Tribe Plans to Build Its Second Casino

SACRAMENTO — A wealthy band of Palm Springs Indians announced Monday it will build an $80-million casino in Rancho Mirage to supplement its already lucrative casino operations in downtown Palm Springs.

Meanwhile, a tribe that runs a casino in San Diego County said it is proceeding with plans to host a golf tournament to raise money for the state’s chief gambling regulator, Atty. Gen. Bill Lockyer.

Six days after the landslide passage of Proposition 1A, the fallout continues with the first announced plans for a new casino within relatively short driving distance of Los Angeles.

At a news conference Monday morning, the Agua Caliente Band of Cahuilla Indians announced that it will build its second casino on a choice 40-acre site off Interstate 10, near affluent Rancho Mirage, home to former President Gerald Ford.

Unlike the nearby Twentynine Palms band, the Agua Caliente band plans to finance the casino to open next spring on its own. The Twentynine Palms band said last week that it has signed a letter of intent with a firm operated by New York real estate and gambling mogul Donald Trump to finance an expansion of its now modest casino.

Agua Caliente Chairman Richard Milanovich dismissed his potential competitor, Trump, saying, “I seriously doubt he’ll follow through with his plan, because it’s not very often that he follows through.”

The new Agua Caliente casino will start with about 750 Nevada-style slot machines. Each device can be expected to net the tribe $200 a day, or more than $54 million a year. Additionally, the tribe will have blackjack, poker, high-stakes bingo and off-track betting on horse races, all of which are permitted under the deal allowed by Proposition 1A. The measure was the result of a deal struck by Gov. Gray Davis and California’s tribes.

“Remember, folks,” Milanovich said, “we live here too. Our children live here. We want something we can all be proud of in the end.”

The 240-member tribe owns much of Palm Springs, including the downtown location of its existing Spa Hotel & Casino, which has 1,150 video slot machines. Once the new casino is operating, the tribe will remodel its downtown casino and proceed with other development.

The announcement in Palm Springs on Monday follows voter approval of Proposition 1A by a 64.5%-35.5% margin. More such announcements are expected in coming days.

Of the state’s 107 tribes, nearly 40 operate casinos. Several have expansions in the works, and experts predict that 52 tribes will have casinos of varying sizes in coming years.

The deal that Davis struck permits each tribe to operate two casinos, with a cap of 2,000 slot machines. Davis says the compact will permit California tribes to have a total of 45,000 slot machines, up from the current 19,000 video gambling machines now on state Indian reservations.

However, the nonpartisan legislative analyst’s office concluded that the compact, which is ambiguous in key sections, could permit tribes to operate as many as 113,000 of the highly profitable devices.

As Agua Caliente leaders unveiled their drawings, the Barona group of the Capitan Grande Band of Mission Indians in San Diego County was preparing to host Atty. Gen. Lockyer at what it bills as “The First Annual California Attorney General’s Invitational” golf tournament and fund-raiser next month at the Del Mar Country Club in San Diego.

It’s not unusual for tribes to spend money on politics. Since 1998, California’s casino tribes have spent about $100 million on campaigns, far surpassing any interest group in California.

However, the tournament-fund-raiser could place Lockyer in a difficult position. As attorney general, he oversees the Department of Justice’s Gambling Control Unit. The unit will have at least some role in the oversight of tribal casinos. And the Baronas could pose some difficulty for the state regulators.

Under the compact, the state Department of Justice regulators can make recommendations to tribes about the suitability of casino executives. The Baronas have a contract with Inland Entertainment Corp. to help operate and market their casino.

Inland Chairman L. Donald Speer was arrested on grand theft charges in 1989 in connection with his involvement in a prior company that managed the California Bell Club, a now-shuttered card room in the city of Bell. The charges were dismissed. But regulators from at least one state--Wisconsin--recently inquired into Speer’s background, when an associate of Speer’s attempted to gain a contract with a tribe in Wisconsin, court records show.

Speer could not be reached Monday. Lockyer’s spokesman, Nathan Barankin, declined to comment on Speer’s suitability to be involved in gambling in California. But Barankin defended Lockyer’s decision to allow the Baronas to raise money for him.

“Unless you’re independently wealthy, you need to raise money to run elections,” Barankin said. “ . . . I don’t know of anyone familiar with the attorney general who is confused about where he stands on issues of importance. Campaign contributors do not affect the attorney general’s policy views or regulatory responsibilities.”

Invitations to the April 3 fund-raiser offer donors the opportunity to be a “co-sponsor” of the tournament for a $15,000 donation to Lockyer. A “celebrity sponsor” donating $5,000 to $25,000 would have an opportunity to play in a foursome with a celebrity. The invitation lists several sports figures who will participate.

“It is legal but certainly is unseemly,” said former acting Secretary of State Tony Miller, a campaign finance reform advocate. “The regulator shouldn’t be tapping the regulated for campaign contributions. But this is the way business is done, and this is why the law needs to be changed.”

Barona spokesman David Baron said he doubts that the fund-raiser will affect Lockyer’s views.

“We’ve always supported candidates we agree with,” Baron said. “We haven’t always seen eye to eye with Mr. Lockyer. But we’ve always considered him a straight shooter.”