Photos Loading
previous next
  • Red Hawk Casino's profits have grown.

  • An elaborate chandelier hangs over patrons heading to the gambling floor in Red Hawk Casino in Shingle Springs. A deal has been reached to bring the troubled gaming establishment closer to a much-needed financial overhaul.

California eases payments by Red Hawk Casino

Published: Friday, May. 31, 2013 - 12:00 am | Page 6B
Last Modified: Thursday, Jul. 18, 2013 - 5:05 pm

Red Hawk Casino, underperforming since the day it opened and struggling to pay its bills, moved a step closer Thursday toward gaining financial relief.

Gov. Jerry Brown signed into law a new gambling compact that reduces the revenue the state will collect from Red Hawk and its owner, the Shingle Springs Band of Miwok Indians. Brown signed AB 1267 by Assemblyman Isadore Hall, D-Compton, which ratified the new compact the governor signed with the tribe last November.

Despite the governor's signature, the Shingle Springs casino isn't out of financial trouble yet. The tribe has to restructure $500 million in debt owed to private creditors before the new state compact takes effect.

The new compact recognizes the dire financial issues confronting the casino and tribe. The document says Red Hawk "cannot currently or in the coming years generate enough revenue for the tribe to cover its financial obligations."

Since 2011, the tribe stopped making principal payments on a $66 million startup loan from Lakes Entertainment Inc., the company that operates Red Hawk. Most of the rest of the tribe's debt is held by bondholders who financed construction of the casino, which opened in late 2008.

It's not clear if the Shingle Springs tribe has made any headway in renegotiating its debt; tribal officials couldn't be reached for comment Thursday.

Lakes Entertainment's chairman, Lyle Berman, told investors earlier this month that his company is "continuing to have conversations" with the tribe about debt restructuring.

The tribe pays the state up to 25 percent of Red Hawk's slot-machine winnings. That's apparently more than any other tribal casino. The new compact would reduce the payout to 15 percent.

Call The Bee's Dale Kasler, (916) 321-1066. Follow him on Twitter @dakasler.

© Copyright The Sacramento Bee. All rights reserved.

Read more articles by Dale Kasler



Sacramento Bee Job listing powered by Careerbuilder.com
Quick Job Search
Sacramento Bee Jobs »
Buy
Used Cars
Dealer and private-party ads
Make:

Model:

Price Range:
to
Search within:
miles of ZIP

Advanced Search | 1982 & Older

TODAY'S CIRCULARS