Should have posted this the other day but in case anyone was interested here it is...
Tribes in county gear up for major expansions as prospects grow for unlimited slot machines
By Chet Barfield
UNION-TRIBUNE STAFF WRITER
May 22, 2004
A skyscraper going up in a field near Valley Center embodies the future of Indian gaming in San Diego County.
Higher profile, higher caliber, higher stakes.
With the likelihood that the governor or voters could remove a state limit on tribal slot machines, the potential growth of Indian casinos is immense. And that has people wondering – or worrying – about the impacts, from traffic, land use and water to changes in the social and political landscapes.
Some expansion already is under way. The Rincon band in North County is building a 22-story, 470-room hotel for its Harrah's casino. It will be the county's tallest building outside the city of San Diego.
The $150 million high-rise demonstrates how casino gambling can transform a dirt-poor tribe into a towering business.
It also offers a glimpse of what's ahead for the county, which has more Indian reservations, more casinos and more tribes with state gambling agreements than any other in the nation.
Graphic:
Gaming growth
Three local tribes have joined at least four others in the state in seeking a new gambling agreement, or compact, with Gov. Arnold Schwarzenegger. If the governor lifts the limit of 2,000 slots per reservation, tribes would provide the debt-plagued state with hundreds of millions of dollars in new revenue along with ongoing licensing revenue.
Similarly, one of two gambling measures headed for the Nov. 2 ballot would eliminate the cap on slots, with tribal casinos paying the equivalent of a 9 percent corporate tax to the state.
Graphic:
The players
Such a change would fundamentally shift Indian gaming from an industry now held in check by the state to an open market in which the main constraint would be balancing cost against profit.
The number of slot machines is crucial to casinos because slots generate most of their money – $260 each per day on average, according to a Copley News Service analysis.
Experts say the potential market for slots in the county and Southern California is phenomenal.
"What is the capacity for Southern California? Nobody knows, and nobody can count that high," said Michael Meczka, a casino market researcher in Los Angeles."There is a huge, gargantuan, unprecedented, unmet demand for gaming in California."
Overview
Background: Since California legalized Nevada-style slot gambling on reservations in 2000, Indian gaming has grown phenomenally in San Diego County. There are now more Indian casinos here than in any other U.S. county. Combined, they operate more than 12,000 slot machines.
What's changing: It's increasingly likely the limit of 2,000 slot machines per reservation will be lifted.
The future: With no limits on slots, Indian casinos would grow to meet market demand, including the expansion of hotels and entertainment venues. Likely effects would include new jobs, increased tourism and heightened land-use and cultural tensions.
The other side of the equation – the money that tribes would have to pay to state and local governments – also remains unknown.
Indian gaming officials say casinos in the county are too spread out to ever rival the Las Vegas Strip.
"The lure of Vegas isn't for a single hotel; the lure is for multiple venues," said Viejas spokeswoman Nikki Symington. "If (the reservations) were on the coast, it would be a Gold Coast. It would be a Riviera."
The prospect of casinos in urban areas came up earlier this month when the governor indicated he might be willing to allow some tribal casinos outside of reservations, if local municipalities approve.
That would open the door for two local tribes with long-shot hopes of developing casinos in cities near freeways and far from their remote reservations. North County's Los Coyotes band is pursuing a casino plan with the city of Barstow, and East County's Manzanita band has proposed one near El Centro.
However, any off-reservation casino proposal would have to be approved by the U.S. Interior Department, which, at the urging of Congress, has rejected almost all such plans. Additionally, other tribes could object if they had ancient ties to the site.
Nevertheless, Indian gaming is bound to grow in the county.
Growth of slots
The past four years have been nothing short of explosive.
When voters legalized Nevada-style slot machines on California reservations in 2000, San Diego County had three tribal casinos operating a total of about 2,600 video imitations of slot machines. Since then, six more tribes have opened casinos. Combined, they operate more than 12,000 Nevada-style slots.
CHARLIE NEUMAN / Union-Tribune
Project safety coordinator Sean Lovelass, on the 19th floor of the hotel under construction at Rincon, enjoyed a view that stretched from the existing hotel and its pool area to the undeveloped hills and mountains nearby.
Nearly two-thirds of those machines are in the four casinos now at the 2,000-slot limit: Barona, Pala, Sycuan and Viejas. Three of those, in addition to Rincon, have opened hotels in the hope of drawing customers from outside the region.
At least four more local tribes want to build larger resort-casinos or expand their existing ones.
