Pauma halts plan for $300 million casino resort

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September 28, 2009

SAN DIEGO - The Pauma Band of Mission Indians' plans for a huge casino and resort along Highway 76 north of Valley Center have stopped after their partner, the Mashantucket Pequots, withdrew from the deal. The Mashantuckets are owners of Foxwoods, the largest casino in the United States.

The partnership was first announced in 2006 with plans to replace the Pauma's existing casino with 2,000 slot machines, 50 gaming tables, a 500-room hotel, an entertainment venue, restaurants and retail shops. It was to open in the spring of 2009.

In a statement from the Mashantucket Pequots, the deal fell through almost a year ago when the two tribes "determined they were unlikely to secure the necessary funding to complete Pauma's project given the credit market conditions and the downturn in the economy both in California and nationwide."

The Pauma Band of Mission Indians filed suit earlier this month against Gov.
Arnold Schwarzenegger and the California Gambling Control Commission to void the 2004 gaming compact they signed with the governor. The compact authorized them to add thousands of slot machines in exchange for paying the state a greater share of revenues.

The Pauma currently operate 1,050 slot machines, the same number as in 2004.
However, their annual payments to the state now total $7.75 million. Under the previous 1999 compact they would owe $315,000 a year.

Their lawsuit asks for the return of about $26 million in payments and to revert back to the terms of the 1999 agreement.

"Pauma faces severe financial hardship (as a result of the agreement), causing drastic reductions in the tribal governmental budget and limitations on the provision of essential government services for its members,"
according to the tribe's lawsuit.

Return to California Casinos.