By EVELYN NIEVES Associated Press Writer - PLACERVILLE, Calif.—On a Tuesday afternoon at the Red Hawk casino, slot machines ca-chinged nonstop, the cafe had a wait and cocktail waitresses in gold lame bounced from table to table like pinballs.
The recession was nowhere in sight.
Red Hawk, about 70 miles east of Sacramento near Placerville, seems to be defying the odds. In Las Vegas, Reno—all over—casinos are laying off employees and halting development. The $530 million Red Hawk, which opened in mid-December, is drawing large crowds every day.
But can its luck last in this economy?
Yes, says Red Hawk's general manager, Peter Fordham, a veteran casino executive.
"We believe there is business here that hasn't been touched," he said, notwithstanding several casinos within an hour's drive and Reno two hours away.
Like a bright, shiny penny on a city street, Red Hawk is grabbing attention because of its newness, casino experts said. In part, new casinos draw patrons who think they have better odds of winning at them, said Dennis Conrad, a Reno-based casino analyst. They also draw patrons interested in seeing the latest development, said Holly Thomsen, communication director for the American Gaming Association.
"Newness can be a factor just as if a new mall opens in your neighborhood, people want to check it out," Thomsen said.
That could mean Red Hawk's attraction will fade once the newness wears off. Nationwide, casino revenue figures paint a somber picture. Gaming revenue nationwide dropped $1.45 billion, or 4.3 percent, to $32.6 billion in 2008 compared with 2007, according to the American Gaming Association. The AGA, which reports gaming revenue fell $1.2 billion in Nevada alone, or 9.7 percent, includes only states that allow stand-alone casinos and excludes Indian casinos.
Some of the largest casino operators saw double-digit drops in revenue in the last quarter of 2008. Just this month, Las Vegas Sands Corp. reported a $136.5 million loss for the quarter, down from a profit of $39.9 million a year earlier. And in California, where casinos are limited to tribal land and statewide revenue is starting to approach Nevada's total, officials expect their agreements with tribes to generate one-third less cash this year than previously forecast.
"People are pulling in their horns for the same reason that they're spending less money on movies and cars," said Conrad. "The difference is that with casinos, people are drawn to the luck factor."
There are exceptions to the casino blues. In Pennsylvania, where slot parlors first opened two years ago, revenue has climbed steadily--probably because they are still new, Thomsen said. In Missouri, where voters last fall repealed a law that limited the amount gamblers could lose, casinos have been reporting huge hikes in revenue and the number of people gambling.
Research from the American Gaming Association shows that the recession may be a boon to Las Vegas-style casinos like Red Hawk that are located away from gambling Meccas and that offer other activities, even bowling or dining.
"People are less likely in this economy to take longer trips," Thomsen said. "But they're still looking for low-cost entertainment experiences. So to the casinos that are closer to home are more attractive in this environment."
Hopes are high for Red Hawk, which has six restaurants, four bars and a child care center. With 1,800 employees, the new casino, owned by the Shingle Springs Band of Miwok Indians, is the largest employer in El Dorado County, the heart of gold country.
Both the state and El Dorado County are counting on Red Hawk to attract visitors with disposable income. The county dropped its opposition to the casino in exchange for $190 million payable over 20 years, and the state will receive 20 percent to 25 percent of the casino's net slot machine profits through 2029, a greater share than it gets from any other of California's more than 50 tribal casinos. Statewide casino revenue figures are not available.
The Shingle Springs Band, which was cut off from its 160 acres for more than 40 years after the state realigned U.S. Route 50 in 1965, is dreaming big dreams now that there's a highway access road to Red Hawk. The tribe will split its earnings—after paying for health care, social services and education—among its 503 members.
Placerville—called "Hangtown" for the way it punished outlaws during the Gold Rush—is banking on casino guests stopping by its historic Main Street.
The town's oldest business, Placerville Hardware, open since 1852, has long drawn tourists, but sales have fallen hard since December, said manager Albert Fausel, whose family has run the store for three generations. He hopes the casino brings more visitors.
"We kind of had bad thoughts of the casino coming, the traffic and crowds," said Fausel, who is 30. "But since it's opened, we've definitely seen a few people from the casino stopping in. We'd definitely like to see more."
The downtown needs whatever boost it can get it, said Shelly Renee, owner of Hangtown Hotdogs.
"I've been disappointed here," said Renee, who opened the shop nine months ago after relocating from Los Angeles. "I thought there would be a lot more people coming through town."
The rub is that Red Hawk, like the splashiest Las Vegas casinos, offers amenities designed to keep its guests happily ensconced: besides the restaurants, bars and child care center, it has an arcade, entertainment, free valet parking, nearly 2,000 slot machines and 75 gaming tables.
Casinos often are windowless so bettors have little sense of day or night and keep playing. But on a landing Red Hawk has a wall of windows overlooking the Sierra foothills.
"We thought it would be criminal," general manager Fordham said, "not to take advantage of the natural beauty around us."
Red Hawk is attracting the curious, along with occasional gamers and regular gamblers, he said.
Doreen Chin, 52, and her sister, Dorothy, 54, said Red Hawk gives them a new place to try their luck. They're regular patrons at other casinos within two hours' drive from Sacramento, where they live.
Like many gamblers, the Chins have cut how much they're willing to lose on a given day, however. "It used to be $100," Doreen said.
"Now, $50," her sister said.
