River Rock Casino in Northern California, operated by the 1,040-member Dry Creek Rancheria Band of Pomo Indians in Wine Country, told its creditors last week that it will default on bonds that financed the casino near Geyserville.
The business arm of the tribe, the River Rock Entertainment Authority, announced that it would not make interest payments on two notes. The casino will remain open, and CEO David Fendrick announced in a statement, “[W]e want to assure our customers, vendors and employees that we are generating sufficient funds to operate our business and provide the excellent customer service that our patrons expect.”
Fendrick said the casino will begin employing cost cutting measures and has hired marketing consultants.
The casino’s financial problems are seen as a direct result of the opening last fall of the Graton casino in Rohnert Park, one of the largest gaming operations in the state, a casino about five times the size of River Rock. The casino’s revenues have fallen an estimated 30 percent since the opening.
The casino opened in 2002 as the first casino in California’s wine country. It was financed by $200 million in bonds with 9.75 interest. The debt was restructured in 2011 in the face of the risk of default.
Because they are sovereign nations, a tribe’s assets cannot be seized by creditors if it defaults on a debt. Several gaming tribes that have faced such problems have been able to restructure their debts.
