Tuesday, June 10, 2003
Copyright © Las Vegas Review-Journal
Noise from Thunder Valley
Big crowd spurs early opening at Station project
By JEFF SIMPSON
GAMING WIRE
Station Casino executives and tribal officials opened the doors to a Sacramento, Calif.-area casino an hour early Monday to accommodate thousands of waiting customers.
The new Thunder Valley casino is expected to draw area gamblers accustomed to relatively minor-league tribal properties or a drive over the Sierra Nevada range to Reno or Lake Tahoe.
The United Auburn Indians' casino opened at 9:15 a.m., Station spokeswoman Lesley Pittman said.
"We're at maximum capacity," Pittman said, noting that customers were playing almost every one of Thunder Valley's 1,906 slot machines, with additional people lined up outside the $215 million casino.
Station executives forecast that Thunder Valley will generate about $50 million in annual management fees, a number that many industry observers consider conservative. Station anticipates collecting a bit more than $25 million by the end of the year.
Station Casinos reported income of $41 million last year from all of its operations.
"Expectations are very high," Station President Lorenzo Fertitta said from the casino. "It's amazing -- nine months ago this was a field. We've opened a number of properties, but I've never seen a turnout like this."
Fertitta said recent criticism of Station by Northern Nevadans concerned about the impact of a Sacramento-area casino on Reno and Lake Tahoe business is misplaced.
"We've shown our commitment to Nevada," Fertitta said. "And we're a publicly traded company. We're looking for good opportunities, and we're certainly not the only one doing it."
MGM Mirage is actively pursuing tribal casino development opportunities, Park Place Entertainment has a deal to manage a tribal casino north of New York City in the Catskill Mountains and Harrah's Entertainment already operates tribal casinos in North Carolina, Arizona and near San Diego, and hopes to develop another in Rhode Island.
Fertitta said Station's performance for the United Auburn tribe, financing and building the project in seven months, will make additional tribal deals more likely. The company already has a deal with another tribe to develop and manage a casino north of San Francisco in Sonoma County.
"We think California presents our company with a great opportunity," he said. "We think we're developing a very valuable franchise."
JP Morgan casino equity analyst Harry Curtis said Thunder Valley is a significant achievement for Station.
"It shows they've got a great relationship with an important tribe," Curtis said. "They've helped finance and construct one of the nicest casinos anywhere, in a short time period."
The results position Station to reap additional tribal rewards, he said.
"Any tribe would consider Station as one of two management companies of choice, along with Harrah's," Curtis said. "Thunder Valley positions Station Casinos to bid on any management contract anywhere."
Station executives and tribal officials are still considering whether they will build a hotel with the 75,000-square-foot casino, Pittman said.
Station shares closed at $22.80 Monday, up 15 cents.
