Casino news source: SF Gate - http://www.sfgate.com
Indians, Feinstein strike deal that keeps casino from growing
Zachary Coile, Chronicle Washington Bureau
Thursday, May 10, 2007
The Lytton Band of Pomo Indians -- who stirred an outcry by proposing a megacasino with 5,000 slot machines in the East Bay -- have agreed to a deal with Sen. Dianne Feinstein to abandon future plans to offer slot machines and build a Las Vegas-size facility at Casino San Pablo.
The agreement would allow the Sonoma County tribe to continue to operate its 70,000-square-foot casino near Interstate 80 with 1,050 electronic bingo machines -- a multimillion-dollar business that has no major competitors in the East Bay.
The tribe pushed for the deal to end Feinstein's threat to shut down the casino with legislation that would have forced the Lytton band to go through rigorous federal and state approvals to offer even the Class II gaming now played in the casino. The senator agreed to relent, but only if the tribe gave up its dreams of Class III slot machines and erecting a 600,000-square-foot casino.
"This is a win-win," Feinstein, D-Calif., said. "By effectively foreclosing the possibility of a major expansion of the Lytton's San Pablo casino, this legislation ensures that a major Nevada-style casino will not be built in the Bay Area in the near future."
Tribe officials said they were pleased with the compromise, saying it would end the uncertainty over the future of their casino.
"Although it has been a difficult process ... Sen. Feinstein's legislation will allow us to operate the casino for the long term without the threat of closure," said Margie Mejia, chairwoman of the Lytton Band of Pomo Indians, who's also chief executive officer of the casino.
The deal is contained in legislation that Feinstein introduced late Wednesday.
The measure would strike language included in the 2000 Omnibus Indian Advancement Act by Rep. George Miller, D-Martinez, which allowed the tribe to backdate its purchase of an aging San Pablo card club. The backdating effectively let the Lytton band evade federal rules that make it difficult for tribes to build casinos on lands acquired after 1988 when Congress passed the Indian Gaming Regulatory Act.
Under Feinstein's bill, the tribe could continue to offer Class II electronic bingo, but would be barred from using Class III slot machines unless it gets state and federal approval -- an all-but-impossible task in the current political climate. The bill also would block the tribe from expanding the casino's physical structure.
The bill was the result of intense backstage lobbying. Sam Katz, a wealthy Philadelphia businessman who helped the tribe buy the casino and still has a major economic stake in it, lobbied his home-state Sen. Arlen Specter, R-Pa., to urge Feinstein to consider a deal, according to sources involved in the discussions.
The city of San Pablo, which received $22.6 million in payments from the casino in 2003, almost half the revenue in its general fund, also urged Feinstein to find a way to keep those dollars flowing into city coffers.
But Feinstein also heard from the tribe's critics, who believe the Lytton band is already straining the limits of federal gaming law by offering electronic bingo machines that sound, act and play much like slot machines.
Assemblywoman Loni Hancock, D-Berkeley, who led the opposition in the Legislature to the tribe's casino plans, said Feinstein's legislation would ensure the tribe couldn't make another run at a megacasino.
"It allows us to put this controversy behind us," Hancock said. "It allows the existing casino to be there, but it also protects the Bay Area from the massive Las Vegas-style casino that could have been built there. Everything I've read leads me to believe that casinos like this simply suck money out of the urban areas where they are located."
For the tribe, the deal means it can continue to rake in a major share of the Bay Area's gambling dollars. The tribe won't comment publicly about its revenues or profits, but the few statistics it has released suggest it's a major financial success with 520 employees, $90.4 million spent on local vendors since 2003, and $87 million in payouts to jackpot winners.
The tribe's 252 members, many of whom live in Sonoma County, receive a "per capita distribution" -- a share of the casino's profits -- as well as subsidized health care and education and housing assistance. Tribal leaders have talked of buying a 50-acre site in Windsor in Sonoma County to build a reservation, but have not yet done so. |
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