Business & Real Estate

Firm that works in card rooms is bankrolling Elk Grove casino fight

Wilton Rancheria wants to build Sacramento County's first tribal casino on the site of these unfinished structures of an ill-fated mall project on Promenade Parkway in Elk Grove, Calif., on Friday, February 12, 2016.
Wilton Rancheria wants to build Sacramento County's first tribal casino on the site of these unfinished structures of an ill-fated mall project on Promenade Parkway in Elk Grove, Calif., on Friday, February 12, 2016. Sacramento Bee file

The force behind the effort to halt the proposed Indian casino in Elk Grove is a Bay Area company tied to a Sacramento card room operator.

Knighted Ventures LLC, an Emeryville company that provides financial services and employees to card rooms, revealed itself in a state Fair Political Practices Commission filing as the group pushing a ballot referendum that could derail the Wilton Rancheria Indian tribe’s plans to build a $400 million casino at the southern edge of Elk Grove. The filing was dated Nov. 16 but didn’t surface until Monday, when the state commission dismissed a complaint from a pro-casino group.

The disclosure follows weeks of mystery about who was trying to squelch the proposed casino. On Nov. 21, an unidentified group submitted 14,800 signatures to the Elk Grove city clerk, demanding a voter referendum to overturn the city’s agreement with the tribe and a developer. That’s well more than the 9,000 signatures needed to force a vote, although the clerk is still verifying the validity of the signatures.

Roger Salazar, a spokesman for Knighted Ventures, said the firm has “a market interest in the outcome” of the casino fight and “isn’t trying to hide” its connections to the card room business. But he added that 14 of Knighted Ventures’ employees live in Elk Grove, and the firm believes voters should have a say in whether “Vegas-style gambling” comes to the suburb.

Court records and other documents show Knighted Ventures has connections to Silver F Inc., owner of four card rooms in Northern California. They include two in greater Sacramento: Parkwest Casino Lotus on Stockton Boulevard and Parkwest Casino Cordova in Rancho Cordova. The Stockton Boulevard card room, which lies about 15 miles north of the tribal casino site in Elk Grove, is undergoing a multimillion-dollar expansion.

A visit Monday to the Parkwest Casino Lotus, in Sacramento’s Little Saigon neighborhood, made clear the connection between the card room and Knighted Ventures. Employees of Knighted Ventures were working in the card room, identified by their badges.

Elk Grove Mayor Gary Davis, a supporter of the tribal casino, said he was angered that a group affiliated with a card room was trying to block the casino project, which would go on a plot of land the city has wanted to see developed for years.

“Hopefully, Elk Grove voters will see this for what it is,” Davis said. He called the anti-casino group “fraudulent, self serving.”

Josh Wood of Region Business, an alliance of building contractors supporting the casino, said, “We know why they wanted it to be a secret. They’re an out-of-town group trying to kill the project. ... They’re trying to kill this to protect a different gambling interest.”

Wood’s group filed a complaint with the Fair Political Practices Commission in November, saying the group behind the voter referendum hadn’t made the necessary campaign-finance disclosures. The agency dismissed the complaint Monday, saying the group had made the required filings.

In its letter dismissing the filings, the FPPC said Knighted Ventures paid for the signature-gathering effort out of its own pocket. Salazar said he didn’t know how much money Knighted Ventures spent.

Knighted Ventures, which also has offices in Los Angeles, is a “third-party provider of propositional player service,” a kind of financial-services firm that is essential to the operation of the card room industry.

Unlike Indian casinos, California card rooms aren’t allowed actually to take bets on blackjack and the other table games they host. In other words, they can’t act as the “bank” or the “house.” Instead, they turn to the third-party firms that perform that function. These firms take the profit or loss, depending on the outcome of each hand, and their employees work in the card rooms.

In addition, Knighted Ventures has done work for at least one of the Little Saigon card room’s sister venues, Parkwest Casino 580 in Livermore. That connection was spelled out in a 2013 lawsuit filed by a former Knighted Ventures employee who claimed he wasn’t reimbursed for some expenses incurred while working at the Livermore venue.

What’s more, real estate database firm LexisNexis says Roy Choi, the head of Knighted Ventures, has purchased property in Los Angeles in concert with John Park, the owner of Silver F and the four Parkwest casinos.

Choi and Park couldn’t be reached for comment Monday. Salazar said he didn’t have details on the relationship between Knighted Ventures and the Silver F card rooms.

The Wilton tribe wants to build a $400 million casino on a slice of land it would purchase from developer Howard Hughes Corp., near Highway 99 at the south end of Elk Grove. Hughes would turn the rest of the property into an outlet mall.

The tribe needs approval from the U.S. Interior Department and National Indian Gaming Commission to build a casino on the land. It also must sign a gambling compact with the governor.

The proposed ballot referendum would target the casino on other grounds. Specifically, the project’s opponents are trying to overturn the Elk Grove City Council’s decision Oct. 12 to let Howard Hughes sell a portion of the mall site to the tribe. That decision amended the city’s earlier development agreement with Hughes.

Hughes officials have said the tribal casino is crucial to the economic success of the outlet mall. The developer hasn’t set a groundbreaking date for the mall project.

“It would be unfortunate and misleading to the citizens of Elk Grove to discover that out-of-town card rooms are behind the campaign to kill the mall,” said the tribe’s chairman, Raymond Hitchcock, in a statement emailed to The Sacramento Bee.

The mall site has been been a sore point with city officials for years. An earlier developer, General Growth, abandoned work on an earlier version of the mall in 2008, leaving behind a series of half-built shell buildings.

Dale Kasler: 916-321-1066, @dakasler

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