Nevada gamers awaiting OK to begin big California casinos

Mary Lynne Vellinga and Steve Wiegand

Monday, Sept. 20, 1999 | 10:54 a.m.

SACRAMENTO -- At this moment, a faux 19th-century mining town is taking shape in the California town of Jackson, a facade to prettify a building full of slot machines in classic Nevada fashion.

If Californians vote in March to approve a constitutional amendment placed on the ballot by the Legislature, the Jackson Rancheria will transform its casino's insides as well, ripping out many of the current video gambling terminals, which dispense paper tickets, and replacing them with regular coin-chucking slot machines.

"It's moving from the old Indian bingo hall to a Nevada-style casino that would appear similar to Boomtown in Reno. It's just taking it to the next level," said Rich Hoffman, marketing director for the casino.

The introduction of Nevada-style slots and blackjack games in existing tribal casinos such as Jackson and the Rumsey Band's Cache Creek Casino in Yolo County will be one of the most immediate and visible changes Californians will see if they ratify the agreement reached this month between Gov. Gray Davis and nearly 60 of the state's tribes, say those in the gambling industry.

That change should please any gambler. "I do like the machines (in Nevada) better," said Lilian Kennedy of Woodland as she played a "Lucky Cherries" machine at the Cache Creek Casino in Brooks. "I like it when the coins fall out, and the noise it makes."

The constitutional blessing of casino gambling on Indian reservations may also draw big-time Nevada casino companies into California to back tribes entering the gambling business. Companies like Harrah's and Caesars World previously announced casino projects with California tribes, but backed off because of the legal cloud over Indian gambling here.

"I think it is pretty certain that some of the major public (gaming) corporations will start quietly slipping into the Indian casino market in the next few years," said Lou Phillips, a business professor at the University of Nevada, Reno and former president of operations for Harrah's in Nevada.

One of the first places this could happen is in Placer County, where the United Auburn Indian Community -- a tribe with no reservation -- wants to acquire 56 acres for a casino off Highway 65. The tribe is expected to sign soon with a casino management company.

"It's probably going to be a company licensed in Nevada or New Jersey and registered on the New York Stock Exchange," said tribal spokesman Doug Elmets.

The introduction of sophisticated and wealthy backers, combined with provisions of the governor's agreement allowing a potential doubling of machines in Indian Country, to 43,000, could lead to much larger casinos, experts say.

The agreement between Davis and the tribes allows Indian casinos to have up to 2,000 slot machines. Cache Creek and Jackson now have about 400 machines each, said attorney Howard Dickstein, who represents the Jackson and Rumsey bands. The biggest tribal casinos in the state, in Southern California, have between 1,000 and 2,000 machines.

Under the new agreement, "There will be the potential, if the market is there, for creating some of the largest casinos in the United States," said I. Nelson Rose, an expert on Indian gambling law at Whittier Law School in Costa Mesa. "There are about 700 casinos in the United States, and there are only a couple dozen that have more than 2,000 slot machines."

Existing casinos in the area probably won't mushroom into giants, said Dickstein, because their locations are too remote.

But the Highway 65 casino planned by the Auburn tribe could be a different story, as could the gambling resort envisioned by the Shingle Springs Band of Miwok Indians for a spot along Highway 50. These locations are much closer to Sacramento and the booming populations of El Dorado and Placer counties, a huge base of potential gamblers.

Elmets said he wasn't sure how many slot machines the Auburn tribe plans to put in its Highway 65 casino. It wants to build a casino of about 200,000 square feet, 75,000 of which would be dedicated to gambling. That would make it about the same size as a riverboat casino or a large casino in Reno, said Rose.

In its lengthy quest to acquire land, the Auburn tribe most recently has hit opposition from local officials in Roseville and Rocklin. But most observers don't think that will stop the project.

The land is in unincorporated Placer County, and the tribe has worked with county officials to find an acceptable site. The tribe also agreed to mitigate traffic and environmental impacts and pay for extra police and fire protection needed because of the casino.

The tribe is not required to involve local government in its plans. To buy land in its historical territory, a landless tribe like Auburn need only get the approval of the secretary of the interior.

But Interior Secretary Bruce Babbitt has been loath to approve such applications in the face of local opposition.

"The good thing Auburn has going for it is that the Board of Supervisors supports them. ... That doesn't happen very often," said Ron Jaeger, regional director for the Bureau of Indian Affairs.

The Miwok Indians in Shingle Springs face more obstacles as they- pursue their dream of opening a casino and "destination resort" off Highway 50 in El Dorado County. The tribe operated a small, tent-like gaming house, the Crystal Mountain Casino, on its rancheria for five months in 1997 before neighbors sued and a judge ruled that customers couldn't use a residential street that provided the only access. Backed by investors in Southern California, Minneapolis and Houston, it has since hatched a plan to acquire 42 acres on the other side of the highway across from its reservation.

Getting Babbitt to approve the acquisition could be tricky. Indian gaming laws generally require casinos be built on reservation land, or on land next to, or contiguous to, the reservation. The tribe argues the new site is contiguous, though a highway runs between the parcels. Many neighbors vociferously oppose the project.

"It is contiguous except that the highway runs through it; I don't know how the (interior) secretary is going to view that," Jaeger said.

For some tribes, the hassles involved in setting up a casino won't seem worth it in light of the fact that, under the agreement between Davis and the tribes, all non-gambling tribes can receive $1.1 million a year simply by staying out of the business.

The Chico-based Mechoopda Indian Tribe may wind up leasing its rights for a year or two while it "studies its options," said attorney Fred Hiestand. The landless tribe -- whose historical territory is now covered by the dorms and classrooms of California State University, Chico, has encountered fierce opposition to its attempt to buy 248 acres off of Highway 99 in southern Sutter County, part of which would be used for a casino.