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Editorial: A new casino, more questions

Dec. 20, 2008 The Sacramento Bee

This page has consistently opposed gambling, whether the state lottery or Indian casinos. The reason is simple. Gambling preys on the poor and the desperate. Sure, for some it is a harmless and enjoyable diversion, but for others it can be dangerously addictive. Rather than creating new wealth, it tends to move money around from one form of entertainment – movies, concerts, amusement parks, what have you – to another: gambling.

That said, it's impossible to ignore the excitement and the economic jolt in the arm the opening of the Red Hawk Casino has provided for this region. California's newest Indian casino employs 1,750 people, 46 percent of them residents of El Dorado County. These are not all low-wage jobs. They range from busing tables to programming computers, from dealing cards to managing hotels. The jobs come with health benefits and paid vacations, perks that can't be taken for granted in our sagging economy.

Businesses near the new casino hope to benefit too. Everything from grocery stores to gas stations to ski resorts expect a boost. So do local vendors. Red Hawk needs everything from food to light bulbs, toilet paper to tablecloths.

The state gets something as well. The Shingle Springs Band of Wintun Indians, owner and operator of the casino, has negotiated a compact which requires the casino to pay California government 25 percent of the net win, the most generous share of profits the state has received from any of its other Indian gambling deals. After years of fighting the casino, El Dorado County officials have struck a local revenue sharing arrangement as well. The county will receive $5 million a year to help pay the increased cost for police, fire and other services the casino will generate.

Some impacts can never be mitigated. The community around Red Hawk has lost the quiet of what was once a rural existence. Residents will have to get used to longer backups on Highway 50. A new interchange has been built for the casino, but construction has not yet begun on HOV lanes to ease congestion on the freeway.

The big question remains, can gambling revenues continue to grow in a deepening recession? Historically, gambling has been more resistant to recession than other businesses, but the nation's current massive downturn is beginning to challenge even that industry. Nevada casinos have experienced a serious slump, with revenues falling substantially for the last 10 straight months. The recession accounts for part of the downturn, but competition from California's Indian casinos are also having a big impact.

But how much more gambling can California and the Sacramento region absorb? In addition to Red Hawk, there are three other big Indian casinos within easy driving distance of Sacramento: Thunder Valley near Roseville, Cache Creek in Yolo County and Jackson Rancheria in Amador. Thunder Valley has already announced plans to scale back an expansion it planned earlier this year, a sign that a limit may have been reached.

Red Hawk Casino is betting that it can survive the slump and compete successfully against other gambling palaces whether in Nevada or California. Judging by the size of the crowds that have descended in the first few days, Red Hawk has been dealt a good first hand.



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