The Soboba Band of Luiseno Indians wants to build a 300-room hotel, casino, water park and outlet mall near Hemet but the project stands literally and figuratively at a crossroads.

The tribe is deciding whether it should approach a Nevada-based gaming company for its proposed project at the corner of Highway 79 and Domenigoni Parkway or use consultants or in-house experts to manage the project.

Located 15 minutes from the closest freeway, the casino project must draw visitors willing to make the trek to a less-convenient location. It also faces competition from Cabazon's Casino Morongo and Pechanga Resort & Spa near Temecula, as well as other casinos expanding in Highland, northern San Diego County and the Coachella Valley.
 
2002/The Press-Enterprise
Patrons visit the west wing bar area at Casino Morongo in Cabazon. The Morongo Band chooses to manage its projects in-house, drawing from the expertise of employees and tribal members.

"Whoever takes the Soboba project will take a good look at the books, the demographics and the market before they step forward," said Bill Eadington, professor of economics and director of the Institute for the Study of Gambling and Commercial Gaming at the University of Nevada, Reno.

 
In 1998, some Nevada casinos opposed the California initiative that allowed Las Vegas-style gaming at Indian casinos. Those same companies who fought Indian gaming are now partnering with Indian nations to help them build and run increasingly Vegas-like gaming complexes.

The Twentynine Palms Band of Mission Indians, the Rincon Band of Luiseno Indians and the Pauma Band of Luiseno Indians have entered into partnerships with Trump, Harrah's and Caesars to develop casinos in Twentynine Palms and in northern San Diego County.

These smaller tribes decided to work with major casino companies for several reasons, said Michael Lombardi, chairman of the gaming commission for the Augustine Casino near Coachella.

The Nevada gaming companies know how to market the resort, what machines to put on the casino floor and how to run restaurants and conference centers, Lombardi said. They also bring a brand name and credibility to a project, which is key when trying to get financing, Lombardi said.
 
Peter Phun/The Press-Enterprise
The Soboba Band's plans for a 300-room hotel, casino, water park and outlet mall near Hemet will face competition from the Morongo Band's resort, shown here under construction, near Cabazon.

Accounting and marketing are key skills, industry experts said. Indian casinos are subject to state and federal gaming practices that impose strict controls on cash-rich casinos.

Marketing expertise is increasingly important because Indian casinos are competing with each other and with Las Vegas for a share of the Southern California gaming market, estimated at $5 billion a year, Eadington said.

The Rincon Band of Luiseno Indians chose to partner with Harrah's because the tribe had no experience running or marketing a casino and needed the Harrah's name to get its financing, said tribal chairman John D. Currier.
"They're the professionals. We're not," Currier said.

By partnering with Harrah's, the tribe got the gaming company's expertise as well as access to its database of customers. Normally, a small Indian casino can draw customers from up to 50 miles away, but with its ties to Harrah's, Currier said they can draw customers from 150 miles away.

Considering the increased competition from other tribes and the fact that the tribe is 18 miles away from Interstate 15, Currier said the partnership with Harrah's was the best move the tribe could make.

The tradeoff is a loss of control. By hiring a casino company, tribes give up a share of their profits and say in managing the project, said Robert DiSalvio, executive vice president of marketing for Foxwoods Resort Casino in Connecticut, one of the largest casinos in the country.

Foxwoods is owned by the Mashantucket Pequot tribal nation. When the casino opened in 1986, the tribe hired industry experts rather than lose control of the casino, DiSalvio said. Now Foxwoods includes six casinos, 6,400 slot machines, 350 gaming tables and hosts 40,000 guests a day. By comparison, California casinos are capped at 2,000 slot machines.

Outside companies have to take a substantial cut, usually 30 percent a year, to recoup their investment in time and money, said I. Nelson Rose, a Whittier Law School professor and a leading expert in gaming law.

Federal regulations require the tribes to renegotiate their contracts with outside companies every five to seven years, Currier said.

Exactly how much Rincon pays Harrah's or Twentynine Palms pays Trump is kept private.

Larger tribes, including the San Manuel, Pechanga, Morongo and the Agua Caliente Band of Cahuilla Indians in Palm Springs, chose to manage their projects in-house, drawing from the expertise of their employees and tribal members to oversee their growth.

That expertise was developed over the past decade by running bingo operations, sending workers through management courses at the University of Nevada, Reno, and hiring people who know how to run a casino, restaurants and other aspects of the business, according to casino managers.

"The simple rule of thumb is, if you want to hold your destiny in your hands, you better hold operations in your hands," said Deron Marquez, chairman of the San Manuel Band of Mission Indians.

Reach Adam Eventov at (909) 375-3731 or aeventov@pe.com