Reported by the Sacramento Business Journal
Wednesday, July 2, 2008
Gov. Arnold Schwarzenegger has apparently signed a compact Tuesday with the Shingle Springs Band of Miwok allowing the tribe up to 5,000 slot machines for their Red Hawk Casino which will run through to 2029 and allow the slot machines in one of the richest compact splits with the state so far.
Red Hawk Casino is under construction just off Highway 50, the main route between the Bay Area and South Lake Tahoe casinos and is carded to open with 2,000 slot machines by the end of this year. The tribe’s partner is Lakes Gaming Inc. (Nasdaq: LACO).
Under the new compact, the tribe agrees to share revenue with the state on a sliding percentage of net win, ranging from 20 percent to 25 percent, from the slot machine games. The tribe will pay the state 20 percent of net slot winnings on the first $200 million in revenue and 25 percent for all revenue over and above $200 million.
Many older compacts are structured so that the tribe pays the state a set amount for the right to have the game, and the tribe keeps all the winnings.
The Shingle Springs Band had an existing 1999 compact that allowed it 300 Class A slot machines, and it won the right to operate an additional 75 Class A slot machines last summer in a state drawing. The casino managers had said they would open the casino with 350 Class A machines and 1,650 electronic gaming devices, often called bingo-style electronic games.
Class A slots are real slot machines where the player is against the machine. Bingo games are networked so a player and other players are competing for a prize. Class A machines are faster paced and much preferred by gamblers.
“This compact is a good deal for the state, the local community and the tribe,” Schwarzenegger said in a press release. “The agreement will provide significant revenues to the state, protections for both workers and patrons, and for mitigation for the off-reservation impacts of gaming.”
The Shingle Springs Band tribe also agreed to:
- Prepare an environmental impact report for any new expanded gaming;
- provide an annual independent audit and allow a state compact compliance review;
- resolve employee, county and patron disputes through binding arbitration; and
- meet or exceed the building codes for any new construction.
