Red Hawk Casino Soaring After $30 Million Judgment Overturned

Flying red-tail hawk

For a while it looked like Red Hawk Casino’s past would catch up with it. Thanks to a recent court judgment though, the California tribal casino gets to turn over a new leaf.

Earlier this month, the California Court of Appeals overturned a $30 million judgment against the casino’s Shingle Springs Band of Miwok Indians. If the decision stood, the tribe stood a good chance of going bankrupt trying to pay it.

Lawsuit related to tribe’s first, failed casino attempt

The lawsuit stems from the tribe’s previous attempt to open a casino in the Sacramento area back in 1990s. Casino might be a generous word for it, honestly. The original gambling institution was little more than a tent with some table games inside.

Miwok’s gambling hall did not even have a regular schedule. Rather, it operated sporadically, rarely turning much of a profit. It closed up shop in 1998.

A decade later, the Miwok Tribe opened a full-fledged casino in 2008. The tribe’s timing was not ideal, coming in the middle of the Great Recession. Thankfully, California Gov. Jerry Brown agreed to revamp the casino compact. The tribe got a three-year break from tax payments in addition to a tax rate decrease.

Unfortunately, that did not solve all of Miwok’s woes. Right around that time, Sharp Image Gaming filed a lawsuit against the tribe for violating its contract with the company.

Sharp Image partnered with the Miwoks for the gambling tent, but did not have a role in the brick and mortar Red Hawk Casino. As the slot supplier sees it, they should have been the one providing the machines for the new property when it opened. The Miwoks, on the other hand, contended they had no contractual obligation to include Sharp Image in its second try at gambling.

Courts previously sided with Sharp Image

Miwok Nation argued that, because the contract with Sharp Image did not get proper approval from the National Indian Gaming Commission, the contract ws void. The lower courts disagreed with that argument in 2011, ruling the tribe owed the company $30 million. With court fines, the amounted was more like $49 million.

That is a sum that could have crushed the casino during its rough early years. While the property now features over 2,500 slot machines and 60 table games, it took some time to find its footing. However, even now, such a judgment could be the end for the poperty.

After the Appeals Court issued its ruling, Nicholas Fonseca, Chairman of the Shingle Springs Band of Miwok, expressed his relief in a press release.

“I always believed the Tribe was in the right. I’m glad the Tribe had the perseverance to stay the course.  This is a victory for all tribes in California.”

Jessica Welman

About

A graduate of USC and Indiana University, Jessica Welman has long been involved in the poker industry. She has worked as a tournament reporter for the World Poker Tour, co-hosted a podcast for Poker Road, and as the managing editor for WSOP.com.