With no limit on slots, the region's biggest venues probably would increase their inventories by 50 percent to 100 percent, casino officials say. They would add hotel rooms and grander entertainment halls to attract bigger stars. Some casinos might build large conference centers for a slice of the convention trade.
However, most casinos won't double or triple their slots, said Anthony Miranda, chairman of the California Nations Indian Gaming Association.
Marty Goldman, Harrah's Rincon marketing vice president, said there are reasons that only four of the nine casinos in San Diego County are at the 2,000-slot maximum. (Rincon has 1,600.) More slots add revenue during peak night and weekend hours, but they cost casinos money when they aren't being used.
"I don't think you'll find anybody going to that 5,000 number in the near future," he said. "Does a guest care if you have 1,000, 2,000 or 5,000 machines as long as you have the machine they want and they enjoy the atmosphere and the amenities you provide?"
The nearby Pauma band is pushing for the new compact to create a more open market, not necessarily to exceed 2,000 slots, said tribal Chairman Chris Devers.
Pauma wants to expand its mid-size casino on Route 76 into a gambling resort with the Las Vegas owners of Caesars Palace. Devers said competition, cost and demand will determine whether to go for more than 2,000 machines.
Pala attorney Howard Dickstein said tribes that want super-sized casinos will have to factor in substantially higher payments to state and local governments, in addition to construction costs. To exceed the slot cap under Schwarzenegger's proposal, tribes would have to pay a graduated scale of increased license fees, which could top out at $25,000 per year per machine.
'Era of transformation'
No matter the size or pace, the growth of Indian gaming in the county will amplify changes in other important arenas: Jobs and economics. Politics. Land-use planning. Infrastructure. Intergovernmental relations. Cross-cultural friendships and frictions. All are influenced by the rising accessibility and popularity of Indian casinos and the financial gains they bring to the tribes.
"Nobody cared about the tribes when they had nothing," said Sycuan attorney George Forman. "Now we're looking at an era of transformation between Indian governments and surrounding communities."
Casinos in the county employ more than 12,000 workers, from entry-level positions to chefs and executives. Combined, the casinos spend more than $25 million a month on goods and services, mostly from local vendors.
Kelly Cunningham, research director for the Greater San Diego Chamber of Commerce, said casinos bring in money from other places and keep local gambling dollars here.
However, Cunningham said, nobody has studied in detail the net economic impact of Indian gaming on the region. Tribes may release payroll and purchase figures to show they're spurring the economy, but they don't say how much money their casinos generate.
Sal Giametta, vice president of the San Diego Convention & Visitors Bureau, said Indian gaming is a growing component of the region's tourism draw, and he expects that to increase as casinos expand.
There are no Indian reservations in Los Angeles or Orange counties, the main areas targeted by gambling resorts in San Diego, Riverside and San Bernardino counties for outside business.
Casinos in the county already attract tens of thousands of customers a day, most of whom arrive on two-lane roads. As the casinos grow, so will the demands for road improvements.
"This road right now is bad enough as it is," said Rick Wilson, a landscaper who lives on Wildcat Canyon Road a few miles south of Barona Valley Ranch Resort and Casino. "You can add more slot machines and they get more business, but are they going to add more access as far as widening the road, and safety?"
That's one in a long list of questions. What about law enforcement? Fire protection? Electricity?
And, perhaps most important, what about water? Barona, Sycuan and Viejas are exploring options for tapping supplies beyond their wells to meet growing needs, said Chantal Saipe, the county's tribal liaison.
"They all have to be concerned about water," she said. "That's a factor in their expansion plans."
The five gaming tribes in North County – Pala, Pauma, Rincon, San Pasqual and La Jolla – will get an allotment of imported water under the settlement of a long-standing lawsuit over San Luis Rey River water. But officials of the San Diego County Water Authority say the East County tribes have slim chances of getting significant future supplies from the authority.
Symington, the Viejas spokeswoman, said that under the proposed compact, tribes would pay counties more to offset impacts such as traffic, law enforcement and fire protection.
That's what Sheriff Bill Kolender asked for last year in a letter to then-Gov. Gray Davis. "New compacts must address the dangerous strain on law enforcement created by the introduction of new large-scale gambling casinos and resorts," the sheriff said, noting that deputies in the backcountry must handle crimes at the casinos, such as auto theft, robbery and assault.
Planning, moral issues
But some aspects of casino growth can't be addressed with a check. How, for example, might it affect rural development or the supply of, and demand for, housing?
"The thing that scares me is residential, that they might decide to house their workers," said Joe Chisholm, chairman of the county's Pala-Pauma advisory group. "Instead of having the cities growing out, it would be the reverse."
