Cal still ‘golden’
for new casinos

Jan 30, 2007 3:45 AM

While California over the past five years has evolved as the nation’s most fertile state for new casinos, the region north of San Diego has established itself as a hotspot for Las Vegas-style casino resorts.

For instance, casinos overflowing with slot machines and Nevada-style table games have sprouted along the San Luis Rey River corridor up to Palomar Mountain and Lake Henshaw — once great outdoor country for hikers, campers and fishermen.

About 30 miles east of Escondido, the Santa Ysabel Band of Diegueno Indians is putting the finishing touches on its casino overlooking Lake Henshaw.

"You are going to be amazed when you look at it," Santa Ysabel Chairman Johnny Hernandez told the North County Times. "It’s a great view."

The 700-member tribe plans to open its casino in March. When it opens, it will join four others in the area on the Pala, Pauma, Rincon and San Pasqual Indian reservations.

The casino will compete for customers with others closer to major highways. That’s why the tribe intentionally kept it small, at about 35,000 square feet and 349 slot machines. Keeping the number of machines under 350 will allow the tribe to continue to receive stipends from the revenue-sharing trust fund from wealthier tribes’ casinos.

Hernandez said they chose the remote setting for its scenic beauty. His tribe hopes to capture some of the thousands of travelers who visit the historic mountain community of Julian and the surrounding countryside looking to get away from "city life," Hernandez said.

"We made it our casino," Hernandez said. "We didn’t want to make it Harrah’s."

Harrah’s is a partner with the neighboring Rincon Band of San Luiseno Indians in a huge resort casino with a high-rise hotel.

While Santa Ysabel begins its venture into gambling, two other tribes in the area have already negotiated deals with the state, allowing them to build larger casinos with more than 2,000 slot machines each. The Pala Band of Mission Indians owns a large-scale casino hotel and resort 15 miles north of Escondido.

The Pauma Band of Mission Indians a few miles east of the Pala Indian Reservation announced last year that it will build a $300 million casino and hotel with the help of its partners, the Mashantucket Pequots of Connecticut, which owns and operates Foxwoods.

Hernandez said he’s not worried about competition. Most tribal leaders say that having a variety of casinos attracts visitors to the area, benefiting all.

Alan Meister, an economist with the financial consulting firm Analysis Group, said that San Diego County tribes have reason to be optimistic. San Diego, Riverside, Orange and Los Angeles counties have a combined population of about 18 million.

"There are definitely going to be competition effects," Meister said. "That’s why you see all the advertising. They want you to choose one over the other, but there are a lot of customers to go around."

In his annual Indian Gaming Industry Report, Meister estimated that Indian gambling revenues grew about 24 percent, from $5.8 billion in 2004 to $7 billion in 2005. There are 57 Indian casinos in California — including eight in San Diego County — with about 60,000 slot machines.

"Based upon the continued statewide growth of Indian gaming, California does not seem to be near its saturation point," Meister wrote in his report. "Thus, an increase in the supply of gaming may continue to yield positive returns."