Voters Signal Support for Casino Plan - Monday 19th of June 2006

by Howard Stutz

Las Vegas Gaming Wire

CALIFORNIA Tribal casinos in Barstow, Calif., have taken another step toward gaining a footing about 120 miles west of the Nevada border.

Voters in the high desert community last week rejected a referendum that would have stopped two Indian tribes from building side-by-side casinos in Barstow, near the city's well-visited outlet malls off Interstate 15.

The tribes, which have signed agreements with California's governor and are going through additional state and federal OKs, could start building their twin casinos by late 2007 or early 2008 if all of the approvals are met.

"We're about six months into the 18-month process with the (U.S.) Department of Interior," said Tom Shields, a spokesman for BarWest, a Michigan-based company that would manage the casinos.

The federal government needs to approve the land for use as an Indian-owned casino. Also, both houses of the California Legislature need to approve the compacts with the state.

But the rejection of Measure H by Barstow residents by an 81 percent to 19 percent vote was an initial step in showing support for bringing casino gaming to San Bernardino County's high desert.

Backed by a third tribe that is lobbying for its own casino site, Measure H would have killed the proposed casino site off Lenwood Road next to the Factory Merchants at Barstow outlet center.

"What the vote showed was that Barstow residents clearly want the project and the economic benefit it would bring to the community," Shields said. "We think this vote sends a message to lawmakers and others."

In a statement, Barstow Mayor Lawrence Dale said defeating the anti-casino measure will influence California lawmakers, who are scheduled to discuss the tribal agreements this summer.

"This comes at a perfect time as the Legislature is prepared to take up the compacts," Dale said. "Our community's support is no longer in question."

Under a plan unveiled last year, two tribes the Los Coyotes Band of Cahuilla and Cupeno Indians from San Diego County and the Big Lagoon Rancheria Band of Humboldt County would build twin casinos on 47 acres near Barstow's outlet malls.

The tribes signed compacts with Gov. Arnold Schwarzenegger in September that would allow the state to collect one quarter of the profits earned by the casinos. The tribes would be allowed to have up to 2,250 slot machines each with table games.

Barstow officials said the twin casinos are expected to provide 3,700 jobs and add at least $175 million annually to the local economy.

The estimated $160 million joint venture is controversial because it would give two Indian tribes without any ties to the Barstow area land for a casino.

The move, which has been dubbed "reservation shopping" by critics, has happened throughout the United States because it allows Indian tribes without land the same opportunities for economic development as tribes with large reservations.

Shields said that the San Diego tribe has land in far northeastern San Diego County that cannot be developed and that reservation land controlled by Big Lagoon has environmental protections.

A third tribe, the Chemehuevi, which has historic ties to Barstow, is seeking to put a casino east of the proposed Los Coyotes/Big Lagoon site. The tribe and its backers sought passage of Measure H.

The Los Coyotes/Big Lagoon venture is viewed as having strong financial backing.

BarWest includes Marian Ilitch, who operates the MotorCity Casino in Detroit. Her family also owns several Detroit-based businesses, including Little Caesars Enterprises, baseball's Detroit Tigers and hockey's Detroit Red Wings.

Barstow city leaders have viewed the casino project as a way to tap into gaming dollars that might be headed to the three MGM Mirage-run casinos in Primm, which bumps the state line. Through April, an average of 38,000 vehicles a day passed through Barstow on the way to Las Vegas.

Barstow, a Mojave Desert city of 23,575, has been considered a rest stop for drivers traveling between Southern California and Las Vegas. The city's current general fund budget is $10.5 million.

Gaming analysts have given little credence that a casino in Barstow would cut into Las Vegas visitation.

"There is always going to be some marginal competition, but I don't think it is any real thing unless gas prices were to become a major issue and consumers become more concerned," CRT Capital Group gaming analyst Steve Ruggiero said of Barstow becoming a casino community.

MGM Mirage spokesman Alan Feldman, whose Primm casinos rely on drive-in traffic from Southern California, said casinos in Barstow would have little, if any, effect on Las Vegas.

"There are 40 or so casinos before someone ever gets to Barstow," Feldman said. "(A casino in Barstow) would be competition to Primm, but it's just a drop in the bucket compared to what's happening in Southern California."

California's 52 Indian casinos generated almost $6 billion in gaming revenues in 2004. In San Diego, nine tribal casinos operate almost 13,000 slot machines.

Still, despite the competition, Las Vegas gaming revenues have grown considerably. Last year, Strip casinos won more than $6 billion from customers, a better than 13 percent increase.

"The issue of reservation shopping is a far more larger and more serious issue," Feldman said.

"I think there is a policy issue that needs to be straightened out when a tribe with no land travels hundreds of miles away to the Barstow area. I don't know if this is what the (Indian Gaming Regulatory Act) was written for."

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