Ivan Haller, director of the county's General Plan 2020 update, said he has asked tribes for their input and involvement in the project but has gotten little response. "None of them are actively participating in our process," he said.
Tribes have little interest in the general plan update. They note that they were never asked in the past how county plans might affect their reservations.
Also, tribes do not plan or operate regionally. Each is an independent governmental unit. There is no one person or group representing the region's 17 tribes, so they all must be dealt with individually.
That leaves Haller and other planners unsure how to factor the casinos into their land-use blueprints.
"Will they all thrive? Will there end up being just a few very large operators?" Haller asked. "That's very hard for long-range planning."
Some people think gambling is bad, period, and that encouraging more casino growth is bad state policy.
The Rev. Molly Vetter, associate minister of the First United Methodist Church of San Diego, believes gambling often preys on people who can least afford it, is potentially addictive and promotes a mentality of "getting something for nothing."
Despite the state budget crises, "I think it's a mistake to turn to gambling as a way out of our problems," Vetter said.
Critics worry that casino profits are making tribes too influential, too powerful and too political. Viejas Chairman Anthony Pico sees it differently.
"Tribes found a source of income to fund our governments, thus allowing us to take our place in the California political landscape," he told the Sacramento Press Club in April. "Shouldn't we all be celebrating? America is finally living up to its promise to American Indians."
In response to complaints about tribes donating large sums to state politicians and campaigns, Pico noted that governors and states had heavy influence in the 1988 law that requires tribes to obtain state compacts for casinos on their reservations.
"Simply amend (that law) to remove the compact requirements, and I promise, we will be glad to keep our money at home," he said. "As long as this state wants to regulate our business, we have to be interested in state government."
Casino profits are building more than political muscle. Successful tribes are launching other businesses, forging partnerships with private companies. They are donating thousands of dollars to charities and nonprofit agencies, and sponsoring food drives and Little League teams.
More and more, they are interacting with the world around them.
Chisholm of the North County advisory group invites tribal leaders to his meetings, and he goes to theirs. He isn't afraid of the tribes' growth. He thinks it might be interesting.
"Maybe it'll create a new paradigm," he said. "Maybe they'll become more mainstream. At the moment, I'm not necessarily sure the mainstream works very well, anyway."
Tribes in county gear up for major expansions as prospects grow for unlimited slot machines
By Chet Barfield
UNION-TRIBUNE STAFF WRITER
May 22, 2004
A skyscraper going up in a field near Valley Center embodies the future of Indian gaming in San Diego County.
Higher profile, higher caliber, higher stakes.
With the likelihood that the governor or voters could remove a state limit on tribal slot machines, the potential growth of Indian casinos is immense. And that has people wondering – or worrying – about the impacts, from traffic, land use and water to changes in the social and political landscapes.
Some expansion already is under way. The Rincon band in North County is building a 22-story, 470-room hotel for its Harrah's casino. It will be the county's tallest building outside the city of San Diego.
The $150 million high-rise demonstrates how casino gambling can transform a dirt-poor tribe into a towering business.
It also offers a glimpse of what's ahead for the county, which has more Indian reservations, more casinos and more tribes with state gambling agreements than any other in the nation.
Graphic:
Gaming growth
Three local tribes have joined at least four others in the state in seeking a new gambling agreement, or compact, with Gov. Arnold Schwarzenegger. If the governor lifts the limit of 2,000 slots per reservation, tribes would provide the debt-plagued state with hundreds of millions of dollars in new revenue along with ongoing licensing revenue.
Similarly, one of two gambling measures headed for the Nov. 2 ballot would eliminate the cap on slots, with tribal casinos paying the equivalent of a 9 percent corporate tax to the state.
Graphic:
The players
Such a change would fundamentally shift Indian gaming from an industry now held in check by the state to an open market in which the main constraint would be balancing cost against profit.
The number of slot machines is crucial to casinos because slots generate most of their money – $260 each per day on average, according to a Copley News Service analysis.
Experts say the potential market for slots in the county and Southern California is phenomenal.
"What is the capacity for Southern California? Nobody knows, and nobody can count that high," said Michael Meczka, a casino market researcher in Los Angeles."There is a huge, gargantuan, unprecedented, unmet demand for gaming in California."
Overview
Background: Since California legalized Nevada-style slot gambling on reservations in 2000, Indian gaming has grown phenomenally in San Diego County. There are now more Indian casinos here than in any other U.S. county. Combined, they operate more than 12,000 slot machines.
