3 years later — Red Hawk Casino a financial disappointment
By Dale Kasler, Sacramento Bee
The Shingle Springs Band of Miwok Indians battled for more than a decade to build a casino along Highway 50, a gambling palace that would lift the tribe out of poverty.
It hasn’t worked out that way.
Three years after it opened, Red Hawk Casino is performing well below expectations, can’t pay all its debts and has failed to enrich its owners.
Despite a sea of slot machines and elegant trimmings worthy of Las Vegas, the $535 million casino continues to be dwarfed by its wildly successful rival, Thunder Valley Casino near Lincoln, in the battle for Sacramento-area gamblers.
Some of Red Hawk’s woes have been made public before, including the debt problems. Now, testimony in an El Dorado Superior Court lawsuit provides the most vivid picture yet of how badly the Shingle Springs casino is lagging.
Red Hawk took in $214 million in gambling revenue last year, testimony shows. That was 10 percent below 2009, its first full year of operation.
More importantly, that was about $100 million less than what was expected in a forecast the tribe made in 2007, according to court records. Gambling revenue is the amount the house wins, not the amount wagered.
“I think it’s strictly the economy,” said Nick Fonseca, chairman of the Shingle Springs tribe. “This is a new reality, and tribes are going to have to adjust to it.”
Normally kept secret, details of Red Hawk’s performance have spilled out in a lawsuit against the tribe by a company that once supplied it with slot machines and contends it is entitled to a cut of the profits.
Executives with the casino and the company that manages it for the tribe, Lakes Entertainment Inc. of Minneapolis, declined to comment further on Red Hawk, citing the ongoing court case.
But in an interview outside the courthouse during a break in the trial, Fonseca said the tribe is getting just $6 million a year in profits – the bare minimum guaranteed by Lakes.
Individual tribal members are receiving $800 a month in profit distributions, he said. Half of his 500 members continue to live below the poverty line.
By comparison, the 300 members of Thunder Valley’s owner, the United Auburn Indian Community, reportedly get $30,000 a month apiece in casino profits.
Red Hawk and Thunder Valley are just 40 miles from each other but might as well inhabit different planets.
Gosh maybe some of those 500 “tribe” members who are still living in poverty can go get a JOB! Can’t live on the profits from that casino after all? Too bad.
It’s NOT just the current economy that created the problem, though that’s certainly part of it. But there’s a GLUT of Indian casinos all over the west now. They can’t all succeed by sucking the life out of gamblers. There’s only so many of them out there, even in a good economy. And Red Hawk was way late to the party.
Boo Hoo.
I also don’t feel bad for them. They shouldn’t depend on gaming for their income. We all have to get jobs. They had no problem putting their casino in Placerville, knowing it would hurt Tahoe. Personally I think their casino is the pits. We have way too many of them in California.
Putting the word tribe in quotations is pretty disrespectful.
I wouldn’t expect such acrimony from a “christian”.
Why wish anyone such ill will, especially financially?
I don’t thinks it’s the Casino itself, a lot the United Tribes that have had great success, it’s about what company you let run them and signed the dotted line of who’s, who.
EXAMPLE:Tropicana runs the Hoe and Blue while Harrah’s runs Harvey’s, Harrah’s.
Look at the difference in the money that walks through the door,Harrah’s been holding a huge high roller card game this week with filth wealthy Asia’s.20 to 40 thousand a hand players,you don’t see that at the Hoe or lakeside or Blue.
ANOTHER EXAMPLE IS FOOTBALL TEAMS: YES THERE’S THE SAME AMOUNT PLAYERS BUT THE TALENT WHAT’S MAKE THINGS CLICK AND IT’S NOT ALL ON THE FIELD.
MANAGEMENT IS A KEY TO SUCESS ALONG WITH GREAT COMPANY MORALE, BENFITS,SHARING THE PROFITS AND BONUS TO IT’S EMPLOYEES FOR A JOB WELL DONE.
