River Rock Casino taking hit in wake of Graton casino opening

CLARK MASON
THE PRESS DEMOCRAT

River Rock, Sonoma County's first tribal casino, has seen its revenues plummet since the opening of the Graton Resort and Casino in Rohnert Park, forcing a significant reduction in employees along with cuts in payments and benefits to its tribal members.

The competition from Sonoma County's newest casino appears to be every bit as tough as River Rock and its owners, the Dry Creek Rancheria tribe, anticipated prior to Graton's debut in November.

Dry Creek Tribal Chairman Harvey Hopkins acknowledged the 12-year-old casino has seen more than the 30 percent drop in revenue that was anticipated prior to Graton's opening.

Although he declined to be more specific, other tribal officials indicated the situation was dire.

"Graton is knocking the crap out of us. Forty to 45 percent of our revenue is gone," one source with knowledge of the casino's finances said last week.

The last full year River Rock's casino revenue was publicly reported was in 2010, when it was $124 million.

Hopkins said approximately 100 employees have left River Rock - which once had more than 600 workers - to go to work at the bigger, glitzier Graton casino. "We're still looking at the possibility of not rehiring or filling those vacancies," he said Monday.

And the Dry Creek tribal government, which once had nearly 60 employees, is being reduced "by 70 percent," according to Hopkins.

"We've reduced staff down to a half-dozen people, maybe a little bit more," he said of the tribal employees who were in public works, information technology, human resources and finance.

Tribal members and families also are seeing a hit to their income.

Per capita payments, approximately $600 a month from casino profits that the tribe pays to its 640 members over the age of 18, are being reduced in half, to $300 a month.

But tribal members can apply for as much as $200 monthly in food and gas allowances to help offset the cut in their monthly "per cap."

Analysts predicted last year there would be a hit to River Rock, which opened in 2002, and even to other smaller Indian casinos in Mendocino and Lake counties as a result of Graton attracting some of their customers.

"It was somewhat predictable that Graton would have a significant effect on the local market, particularly because they dedicated an enormous amount of resources to their casino, and the other casinos in the general vicinity don't have the same resources or appealing location," said Doug Elmets, who represents five tribes, including those that operate Thunder Valley and Jackson Rancheria casinos closer to Sacramento.

He said the Graton casino, which is owned by the Federated Indians of Graton Rancheria and managed by Station Casinos of Las Vegas, is able to market and advertise in a way that neighboring casinos can't match.

"They are applying shock and awe in that marketing," Elmets said.

Greg Sarris, chairman of the Graton Rancheria, did not immediately return a call from a reporter Tuesday afternoon.

The $800 million, 340,000-square-foot Graton casino and resort, with its 3,000 slot machines and 200 table games, dwarfs River Rock's 61,000-square-foot facility, with 1,200 slots and 20 tables.

The Graton casino, closer to the heart of Sonoma County, Highway 101 and the Bay Area population center, is designed to handle big crowds with 5,700 parking spots.

River Rock, more than 30 miles to the north in vineyard-laden Alexander Valley, is situated off a winding, two-lane road on a high bluff overlooking the Russian River. It has 1,600 parking spaces.

Hopkins said there are only so many people who gamble in Sonoma County "and a lot of them are in that general area of the new casino. So of course our drive-ups are going to end, some of it, because they're coming that way. Now, they just drive across the street if they want to."

The two gambling halls are in sharp contrast to each other, not only in location but also in appearance and atmosphere.

River Rock's tent-like dome structure has little daylight penetrating its dark, cavernous interior.

Graton's exterior combines glass, stone and wood elements and even a shimmering waterfall. Inside, the initial impression is one of vastness and comparative airiness, provided in part by a central skylight, unlike typical casino designs that block out any sense of day or night.

"It's open. It's light. They did a nice job," said Yvonne Pegoraro, a retired network administrator and artist from Sebastopol, who on Friday afternoon was reading an e-book at Starbucks in the Graton casino food court while her partner played the nearby slot machines.

Although she visits a number of casinos, "I won't walk into River Rock. It's dark and smoky and not inviting to me," she said.

Colleen Cox, a Petaluma postal employee who was playing the slots at Graton on Friday, said she goes to a number of North Coast casinos. "I hit 'em all," she said.

She joked that Rohnert Park is "a shorter drive home when I lose."

Cox said she's noticed a drop-off in customers at both River Rock and Sho-Ka-Wah casino in Hopland since Graton opened.

Sho-Ka-Wah officials did not return calls from The Press Democrat.

"I still go to River Rock," Cox said. "There's more chances to win the car. There's not as many people there."

Tony Hernandez of San Francisco, who was headed in to gamble at the Graton casino Friday, said he goes several times a month to the Rohnert Park gaming venue. "Here you get a nice dinner," he said. "It's more like a casino."

Hernandez said at Graton, it's easier to get in and out, whereas River Rock is "really far, really inconvenient."

But on Friday afternoon, there were still faithful patrons to be found at River Rock, which advertises "looser slots, no ATM fees, $5 blackjack."

Some River Rock patrons said the machines seem to take your money even faster at Graton, and there's also a buffet at River Rock, which isn't offered at the other casino.

Some said Graton was "snobby" and they disliked the dress code that prohibits baseball caps.

"I think they're tighter over there (at Graton)," said one regular River Rock patron, who would only identify himself as "Bob," a retired machinist.

He said River Rock still draws a crowd for some promotions, especially car giveaways, although he acknowledged Graton is giving away even more prizes.

In February, for example, the Graton casino gave away a new car every day as part of a well-publicized promotion.

Although the Graton freebies slowed this month to two new car giveaways per weekend, River Rock is awarding one car each weekend in March.

Hopkins was reluctant to discuss the amount of the decreased revenue at River Rock since Graton opened.

He said the tribe is still committed to paying off the bonds that were issued in 2011 to refinance $200 million in casino debt incurred for construction projects and other costs.

He said about $50 million of that debt has been whittled down.

"We've done remarkably well in paying down our debt, so I think our investors are quite satisfied," he said.

And he said the annual $3.5million in payments the tribe makes to Sonoma County as part of a revenue-sharing agreement are not changing "at this time."

But with revenue down, he said expenses are being decreased, especially for tribal government.

Hopkins said the tribe will be vacating the modern offices it has occupied for several years near Charles M. Schulz-Sonoma County Airport.

"We're going to move out of this building and move onto the Rancheria," he said during an interview in the tribe's boardroom, where the walls have historic photographs of tribe members dating back more than a century.

The tribe last month announced it was ending payments to educational programs for members, including financial rewards for good report cards and extra-curricular assistance. It also reduced tuition assistance amounts.

One thing that isn't on the table is decreasing the salaries of the five-member board of directors, including the $100,000 a year that Hopkins makes.

"The board members have worked really hard for the small incomes they get and those tribal members that feel like the boards are overpaid, they ought to try working these hours," Hopkins said. "It's not something that I would wish on anybody."

You can reach Staff Writer Clark Mason at 521-5214 or clark.mason@pressdemocrat.com.

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