos including its successful competitor, Thunder Valley Casino an hour away in Lincoln, Fordham said.
Thunder Valley is reportedly spending an estimated $1 billion to make improvements including a hotel tower and a performing arts center. The rural Cache Creek Casino Resort, in the Capay Valley, is spending an estimated $300 million to add hotel capacity, restaurants and a conference center.
“Our business is not totally recession proof, but it is more resistant than most in an economic downturn,” Fordham said.
He would know. Before taking the job in April at the Red Hawk Casino, Fordham – who is non-Native – helped oversee the development of Chukchansi Gold Resort and Casino in Coarsegold, Calif. Before that, he managed operations for the KwaTaqNuk Resort Casino and the Gray Wolf Peak Casino, both owned by the Confederated Salish and Kootenai Tribes of northwest Montana.
“A lot of tribes have been able to build on the success of the tribes that came very early to Indian gaming, right after the federal regulatory act,” Fordham said. “I’ve been happy to see so many success stories over the years, with tribes utilizing profits to really improve their lives.”
And often, helping to improve the localities and state in which they are located – a dire need for California, which is projecting a $11 billion deficit.
The Shingle Springs Band of Miwoks is contracted to provide the state with 20 percent to 25 percent of all slots earnings, in exchange for permission to operate 5,000 slot machines through 2029.
Under the bill that Gov. Arnold Schwarzenegger signed in September to ratify the tribe’s gaming compact, the tribe will also pay $4.6 million per year to the Revenue Sharing Trust Fund for non-gaming tribes in California, many of which use the funds for infrastructure and education.
The Shingle Springs Miwoks plan to use casino revenues to help fund higher education for youth and adults, and other pressing needs, said tribal chairman Nicholas H. Fonseca in a statement.
“Educational opportunities, complete medical services, decent housing, and the ability to invest, and to re-invest in ourselves and our community are the benefits to our tribe, and to the surrounding community,” Fonseca said.
The tribe must also pay El Dorado County about $200 million over a 20-year period for law enforcement, social services, road improvements and other programs to offset the casino’s potential effect on the local area.
It’s a common arrangement many California tribes have to make with local officials. This one came after years of litigation with the El Dorado County Board of Supervisors, and opposition from many residents.
“There was some well-organized grassroots opposition from the local community, which preferred not to see a large tribal casino built in this area,” Fordham said. “The tribe worked very hard and did everything the right way and through a lot of hard work won over the support of the community.”
The $530 million casino is now in the final stages of hiring 1,800 employees from the region. It has received more than 18,000 applications at Redhawkcasino.com, some of them from people applying for more than one job.
The casino is still in the process of hiring for a few hundred more jobs including food and beverage, maintenance, housekeeping, and a few gaming positions.
The Minneapolis-based Lakes Entertainment Inc. built and is managing the tribe’s casino. The company has also developed and helped finance a casino on the Rancheria of the Jamul Indian Village near San Diego, two casinos for the Iowa Tribe of Oklahoma, and a casino for the Pokagon Band of Potawatomi.
It was also a lead investor of a failed constitutional amendment on the Ohio ballot that would have allowed it to build a casino in southwest Ohio.
The 278,000 square feet Red Hawk casino, with approximately 88,000 square feet of gaming space, will initially operate 2,000 slot machines and 75 table games, and contains four bars, a 1,468-square-foot retail outlet, 10 food outlets and an 18,800-square-foot childcare facility and a video arcade.
According to Indiancasinos.com, California already boasts 27 casinos in its northern region, seven in the central region and 23 in Southern California.
It’s an industry that operates in philosophical contrast to non-tribal gaming, Fordham said, and that’s the reason he is “hooked.”
“In corporate America, the business is driven in a very black and white, fiscal-oriented way,” he said. “In tribal gaming, obviously profitability is still central, but it’s a more people-centric way of doing business.”