What do you do when you get your act together? You take it on the road, of course!
That’s what Station Casinos did in a big way when it opened the Thunder Valley Casino near Sacramento, California last month.
Even though it’s been open for less than two full months, Thunder Valley is being touted as among the most lucrative of California’s 54 casinos. Station has a 7-year contract to manage the casino for the United Auburn tribe in Lincoln, Calif.
According to Station estimates, the tribal casino will generate $65 million to $75 million in first-year management fees, which represent 24 percent of the casino’s revenue.
By doing the math, the projections imply a yearly cash flow of $275 million to $300 million, which, if correct, would make Thunder Valley a bigger revenue producer than every Nevada mega resort, except for the Bellagio.
"Thunder Valley’s success has been phenomenal and”¦ is on par with any of the best hotel-casinos in Nevada," said Glenn Christenson, Station’s executive vice president and CFO. He added that the casino opened with about 1,900 slot machines, but could easily handle 3,000 slots with "little or no" eroding of gaming win per slot machine.
Getting those additional slots may not be easy, given California’s political climate that has been clouded by the recall of Governor Gray Davis.
But Station plans to proceed over the next few months with the installation of amenities to Thunder Valley, including a bingo parlor, high-stakes VIP game room, specialty restaurants and more table games.
If those kinds of amenities sound familiar, they should: Those are the cornerstones of Station’s successful "locals-oriented" casinos in the Las Vegas area.
"The Native American market is essentially a locals market, and we’re recognized as the leader in the locals casino market," said Lorenzo Fertitta, Station’s president. "We’re purposely aligned for building and managing regional entertainment facilities, usually within 150 miles of high population areas."
Christenson said Station is "focused" on contracting to build and manage casinos in California for other tribes.
"We’re going to be a big player in Native American gaming," Christenson said. "We’re excited about our prospects with ”¦ Native American franchises."
Station’s next tribal project will be a casino for the Federated Indians of Graton Rancheria in Sonoma County, California.
Christenson predicted the casino will be "up and running in two to four years."
Station’s commitment to Native American gaming won’t diminish its role in the Las Vegas gaming market, Christenson said.
"Our economy is one of the most resilient in the country, and Clark County is the fastest growing county in the nation," Christenson said. "Plus, the regulatory, political and tax climates in Nevada are so superior to other jurisdictions."
Christenson said that the local economy has grown by about 7,000 new residents a month, many of whom are landing in the northwestern section of the city.
"Summerlin has been the No. 1 planned community in 10 of the last 11 years," Christenson said. "We’re very excited about Summerlin."
Summerlin will be the site of Station’s next locals project, Red Rock Station, which has been earmarked for 73 acres at Charleston and Interstate 215.
"It’s the best demographic area in the entire Las Vegas Valley," Christenson said. "We don’t have an operation in the area, and it’s a fantastic location."
Although the company is still evaluating the "size and scope" of the property, construction on Red Rock Canyon is expected to begin in mid 2004, with an opening targeted for the second half of 2005, officials said.