River Rock Casino woes mount as revenue is cut in half
Losses at River Rock, Sonoma County’s first Indian casino, are even greater than anticipated, with revenues down 50 percent since the opening of Graton Resort and Casino next to Rohnert Park, according to tribal leaders.
The Dry Creek Rancheria Band of Pomo, which owns River Rock, blames competition from the bigger, glitzier casino to the south for cutting business in half at the older, more remote facility near Geyserville. Tribal leaders say the Graton casino has caused them to default on payments to investors and miss a $3.5 million payment to Sonoma County.
“We’re right around 50 percent, maybe. Sometimes we fluctuate a little less (or) a little more,” Dry Creek Chairman Harvey Hopkins said of the drop in revenue at River Rock since the Graton tribal casino opened in November.
He acknowledged there is no plan or timetable to make good on a missed interest payment to bondholders that was due in May, nor on the overdue $3.5 million annual payment owed Sonoma County since July, which mostly goes to pay for law enforcement costs associated with River Rock.
“The casino is still trying to market to attract the customer base again,” Hopkins said last week. “We still haven’t recovered. It’s probably going to take a little longer for us to really find the balance.”
The missed interest payments on the more than $140 million owed to River Rock bond holders have frustrated investors who have been left in the dark and watched the value of their bonds plummet with no assurance they will be repaid and a possibility they will end up with a fraction of what they are owed.
County officials expect to meet with tribal leaders in the next two weeks to discuss the delinquent payment to the county, which was part of a negotiated $100 million, 20-year agreement the tribe made six years ago to offset the impacts of the casino.
The total payment was later reduced to $75 million, but the county still is expecting the tribe to honor the agreement, said north county Supervisor Mike McGuire.
“The tribe back in 2008 committed itself to pay for off-reservation impacts, and the county expectation is that the casino is going to live up to that promise,” McGuire said.
He said the vast majority of the tribe’s payment goes to law enforcement patrols for the community that surrounds the 12-year-old casino, located about 4 miles from Geyserville on a hillside overlooking the Russian River and Alexander Valley, on the tribe’s historic rancheria.
Two years ago, casino officials said River Rock was attracting 1.3 million visitors annually.
Hopkins said the number of clients at his tribe’s casino may be down 40 to 50 percent, a drop that has sharpened since the opening of the Graton Resort and Casino on Nov. 5.
Greg Sarris, chairman of the Federated Indians of Graton Rancheria, did not return a call requesting comment. Lori Nelson, a spokeswoman for Las Vegas-based Station Casinos, the Graton tribe’s business partner, declined to comment.
McGuire said that despite the drop in visitors to River Rock, “It’s still more than Alexander Valley and Geyserville ever saw prior to the casino being constructed. Casino operations continue today, which is why the impacts of that gaming facility need to be mitigated.”
He said the number of deputies assigned to the area remains the same, despite the tribe’s “nonpayment.”
Hopkins’ position is that the tribe committed itself to paying the county contingent on an expanded casino and resort hotel being built. The project was shelved indefinitely when the recession hit.
He said he suggested a lower payment to the county recently, but “they probably didn’t like my suggestion.”
“I think the tribe has the ability to pay. It may take a little longer, especially when we don’t have the revenue from that big, giant resort we were going to build,” Hopkins said.
Hopkins also would like something else from the county - approval for a lit “casino” sign that can be seen from Highway 101, as well as loosening of alcohol restrictions that would allow the casino to serve patrons on the gambling floor and not just at the bar. He also wants to serve alcoholic beverages later than 11 p.m.
Hopkins said Graton has “a nice, big old sign that says ‘casino’ on it,” as well as the less-stringent alcohol restrictions, and it’s only fair that River Rock should have the same.
“Both of those items are nonstarters,” McGuire said. “Unfortunately, at this time, the county is unable to compromise on any additional issues.”
Hopkins said when it comes to the money owed bondholders, the tribe has a team of consultants and lawyers prepared to meet with a majority of the investors to discuss a resolution for the late payments.
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