A local business pulling in more than $100 million a year whose owners have no apparent worries other than figuring out how to spend the money ended up in a federal court hearing on Wednesday fighting for its corporate life because the owners’ leaders couldn’t stop themselves from brandishing handguns and pulling false fire alarms in the middle of their own shop even as customers were eagerly giving them more money.
Make no mistake, Fresno and the central San Joaquin Valley have never seen anything quite like the Chukchansi Gold Resort & Casino legal rhubarb that got underway at downtown’s Robert E. Coyle federal courthouse.
Check that — make it all of America.
This isn’t my story. Bee reporter Marc Benjamin has been covering the tale superbly for years, with capable assistance periodically from newsroom colleagues Carmen George and John Ellis.
Never miss a local story.
But I come by my interest in events honestly. I covered Indian gaming for The Bee many years ago. And the Coyle Courthouse is on my path as I walk to and from City Hall.
I couldn’t resist checking out the pre-hearing courthouse drama on Wednesday.
The casino’s history by itself is jaw-dropping. The Chukchansi tribe of Madera County was publicly fighting for a full-fledged casino/resort as far back as 1994-1995. Las Vegas-style gambling (coin-operated slot machines, in other words) wasn’t even legal in Indian casinos at the time.
Money for land and construction was always the problem. Tribal leaders of the era, desperate for cash, even got involved in one of the Marks-Roos bond deals that caused big legal problems for tiny communities across the state.
Then, on June 25, 2003, the casino with 1,800 slot machines opened near Coarsegold. Cars full of gamblers were backed up two miles.
Chukchansi members in eight years had gone from trolling for project money anywhere they could get it to proud parents of a $150 million resort as impressive as any in the region.
In the typical Indian gaming model of the past 30 years, tribes started with bingo in double-wide trailers and slowly worked their way up to lavishness. Chukchansi dispensed with the learning curve.
Richard Verri, a lawyer for the Reggie Lewis/Nancy Ayala faction, stood outside the courthouse on Wednesday fielding media questions. The $100 million-plus figure is no exaggeration.
Verri said the casino has a $32 million annual payroll. He said the tribe pays $25 million a year to various bondholders. He said another $12 million a year is spent on tribal government and payments to tribal members. There are about 900 tribal members, he said. Some are minors. It wasn’t clear to me whether the minors get smaller payments or no payments.
Verri said casino/hotel operational costs are immense. He nodded when I said the business’ yearly gross is nine figures.
The Valley’s economy has been tough of late. Chukchansi casino’s income has suffered, Verri said.
Still, $100 million-plus is quite a cash-flow.
Which brings up the factions. Chukchansi has at least two of them. There’s the Lewis/Ayala faction. There’s the Tex McDonald faction. I contend the frictional nuances of factions, regardless of the tribe, are beyond an outsider’s grasp.
But one thing was certain Wednesday — the Lewis/Ayala faction had the better public relations game plan. Lewis, Ayala and their allies for two hours had the courthouse entrance and media pretty much to themselves.
Yes — they blamed all the trouble on the McDonald faction.
Ayala told me about all the stakeholders who would be harmed if the casino stays closed (by court order) for a long time. There are the hundreds of employees. There are the many local businesses somehow connected to casino affairs. There are the tribal members dependent on monthly casino checks.
“What about the Grizzlies?” I asked.
The tribe has a $1 million-a-year stadium naming rights deal with the Fresno Grizzlies. This year’s payment was made in late August. But a long-term casino closure could threaten next year’s check.
“Yes, the Grizzlies, too,” Ayala said.
I sensed the Grizzlies aren’t a high priority for the tribe these days.
The hearing before Judge Lawrence J. O’Neill was held in a seventh-floor courtroom. The place filled early with spectators. Courthouse officials expected this, so they made the courtroom (with TV monitors) next door available to the public. This, too was filled to the brim.
Not your typical mid-week court hearing in Fresno.
Sovereignty is an issue sure to get an airing in the coming weeks.
What is sovereignty? In a nutshell, it’s independence and the clout in a dangerous world to make it stick.
Tribes with casinos are aggressively protective of their sovereign authority on tribal lands. The legal concepts are complex. It’s no joke to say they date back to Columbus.
The Chukchansi tribe enjoyed immense sovereign authority on casino grounds until last week. Then came the disaster with handguns and the fire alarm. Then another sovereign authority — the federal government — stepped in and tolerated no opposition.
Chukchansi sovereignty didn’t collapse, but it’s sure been compromised. This worried some tribal leaders on Wednesday.
“There’s a lot riding on this decision today,” Ayala said.