THERE ARE SOME COMPANIES THAT DO HAVE LOTS PRIDE AND HAPPY EMPLOYEES.
You just don’t find them here in Punity town Tahoe.
Robot, the reason I put the word tribe in quotations is because that particular tribe has been questionable for a long time. I lived down there and the “tribe” had about 12 members in 1980. And the woman who was the tribal leader turned out to be of Hawaiian blood, not Indian! It’s amazing how the tribe grew so big so fast once money was involved.
We have all of their land.
Why can’t they just have a casino ?
I don’t judge people on hearsay. If you have any supporting evidence, link it up.
PS: They are a sovereign people.
$800 to sit at home? These Indians need to go get jobs and quite complaining. They are sucking on California’s liberal unemployment and healthcare benefits too, BS.
Robot: if by sovereign you mean independent or self-governing, you are correct but only with their small population. The other meaning of soverign is as a ruler or monarch and I don’t see how that applies.
The independent (sovereign) groups were nomads roaming around territories no one owned and which might have been used by be several other groups.
http://www.standupca.org/off-reservation-gaming/contraversial-applications-in-process/shingle-springs/final%20draft_noaddress.pdf
You might find that interesting, Robot, but I’m sure you just think it’s more racist white people junk.
Oh, and I have no problem with people opening casinos if they want to. But I don’t want to listen to them whine when those casinos fail. Ain’t my problem.
I’m curious how many members of the ‘tribe’ are actually employed at the Casino? Or are the tribe members just expecting a check from Red Hawk?
And another expense was the $20 mil. Red Hawk had to pay to ED County at the last minute to get final approval. It’s what got Tahoe’s rep., Norma Santiago to support the Casino. The 20mil. was supposed to help mitigate the loss to Tahoe’s economy from Red Hawk’s opening. Did Tahoe ever see any of that money? Sure could use it for our roads!
Prior to the opening of the the casino, there were estimates about how much it would cost Stateline in lost gamblers.
Have there been any reports with real numbers since the Red Hawk opened?
Just curious.
how bout they treat their employees better w/ respect and understanding . the vibe there is horrible like going to jail everyday. no loyalty or respect . it will reflect on the customer service . redhawk is a joke i think lakes is a tumor sucking the life from the indians get rid of them bet profits rise.
As a employee of red hawk & seeing how the “tribe” treat guests & also employees I can see how there sinking..
By the way the Asians walked away 1 to 1 1/2 million ahead,of not losing to it’s host.
Luck is something that can’t be fore-casted with any business.
At this time in our economic reality, they tell anyone to go jump off a cliff ,no matter how good you perform your job skills, there a large vast population of people who over qualify better than you, that work of less, are there for the taking.
If you got a decent employer, you might want try kissing butt a little more than usual.
Prisoner: Just to set the facts straight. The Horizon is run by Columbia Sussex and MontBleu is run by Tropicana Entertainment. CS split into two companies when they bought the Trop in AC, then that side ended up going bankrupt (the Horizon stayed on the CS side, MontBleu was on the Trop side).
Miss the old days of Caesars when the big money would fly. At the beginning, MontBleu owners chose to limit max bet per hand and lost all of those players.
Red Hawk came in to the area think it was going to get alot of people from Tahoe and Thunder valley. I have been there 2 times and it is one of the most poorly run casino i’ve ever seen. Alot of people say they go there for the food. The food sucks.
Red Hawk would have done better had they been able to open when and where they originally planned to. They wanted to be on that Placerville hillside where all the government offices are, right when smoking was being prohibited in bars. As a highly visible, liquor serving casino run by an independent Indian Nation, smoking would have been legal there. They would have kicked butt on the local bars and established themselves. But it didn’t happen, they had to spend millions and wound up in the sticks and in debt. Bummer for them.
Lots of mistakes here. Most significant mis-calculating the level of competition Cache Creek, Thunder Valley and Jackson Rancheria. Too much gaming supply plus Reno, South Shore and hourly flights to Las Vegas from all major airports in Northern California.