What's changing: It's increasingly likely the limit of 2,000 slot machines per reservation will be lifted.
The future: With no limits on slots, Indian casinos would grow to meet market demand, including the expansion of hotels and entertainment venues. Likely effects would include new jobs, increased tourism and heightened land-use and cultural tensions.
The other side of the equation – the money that tribes would have to pay to state and local governments – also remains unknown.
Indian gaming officials say casinos in the county are too spread out to ever rival the Las Vegas Strip.
"The lure of Vegas isn't for a single hotel; the lure is for multiple venues," said Viejas spokeswoman Nikki Symington. "If (the reservations) were on the coast, it would be a Gold Coast. It would be a Riviera."
The prospect of casinos in urban areas came up earlier this month when the governor indicated he might be willing to allow some tribal casinos outside of reservations, if local municipalities approve.
That would open the door for two local tribes with long-shot hopes of developing casinos in cities near freeways and far from their remote reservations. North County's Los Coyotes band is pursuing a casino plan with the city of Barstow, and East County's Manzanita band has proposed one near El Centro.
However, any off-reservation casino proposal would have to be approved by the U.S. Interior Department, which, at the urging of Congress, has rejected almost all such plans. Additionally, other tribes could object if they had ancient ties to the site.
Nevertheless, Indian gaming is bound to grow in the county.
Growth of slots
The past four years have been nothing short of explosive.
When voters legalized Nevada-style slot machines on California reservations in 2000, San Diego County had three tribal casinos operating a total of about 2,600 video imitations of slot machines. Since then, six more tribes have opened casinos. Combined, they operate more than 12,000 Nevada-style slots.
CHARLIE NEUMAN / Union-Tribune
Project safety coordinator Sean Lovelass, on the 19th floor of the hotel under construction at Rincon, enjoyed a view that stretched from the existing hotel and its pool area to the undeveloped hills and mountains nearby.
Nearly two-thirds of those machines are in the four casinos now at the 2,000-slot limit: Barona, Pala, Sycuan and Viejas. Three of those, in addition to Rincon, have opened hotels in the hope of drawing customers from outside the region.
At least four more local tribes want to build larger resort-casinos or expand their existing ones.
With no limit on slots, the region's biggest venues probably would increase their inventories by 50 percent to 100 percent, casino officials say. They would add hotel rooms and grander entertainment halls to attract bigger stars. Some casinos might build large conference centers for a slice of the convention trade.
However, most casinos won't double or triple their slots, said Anthony Miranda, chairman of the California Nations Indian Gaming Association.
Marty Goldman, Harrah's Rincon marketing vice president, said there are reasons that only four of the nine casinos in San Diego County are at the 2,000-slot maximum. (Rincon has 1,600.) More slots add revenue during peak night and weekend hours, but they cost casinos money when they aren't being used.
"I don't think you'll find anybody going to that 5,000 number in the near future," he said. "Does a guest care if you have 1,000, 2,000 or 5,000 machines as long as you have the machine they want and they enjoy the atmosphere and the amenities you provide?"
The nearby Pauma band is pushing for the new compact to create a more open market, not necessarily to exceed 2,000 slots, said tribal Chairman Chris Devers.
Pauma wants to expand its mid-size casino on Route 76 into a gambling resort with the Las Vegas owners of Caesars Palace. Devers said competition, cost and demand will determine whether to go for more than 2,000 machines.
Pala attorney Howard Dickstein said tribes that want super-sized casinos will have to factor in substantially higher payments to state and local governments, in addition to construction costs. To exceed the slot cap under Schwarzenegger's proposal, tribes would have to pay a graduated scale of increased license fees, which could top out at $25,000 per year per machine.
'Era of transformation'
No matter the size or pace, the growth of Indian gaming in the county will amplify changes in other important arenas: Jobs and economics. Politics. Land-use planning. Infrastructure. Intergovernmental relations. Cross-cultural friendships and frictions. All are influenced by the rising accessibility and popularity of Indian casinos and the financial gains they bring to the tribes.
"Nobody cared about the tribes when they had nothing," said Sycuan attorney George Forman. "Now we're looking at an era of transformation between Indian governments and surrounding communities."
Casinos in the county employ more than 12,000 workers, from entry-level positions to chefs and executives. Combined, the casinos spend more than $25 million a month on goods and services, mostly from local vendors.
Kelly Cunningham, research director for the Greater San Diego Chamber of Commerce, said casinos bring in money from other places and keep local gambling dollars here.
