Vegas casino operator teams with Auburn Indians

Wednesday, Oct. 13, 1999 | 9:41 a.m.

The deal with the United Auburn Community calls for a 200,000-square-foot casino, to open in 2002 with more than 1,500 slot machines and 50 table games.

The deal also represents one way Nevada gaming firms are likely to try to maintain their businesses in the face of an expected expansion of Indian casinos in California. Indians in California appear likely to win the right to expand their gambling business through a popular March ballot measure.

Station will get 22.5 percent of the California casino's revenues, plus a fee for the use of the Station brand. The management contract is for seven years. Station will help the tribe line up financing, but will not borrow for the project.

"This situation fits very well into our strategy of finding opportunities with local markets," Glenn Christenson, executive vice president and chief financial officer of Station, said Tuesday. "It's no different from Kansas City or St. Louis. We're applying our local market strategy to Sacramento."

The Auburn tribe said a key factor in its choice of Station was the company's help with financing and its operating experience.

"We particularly admired the company's financial depth and stability, many years of success in the gaming industry and impeccable credentials," tribe chairwoman Jessica Tavares said in a written statement.

Station runs the Palace Station, Boulder Station, Texas Station, Sunset Station and Wild West hotel-casinos in southern Nevada. It also runs casinos near St. Louis and Kansas City.

The tribe's plan has caused controversy, with city councils of nearby Roseville, Rocklin and Lincoln opposing it.

The attorney for Placer County, Calif., said an agreement reached in August between the county and the tribe is no longer valid because of Lincoln council members' recent vote not to let the tribe hook up to city water and sewer lines.

But Placer County Supervisor Rex Bloomfield predicted the agreement could be preserved despite the opposition.

"The casino is coming," he said. "The federal government forced it down our throats, and now we'd better deal with it. Local jurisdictions can grandstand all they like, but they can't change the federal law."

Casino industry analysts said the move by Station is sure to be copied by other Nevada operators.

"They are going to make sure their flank is covered," said Stuart Linde, a gambling analyst with Lehman Bros. in New York. "Now they're coming to the conclusion that it's reality, it's full scale gaming. So you want to make sure you're tapping your brand into those markets."

The proposed location is close to Interstate 80, a main route to Reno casinos for most northern Californians.

After the California Supreme Court overturned Proposition 5, a voter-approved proposition legalizing gambling earlier this year, tribal leaders quickly negotiated compacts with California Gov. Gray Davis.

Las Vegas casino operators poured tens of millions of dollars into a campaign against Proposition 5, fearing the damage that could be caused by legalizing gambling in Nevada's largest market. No such campaign is being mounted in advance of the March ballot measure election.