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Gaming Guru

Rod Smith
 

Caesars to Sign Tribal Gaming Deal

18 February 2004

Caesars Entertainment will announce a preliminary agreement today with the Big Sandy Band of Western Mono Indians to develop and manage a $200 million tribal casino near Fresno, Calif., company and tribal officials said Tuesday.

"It's a good deal for Caesars, but it's not necessarily a good deal for Nevada," said University of Nevada, Las Vegas professor and casino industry expert Bill Thompson.

"This will be a big market and it'll be good for Caesars' bottom line, but anything in the north is aimed at Reno" which already is reeling over competition from tribal casinos in Northern California, he said.

Joe Greff, gaming analyst at Fulcrum Global Partners, an independent Wall Street investment research firm, said economics of the joint development are particularly attractive because of the proximity of the new casino to San Francisco. He agreed that it will mean added competition for Reno.

Preliminary plans for the Big Sandy project call for development of a casino on more than 215 acres 10 miles northeast of Fresno in the San Joaquin Valley in central California.

Included in the acreage is a 40-acre parcel of tribal land where the gaming portion of the facility will be located.

The casino property would initially include 250 to 300 hotel rooms, more than 75,000 square feet of gaming space, at least 2,000 slot machines, approximately 20 gaming tables, restaurants, retail shops and meeting and entertainment facilities. The company and the tribe are discussing a brand for the casino.

Caesars Entertainment and the tribe are expected to sign a final development and management contract within the next three months for the casino, the second in Fresno's metropolitan area population of 1.2 million.

Big Sandy Band Administrator Ric Contreras said the tribe picked Caesars Entertainment in order to develop a flagship casino for the central California valley that would lure more gaming customers.

"The tribe already operates a smaller casino outside Fresno and they were looking for a bigger name and management experience and skills," Contreras said.

The Big Sandy Tribe operates the 20,000-square-foot Mono Wind Casino in Auberry, Calif., about 15 miles northeast of the proposed Fresno-area casino. That casino includes 300 slots, six table games, a restaurant and administrative offices.

Contreras said the visibility of the Caesars Entertainment brand name will establish the credibility and visibility the tribal leaders wanted in developing a competitive casino to attract new players to the Fresno area.

"This is an alternative that will be more presentable in this area than the (existing) casino. And it will help (the existing operation) because clustered casinos always tend to do better," he said.

Caesars Entertainment spokesman Robert Stewart said his company expects regulatory approvals and permits before the end of the year and anticipates construction to take 18 months to 24 months.

The management agreement between Caesars Entertainment and the tribe requires the approval of the National Indian Gaming Commission. In addition, the tribe would have to amend its existing compact with the state of California or negotiate a new compact for the new casino project. The project also is dependent on other regulatory approvals and contingencies.

"We obviously believe the California market represents a great opportunity for growth for our company and we believe we are uniquely situated to benefit from development in California," Stewart said.

"We have a large customer base that lives in California and will be able to cross market without any negative impact on our Las Vegas business," Stewart said.

Caesars Entertainment previously announced that it is negotiating development and management agreements with the Pauma-Yuima Band of Luiseño Mission Indians for a casino to be built on Pauma tribal lands in northern San Diego County in Southern California.