Business Deals | California | NIGC | Openings & Closings

Jamul Indian Village ready to open doors to long-awaited casino

Wednesday, October 5, 2016

A view of the gaming floor at the new Hollywood Casino Jamul in Jamul, California. Photo from Facebook

The Jamul Indian Village is opening the doors to its long-awaited casino in southern California on Monday.

The Hollywood Casino Jamul will be the closest tribal gaming facility to downtown San Diego. It was developed in partnership with Penn National Gaming.

“We are grateful to the Jamul Indian Village for giving us the opportunity to build this spectacular regional entertainment destination and are honored to serve as the manager of their facility and to help them realize their goal of becoming economically self-sufficient. Hollywood Casino, which created more than 1,200 construction jobs and approximately 1,000 permanent jobs, is the closest gaming facility to downtown San Diego and we look forward to providing our guests an unparalleled entertainment, gaming and dining experience," Timothy J. Wilmott, the president and chief executive officer of Penn National, said in a press release.

The opening comes after the tribe and its partner overcame numerous legal challenges. Opponents have been trying to stop the casino for years but have been unsuccessful so far.

The effort, though, has suffered a different setback. The National Indian Gaming Commission recently issued a "declination letter" for the project, which will require the tribe to seek refinancing of $460 million, Penn National said in the press release.

According to Penn National, the tribe is close to securing the funds, some of which will be used to repay the company for its investment in the casino.

A copy of the declination letter wasn't released by the firm and has not been posted on the NIGC's website.

Despite the setback, Penn National will still be running the casino for the tribe. The NIGC approved the management contract on September 30.

The decision indicates the NIGC's declination letter was related to a provision of the Indian Gaming Regulatory Act which requires a tribe to retain the "sole proprietary interest" in a gaming facility rather than the firm's role in the project.

According to the press release, Penn National will receive a fee of 30 percent of the net revenue and a licensing fee of 2 percent of gross revenue for running the casino.

Management agreements are common in the Indian gaming industry but are not as prevalent as they once were because more tribes are running their own casinos.

9th Circuit Court of Appeals Decision:
Jamul Action Committee v. Jonodev Chaudhuri (June 9, 2016)

Federal Register Notice:
Notice of Availability of a Draft Supplemental Environmental Impact Statement for the Jamul Indian Village Proposed Gaming Management Agreement, San Diego County, California (March 14, 2016)