By Richard Chang and Dale Kasler
Elk Grove took a major step Wednesday toward having an Indian casino as Gov. Jerry Brown announced he had negotiated a gambling compact with the Wilton Rancheria tribe.
Although the compact still needs approval from the state Legislature, the governor’s approval is a milestone in the tribe’s quest to build a $400 million casino adjacent just off Highway 99 at the south end of Elk Grove. The tribe is basking in two successive victories, including last week when the federal government denied an appeal by casino opponents that challenged whether the correct official signed off on taking land into federal trust.
Wilton tribal chairman Raymond Hitchcock said Wednesday that the tribe expects to break ground in three years on the project, which would include a hotel and convention center.
“I’m feeling very good,” Hitchcock said, calling the victories “divine intervention.”
The gambling compact sets out guidelines for the casino’s operation and is required before any tribe can open a gambling facility. Notably, the agreement allows the Wilton tribe to operate 2,500 slot machines in Elk Grove – the same as Thunder Valley Casino near Lincoln, which is considered the leading tribal casino in the Sacramento area. Slot machines are usually the most lucrative revenue sources at tribal casinos.
The deal requires the tribe to pay 6 percent of the house’s win from its slot machines into a state-run fund that shares revenue with tribes that don’t have casinos. But because the Wilton tribe already has made deals to pay millions of dollars annually to the city of Elk Grove and Sacramento County, it won’t have to start contributing to the state fund until the casino is seven years old.
Wilton’s deal with Brown comes as tribal leaders continue to wrestle with casino opponents over the federal government’s approval of the project. Stand Up for California, a Penryn-based gambling watchdog group, has vowed to continue challenging the project in federal court. A separate lawsuit by a group of Elk Grove citizens filed in June alleged that Elk Grove officials illegally colluded with tribal leaders.
“This thing has so many legal flaws to it,” said Cheryl Schmit, Stand Up’s director. “We’ve got a buffet table of challenges that we can pick and choose from.”
Schmit said she wasn’t surprised by the compact, noting that the state has a timeline to negotiate in good faith with the tribe. But, she said, the fact that lawsuits remain should give legislators pause.
The governor’s compact includes provisions to address ongoing litigation and controversies. For instance, if a federal court sides with Stand Up and land is taken out of trust, the compact would become void.
The presence of a developer’s agreement between the city of Elk Grove and Howard Hughes Corp. to build an outlet mall on the property has remained a persistent issue. The compact states that if the development agreement is found to have legal effect, the tribe and governor would have to renegotiate the compact.
Elk Grove spokeswoman Kristyn Nelson said in a statement, “This is another step in the process for Wilton Rancheria’s project. The city continues to monitor developments associated with the project at both the state and federal levels.”
Howard Dickstein, a prominent Sacramento tribal-law attorney who has represented several tribes including the owner of Thunder Valley Casino, said the governor’s compact, while significant, is only one of many boxes the tribe has to check off.
“Some serious legal issues have to be resolved first,” said Dickstein. “The fact that they cleared a state hurdle has no impact on the federal and local hurdles.”