California Governor Jerry Brown last month signed a new gaming compact with the Shingle Springs Band of Miwok Indians, owners of the struggling Red Hawk Casino, that reduces the share of the profits the tribe pays the state from 25 percent to 15 percent.
Gaming experts say it is almost unheard of for a governor to revise an existing tribal state gaming compact to make it easier for a tribe. However, the compact requires that the tribe also reach deals with creditors and its management company, Lakes Entertainment, for about $450 million. It also lowers the maximum number of slots the casino can have from 5,000 to 3,000. The legislature’s approval also is needed. The tribe already reached an agreement with El Dorado County to lower its payments from the $5.2 million annually it currently pays.
The casino opened in 2008, but has not proven very successful for the tribe. It has also been on the losing end of a lawsuit by former partners, and was recently ordered to pay $30 million for breach of contract. Federal law requires that a tribe, not the state, be the prime beneficiary of a casino, Brown noted in signing the document.
Currently, the tribe earns $6 million a year from the casino, which is $100 million less than projections. The casino profits pay each tribal member $800 a month. Yet, the casino pays the state $30 million a year.