Facing new competition and a weak economy, Thunder Valley Casino has laid off 5 percent of its employees.

The layoffs at Thunder Valley, long considered one of the most successful casinos in the country, affected fewer than 100 employees, a spokesman said Monday. All of those laid off were part-timers.

"The current situation at Thunder Valley is essentially a reflection of the economy," said Doug Elmets, spokesman for the casino and its owner, the United Auburn Indian Community.

Besides the economy, Thunder Valley is losing some business to Red Hawk Casino, which opened in December in Shingle Springs, said Reno gambling industry consultant Ken Adams.

"Thunder Valley is certainly feeling the impact of Red Hawk," he said.

Elmets said the layoffs won't affect the construction of a hotel, entertainment center and garage at the Lincoln-area casino. The project resumed construction in mid-April after being suspended last fall. At 15 stories tall, the hotel will be a third smaller than originally planned.

Thunder Valley instituted a hiring freeze in January. A month later it replaced four of its top executives and brought in a new team to deal with the implications of the economic downturn.

The recession has hurt the casino industry. In February, gambling revenue at the Reno and Lake Tahoe casinos fell more than 23 percent, according to the Nevada Gaming Control Board. Construction projects in Las Vegas and elsewhere have been put on hold. The fabled Cal Neva resort at Lake Tahoe's north shore has gone into foreclosure.

Station Casinos Inc., the Las Vegas conglomerate that runs Thunder Valley, suffered a 10 percent drop in revenue last year. The company skipped a $13 million interest payment last month, is in negotiations with creditors and says it is contemplating a Chapter 11 bankruptcy protection filing.

The economy, coupled with the new competition, made a slowdown at Thunder Valley practically inevitable, Adams said. But Thunder Valley's overall health isn't threatened, he said.

"I think Thunder Valley in a general sense is fine," he said. He said "regional" casinos like Thunder Valley have generally held up better than destination resorts.

Thunder Valley has been a financial powerhouse since opening in 2003. Early on, its net income was estimated at about $275 million a year, based on management fees paid to Station Casinos.

That made Thunder Valley one of the most profitable casinos in the country, ranking it alongside such elite casinos as the Bellagio in Las Vegas, industry consultants said.

Getting a current read on Thunder Valley's finances is nearly impossible. Station no longer details the fees it collects from Thunder Valley.

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Call The Bee's Dale Kasler at (916) 321-1066. Read his blog on the economy, Home Front, at www.sacbee.com/blogs.