The company managing Red Hawk Casino reported improved results today from the struggling Shingle Springs property.
Lakes Entertainment Inc. of Minneapolis said its management fees from Red Hawk grew by $1.1 million in the second quarter, compared to a year ago. The fees are based on profitability of the casino.
The disclosure was part of a quarterly earnings report.
Under a deal announced last month, Lakes plans to surrender its management contract at the end of the year. The casino's owner, the Shingle Springs Band of Miwok Indians, has pledged to retire a $66 million Lakes loan with a $57 million lump-sum payment. The tribe stopped making principal payments on the loan in 2011.
Acknowledging the casino's troubles, Gov. Jerry Brown has signed a law significantly reducing the tribe's payments to the state.
The agreement is contingent on the tribe restructuring its private debts. Retiring the Lakes debt would be a key step in that process. The next hurdle: Cutting a deal with bondholders, who are owed $450 million.
For the quarter, Lakes' profits fell to $244,000 from $425,000 a year earlier. But revenue rose to $8.5 million, up from $2.5 million, in part because of the higher management fees from Red Hawk.
Call The Bee's Dale Kasler, (916) 321-1066. Follow him on Twitter @dakasler.