Local casinos bet big on expansions

The local Indian casino and resort industry is showing signs of strength again after several years of struggle brought on by the recession, with several of the region’s nine facilities undergoing expansion and renovation.

On Friday, Valley View Casino & Hotel in Valley Center reopened after shutting down for 11 days for a $6 million remodeling project. The work included installation of new carpeting and replacement of furniture and artwork.

Meanwhile, Harrah’s Rincon Casino & Resort, also in Valley Center, is scheduled to unveil a second hotel tower in March as part of a $160 million expansion project. The new tower will have 403 rooms, bringing the resort’s total number of rooms to 1,065 — by far the most of any Indian casino in the county.

In Alpine, Viejas Casino & Resort opened a 128-room hotel and 1,000-vehicle parking garage last year.

View the photo gallery: Valley View Casino and Hotel reopens

around the country,” said David Schwartz, director of the Center for Gaming Research at the University of Nevada, Las Vegas. “In a lot of places, casinos had put off doing a lot of capital improvements and expanding because of the recession. And now that things might be a little bit better, they are starting to do that again.”

And last week, the Jamul Indian Village announced that it has begun construction of the $360 million Hollywood Casino Jamul. The venue is slated to have nearly 2,000 game machines, 50 gaming tables, an events center, five restaurants and a 1,900-vehicle parking structure.

The tribe has been trying to build such a facility since the 1990s, but has faced resistance from nearby residents who fear that the roads leading to the reservation can’t handle the greater traffic a casino would generate. Lawsuits seeking to stop construction are expected to be filed soon.

(AARON Steckelberg / Union-Tribun)

“We’ve seen this

Back at Valley View, the decision to close on Jan. 6 for an “Extreme Casino Makeover” rather than remain open while construction lasts for six months or longer was unprecedented for casinos in the San Diego area.

Industry experts said customer loyalty is key to the casino industry. Close down, even for just 11 days, and maybe some of those patrons will go to another casino, find a new favorite slot machine and change their gambling habits.

“It was a calculated gamble,” said Valley View general manager Bruce Howard. “The reason we did it is because of our customer loyalty. Our loyalty is such that our average guest comes two or three times a month.

“So if we were going to take this building and dissect it over six or seven months, closing a section here or there, we would be inconveniencing 15 to 20 visits from that guest. One day the restroom might be closed, one day their favorite restaurant might be closed, or their section of slots. So we determined to do all 52 projects in 11 straight days, and we believe loyalty will win out and they’ll be back this weekend.”

The closure was carefully planned for early and mid-January — with only one weekend affected — because this period is traditionally one of the slowest times each year for the industry, Howard said.

At Sycuan Casino east of El Cajon, one of the region’s first and largest, things are looking up.

“We’ve begun to see the light at the end of the tunnel,” said Adam Day, Sycuan’s assistant tribal manager. A few years ago, Sycuan laid off 125 employees. They have all been hired back.

“We’ve stabilized and are having more confidence in the marketplace,” Day said. “We’ve had tremendous loyalty from our customers, and we’re beginning to see an uptick. We’re feeling very positive for the future.”

While customer loyalty is universally valued among the region’s casinos, other parts of the business model can differ.

For example, Day said 85 percent of Sycuan’s customers come for the day or night from within a 20-mile radius. Harrah’s Rincon, with all of its hotel rooms, markets itself more as a destination resort and does aggressive promotion in Orange and Los Angeles counties.

Harrah’s Rincon, Viejas, Valley View, Barona Resort & Casino and Pala Casino Spa Resort all have hotels. Sycuan runs a hotel a few miles from its casino, adjacent to what was formerly known as the Singing Hills Golf Course.

The ongoing increase in hotels makes sense, said Schwartz at the Center for Gaming Research. He said the strategy is to make each facility a destination site because the longer guests stay, the more money they will likely spend there.

Overall, not every casino in the San Diego area is experiencing financial recovery.

Santa Ysabel Casino near Lake Henshaw, located far from population centers, has been hurting and owes millions of dollars to the county and other creditors. In Boulevard, the small La Posta Casino closed down in 2012 due to lack of business.

The Indian casinos that have weathered the tough times of recent years now employ a total of about 11,500 workers, most of them not members of the tribes. These facilities together make up the fourth-largest employment bloc in San Diego County, behind Qualcomm (which has 12,000 employees).