An official publication of Global Gaming Expo

The official publication of the Association of
Gaming Equipment Manufacturers

J U N E   2  0  0  2 

COLUMNS

Editorial

Survival of the fittest
San Diego casinos reminiscent of gaming start-ups across the country

By Jamie McKee

While attending the National Indian Gaming Association convention in April, I was fortunate enough to be taken on my first tour of San Diego-area casinos by an expert, David Ross. Ross, editor of the Valley Road Runner newspaper in Valley Center, has been the California correspondent for Casino Journal and the National Gaming Summary for nearly two years now.

While Ross' Jeep Cherokee barreled along the winding, rain-soaked highways of Southern California, I noted the similarities between the area's burgeoning, new casinos and those that came before them around the country.

Like the casinos on the Gulf Coast of Mississippi, Southern California's tribal casinos have some definite advantages: natural wonders and a built-in market. 

Most casino jurisdictions like to promote themselves as "destination resorts," but few have achieved that status or even have the potential. A destination resort area needs a natural amenity nearby-preferably an ocean or mountain or river. The only gaming "destination resort" that has thrived without any "natural" beauty is Las Vegas, which, due to many factors that don't exist in today's gaming climate, managed to create the impossible-a destination in a desert.

The Gulf, on the other hand, has white beaches, antebellum homes and thousand-year-old oak trees. And though it competes to some extent with Louisiana's riverboat casinos and Harrah's in New Orleans, the Big Easy is 100 miles away.

All five new casinos that have been built in California since Proposition 1A passed two years ago are located in San Diego County for similar reasons. It has the kind of lush, rolling hills that prompt developers to throw "Tuscany" into the name of their project, and 10 million people within a two-hour drive.

But Southern California casinos have something else in common with their predecessors: They are finding out just how difficult a business gaming can be, and that it entails much more than just opening the doors and collecting the money.

Some casinos-Viejas, Barona, Pechanga, Rincon and Pala-are doing well enough to build additions and hotels on a scale of some of the larger locals hotel-casinos in Las Vegas. Some would say their success rests on well-known gaming partners (Rincon is partners with Harrah's Entertainment), the fact that their casinos existed before Class III gaming was approved in California (Pechanga in Riverside County and Barona and Viejas in San Diego were established well before Prop. 1A), or location (Pala Casino, the largest of four Indian casinos that opened last year in San Diego, sits just a few miles from Interstate 15, which links Riverside and San Diego counties. Pala bought out partner Anchor Gaming to prevent a conflict of interest when Anchor merged with gaming machine maker International Game Technology, but still retains veteran casino manager Jerry Turk.).
But other casinos seem to have suffered more than their share of bad luck.

Casino Pauma rises out of an actual orange grove in one of the most appealing settings I have ever seen. (Builders of luxury home developments apparently agree-Ross told me there are several hidden behind the fragrant citrus trees.)

But opening delays have kept Pauma stuck in a temporary "tent" that is reminiscent of some of the initial casino efforts made in the now fiercely competitive Tunica, Miss., casino market. (Does anyone else remember that nauseating circus-tent theme Mandalay Resorts started out with back then, when it was Circus Circus Enterprises?) Pauma laid off 25 percent of its employees immediately after opening.

Likewise, the San Pasqual Tribe's Valley View casino was supposed to be temporary until it acquired the financing for a $230 million "Tuscan" resort. That resort is now on hold because of disappointing returns and a lawsuit by the developers against their partner, First Nation Gaming, a group that includes the Tunica-Biloxi Indians of Louisiana. The National Indian Gaming Commission refused to approve a casino contract between First Nation and San Pasqual because First Nation couldn't demonstrate where it would obtain the financing for the expansion. Developers John Warburton and Charles Buttner filed suit, claiming First Nation made promises it knew it couldn't keep to five California tribes.

Meanwhile, Valley View Casino laid off 80 of its 500 employees last August.

Even after natural advantages are taken into consideration, the winners and losers of every casino market are determined by the survival-of the-fittest theory.

Nobody knows how the San Diego market will play out. But one thing is for sure. Regardless of which operators end up gaining the upper hand, the real winners are the tribes.

Most casino communities, if they are honest, will admit that the addition of gaming has enriched their area by pumping up their economies and increasing job opportunities. 

The casinos of San Diego have exceeded that goal because they have enriched the lives of tribal members whose options were even more limited. 

Like you, I'll be keeping a close eye on their evolution. 

Jamie McKee, editor and associate publisher, can be reached at 702-735-0446 or at .

Back to Top

Casino Journal Magazine

Current Issue ~ Subscribe ~ Contact Us ~ Media Kit ~ Advertise

Copyright © 2002 GEM Communications, Inc. All Rights Reserved. smile-etccard.com