However, Cunningham said, nobody has studied in detail the net economic impact of Indian gaming on the region. Tribes may release payroll and purchase figures to show they're spurring the economy, but they don't say how much money their casinos generate.
Sal Giametta, vice president of the San Diego Convention & Visitors Bureau, said Indian gaming is a growing component of the region's tourism draw, and he expects that to increase as casinos expand.
There are no Indian reservations in Los Angeles or Orange counties, the main areas targeted by gambling resorts in San Diego, Riverside and San Bernardino counties for outside business.
Casinos in the county already attract tens of thousands of customers a day, most of whom arrive on two-lane roads. As the casinos grow, so will the demands for road improvements.
"This road right now is bad enough as it is," said Rick Wilson, a landscaper who lives on Wildcat Canyon Road a few miles south of Barona Valley Ranch Resort and Casino. "You can add more slot machines and they get more business, but are they going to add more access as far as widening the road, and safety?"
That's one in a long list of questions. What about law enforcement? Fire protection? Electricity?
And, perhaps most important, what about water? Barona, Sycuan and Viejas are exploring options for tapping supplies beyond their wells to meet growing needs, said Chantal Saipe, the county's tribal liaison.
"They all have to be concerned about water," she said. "That's a factor in their expansion plans."
The five gaming tribes in North County – Pala, Pauma, Rincon, San Pasqual and La Jolla – will get an allotment of imported water under the settlement of a long-standing lawsuit over San Luis Rey River water. But officials of the San Diego County Water Authority say the East County tribes have slim chances of getting significant future supplies from the authority.
Symington, the Viejas spokeswoman, said that under the proposed compact, tribes would pay counties more to offset impacts such as traffic, law enforcement and fire protection.
That's what Sheriff Bill Kolender asked for last year in a letter to then-Gov. Gray Davis. "New compacts must address the dangerous strain on law enforcement created by the introduction of new large-scale gambling casinos and resorts," the sheriff said, noting that deputies in the backcountry must handle crimes at the casinos, such as auto theft, robbery and assault.
Planning, moral issues
But some aspects of casino growth can't be addressed with a check. How, for example, might it affect rural development or the supply of, and demand for, housing?
"The thing that scares me is residential, that they might decide to house their workers," said Joe Chisholm, chairman of the county's Pala-Pauma advisory group. "Instead of having the cities growing out, it would be the reverse."
Ivan Haller, director of the county's General Plan 2020 update, said he has asked tribes for their input and involvement in the project but has gotten little response. "None of them are actively participating in our process," he said.
Tribes have little interest in the general plan update. They note that they were never asked in the past how county plans might affect their reservations.
Also, tribes do not plan or operate regionally. Each is an independent governmental unit. There is no one person or group representing the region's 17 tribes, so they all must be dealt with individually.
That leaves Haller and other planners unsure how to factor the casinos into their land-use blueprints.
"Will they all thrive? Will there end up being just a few very large operators?" Haller asked. "That's very hard for long-range planning."
Some people think gambling is bad, period, and that encouraging more casino growth is bad state policy.
The Rev. Molly Vetter, associate minister of the First United Methodist Church of San Diego, believes gambling often preys on people who can least afford it, is potentially addictive and promotes a mentality of "getting something for nothing."
Despite the state budget crises, "I think it's a mistake to turn to gambling as a way out of our problems," Vetter said.
Critics worry that casino profits are making tribes too influential, too powerful and too political. Viejas Chairman Anthony Pico sees it differently.
"Tribes found a source of income to fund our governments, thus allowing us to take our place in the California political landscape," he told the Sacramento Press Club in April. "Shouldn't we all be celebrating? America is finally living up to its promise to American Indians."
In response to complaints about tribes donating large sums to state politicians and campaigns, Pico noted that governors and states had heavy influence in the 1988 law that requires tribes to obtain state compacts for casinos on their reservations.
"Simply amend (that law) to remove the compact requirements, and I promise, we will be glad to keep our money at home," he said. "As long as this state wants to regulate our business, we have to be interested in state government."
Casino profits are building more than political muscle. Successful tribes are launching other businesses, forging partnerships with private companies. They are donating thousands of dollars to charities and nonprofit agencies, and sponsoring food drives and Little League teams.
More and more, they are interacting with the world around them.
Chisholm of the North County advisory group invites tribal leaders to his meetings, and he goes to theirs. He isn't afraid of the tribes' growth. He thinks it might be interesting.
"Maybe it'll create a new paradigm," he said. "Maybe they'll become more mainstream. At the moment, I'm not necessarily sure the mainstream works very well, anyway."
