Bankruptcy Imperils Madera County Casino

Published online on Sunday, Aug. 02, 2009
By John Ellis / The Fresno Bee

A nationally known gambling expert said last week’s bankruptcy filing by Station Casinos could hamper efforts by the North Fork Rancheria of Mono Indians to build a Madera County casino.

The Las Vegas-based company filed for Chapter 11 bankruptcy protection Tuesday. Station has a deal with the North Fork tribe to run a proposed $250 million casino, which would include about 2,500 slot machines, 70 table games, multiple restaurants and a hotel.

It is estimated the project would generate 2,500 temporary construction jobs and almost 1,500 full-time jobs after the casino and hotel open.

Another 2,300 Madera-area jobs could be created because of the economic spinoff of the mega-casino, and tribal leaders have said the project would generate $45 million to $50 million in annual vendor purchases.

But Station’s bankruptcy is another setback for the long-planned casino, which also faces multiple governmental hurdles at the state and federal levels before ground can be broken.

A Station Casinos’ spokeswoman said the deal is intact and the company is committed to the Madera project. The Mono tribe also said the bankruptcy will not pose a problem.

The company, however, will need permission from the bankruptcy judge to “do anything — which puts a clamp on Station,” said Bill Eadington, an economics professor and director of the Institute for the Study of Gambling and Commercial Gaming at the University of Nevada in Reno. Money also will have to be allocated to sustain the Madera project, he added.

“While in bankruptcy, it is very difficult to allocate funds for speculative ventures — and this would probably fall under that,” Eadington said.

The current credit crunch and lingering recession add to the challenge, not only for Station, but other high-profile gaming companies, as well. One option for the company is to sell the Madera contract, if it could find a willing buyer in this economy, Eadington said. The casino, proposed to be built on a little more than 300 acres about four miles north of Madera, is in a prime location, which could possibly fetch $20 million to $40 million, he said.