Legal Victory Brings More Slots to Local Casinos
By BRAD GRAVES San Diego Business Journal Staff 10-26-09
A summer court decision combined with state action this month gives two San Diego County casinos the opportunity to expand their gambling businesses 25 percent.
Management at Harrah’s Rincon and Valley View casinos — which are both near Valley Center in North County — say they plan to add 400 and 428 machines, respectively.
“We were always waiting for this day to come,” said Bruce Howard, general manager of Valley View.
Government red tape checked the growth of both casinos, run by the Rincon Band of Luiseno Indians and the San Pasqual Band of Mission Indians.
Both tribes have deals with the state to operate up to 2,000 slot machines. But neither was licensed to have 2,000 machines. The state said it had a limited number of licenses to issue. By the time the casinos grew to about 1,600 slot machines, the state said it was out of licenses.
Tribes from Northern and Southern California took the state to court over the issue, and prevailed. In response, the state held a license draw Oct. 5, assigning 400 more licenses to Rincon and 428 to Valley View. Sacramento set an Oct. 12 deadline for tribes to pay fees of $1,250 per license. The state plans to announce license recipients in November.
With additional licenses, Valley View will be able to increase the number of Las Vegas-style slot machines on its gaming floor by 428, bringing its machine count to 2,000. The venue plans to bring its casino up to full capacity by mid-November, says Howard.
Harrah’s Rincon will be able to add 400 slot machines to bring its total to 2,000. Harrah’s executives said they plan to make the increase “over the next year.”
Larger casinos are capable of bringing in hundreds of millions of dollars of revenue a year. Before the recession, the Business Journal estimated that San Diego County’s 10 American Indian casinos did $2 billion in business annually.
Slot Shopping
Valley View’s Howard says one top-of-the-line slot machine costs $15,000 to $20,000. Adding new machines to the floor will be an $8 million investment, he says. San Pasqual’s gaming arm will buy the machines with an equipment loan that uses the machines as collateral.
Harrah’s executives say they expected to make a $6 million investment and did not discuss financing.
With its new, Las Vegas-style slots, Valley View will retire hundreds of bingo machines. Also called Class II machines, the devices are harder to play, slower and not as popular with customers, gaming executives say.