Nearly a year after it opened, Red Hawk Casino is still struggling.
The casino's management company, Lakes Entertainment Inc., said Thursday that operating results at the Shingle Springs site continue to suffer from the poor economy.
Red Hawk is enjoying "solid guest counts, but customer (spending) continues to be less than anticipated," said Lakes Chief Executive Lyle Berman on a conference call with investment analysts. "Results from the slot machines continue to run below our expectations."
Berman made the comments as Lakes announced third-quarter financial results.
The casino, owned by the Shingle Springs Band of Miwok Indians, doesn't comment on its finances. But Lakes' quarterly results this year have provided ample evidence that Red Hawk has underperformed since opening last December.
Earlier this year, Red Hawk cut staffing to around 1,500 full-time equivalent employees, down from 1,750 on opening day. Red Hawk spokesman David Gutierrez said staffing remains in the 1,500 range.
Last month, the casino announced the resignation of general manager Peter Ford. A search is on for a permanent replacement.
Practically the entire gambling industry has felt the effects of the recession. Red Hawk's fiercest competitor, Thunder Valley Casino in Lincoln, imposed layoffs in May.
Berman said greater Sacramento is a "highly competitive gaming market in an unfortunate economic environment."
He added that Red Hawk continues to push harder to bring customers in from the Bay Area, where the casino's brand awareness remains "very low."
"We clearly need a greater exposure in both Sacramento and the Bay Area, but more so in the Bay Area," he said.
Lakes Entertainment, based in Minnetonka, Minn., said operating earnings in the third quarter came to $723,000, compared with a $484,000 loss the year before. Net income totaled $2.3 million, or 9 cents a share, compared with last year's loss of $5.7 million, or 23 cents a share.
Revenue fell to $6.6 million from $8.4 million, mainly because of a one-time gain in revenue last year of $1.8 million.
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Call The Bee's Dale Kasler, (916) 321-1066. Read his blog on the economy, Home Front, at www.sacbee.com/blogs.
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