Latest on Bay Mills Casino Schemes backed by Michael Malik and Detroit's Ilitch Family

The Bay Mills Indian Community owns  two casinos (Kings Club Casino and Bay Mills Resort & Casino) in Brimley (MI).

For nearly two decades, Bay Mills has attempted to get approvals to build a casino resort in Port Huron, 350 miles away from its Upper Peninsula Reservation.  Detroit casino syndicator Michael Malik (Blue Water Resorts), with support from Marian Ilitch – her family owns the Detroit Tiger (MLB) and Red Wings (NHL), MotorCity Casino and Little Caesars pizza – has been the driving force behind the Bay Mills schemes.  They’ve spent millions lobbying local, state and federal officials and benefiting the campaign coffers of politicians who they have leaned on for support.

In 1993, Port Huron voters rejected Malik’s plan to develop a Bay Mills casino in partnership with Harrah’s.

For the better part of the last decade, their schemes have centered on a Land Claims Settlement they had negotiated with former Governor John Engler in the final days of his administration.  Malik and cronies had acquired control of properties in Charlotte Beach (MI) where Bay Mills had made land claims.  Those properties were to be leveraged to gain the right to build in Port Huron.

During 2010 Bay Mills acquired properties in Flint, Vanderbilt and Port Huron (MI).

With little to lose and much to gain, the Bay Mills Indian Community opened a mini-casino in Vanderbilt (MI) on Nov 3, 2010. The 1,200 square foot facility, located 100 miles from the Bay Mills Reservation, had 38 slot machines. (Bay Mills Press Release)

On the same day, leaders of five other Michigan Tribes released a joint statement calling on the National Indian Gaming Commission, the U.S. Department of Justice, and the Department of the Interior to work together with  Michigan’s Governor and Attorney General to take swift and immediate action to close what they called an “illegal gaming operation.”

The National Indian Gaming Commission (NIGC Opinion) and U.S. Department of Interior (Solicitor's Opinion) have opined the Vanderbilt casino is not on Indian Lands and is therefore illegal.  

In December 2010, the Little Traverse Bay Band of Odawa Indians and Michigan’s Attorney General filed lawsuits seeking to shut down the Vanderbilt casino. (Petoskey News)

In January 2011, Bay Mills completed an expansion of the Vanderbilt casino more than doubling its size to 2,600 sq. ft.

On March 3, 2011, Bay Mills was ordered to shutter the Vanderbilt casino. In that ruling (Pgs 10-11), Judge Paul L. Maloney says the Vanderbilt property does not qualify as "Indian Lands" and as such is not exempt from the usual taxes, fees, codes and regulations.

A complicated and sure to be precedent setting legal challenge has ensued.  The blog Turtle Talk, Pechanga.net and Indianz.com are resources of details and updates on the court activity.

Bay Mills leaders are expected to make a presentation to the Flint Township Board on Monday, October 3rd at 7:00 PM.  It has been rumored they plan to reveal plans for another off-reservation casino on 28 acres they acquired in Flint last December. (10.03.11 | Agenda)

 Rep. Dale Kildee (D-Flint) says it is highly unlikely Bay Mills can get the approvals to open a Flint casino.

It has been reported that if the play in Vanderbilt succeeds, Bay Mills plans to convert the old Port Huron post office on Military Street into a temporary casino with 1,500 slot machines.

Eventually, Bay Mills intends to build a permanent casino and luxury hotel at Desmond Landing, where the tribe owns 16.5 acres.

Five Opposing Tribes: Grand Traverse Band of Ottawa and Chippewa Indians, the Gun Lake Tribe of Pottawatomi Indians, the Little Traverse Bay Bands of Odawa Indians, the Nottawaseppi Huron Band of Potawatomi Indians and the Saginaw Chippewa Indian Tribe.

MGM Mirage to take $1.2 Billion Writedown on Mandalay

1.09.09

MGM Mirage to Take $1.2 Billion Writedown on Mandalay

By REUTERS

NEW YORK (Reuters) - MGM Mirage said on Friday it would write down the value of the Mandalay Resort Group, the casino company it bought in 2005 for about $5 billion.

In the last year or so, the Las Vegas gambling boom has ended and the real estate market deteriorated sharply, sending the value of casino properties plunging and putting a financial squeeze on operators.

In a regulatory filing late on Friday, MGM Mirage said it will recognize a non-cash impairment charge of about $1.2 billion in its fourth-quarter results, representing substantially all of the goodwill it recognized when it closed the deal.

The purchase of Mandalay, which operates the Mandalay Bay, Luxor and Excalibur resorts in Las Vegas, propelled MGM Mirage into the position of the world's No. 2 casino company, behind Harrah's Entertainment.

Brief synopsis of Mike Malik's 14-year scheme to site an off-reservation casino in Port Huron

as published 10.04.07 in the Port Huron Times Herald:

By MIKE CONNELL Times Herald

...Sears joined the exodus to the suburbs, and in 1993, developer Mike Malik proposed turning the vacant Sears building on Michigan Avenue into a $60 million casino.

Malik, a native of Clay Township, envisioned a casino owned by Bay Mills, a Chippewa band from the Sault Ste. Marie area, and managed by Harrah's Casino Hotels of Nevada. The proposal failed on July 13, 1993, when city voters rejected it, 5,120 to 4,751.

A year later, voters in Port Huron Township rejected a similar proposal for a casino off the Water Street interchange of the expressway.

Malik reappeared in 2002, a year after voters endorsed a casino proposal from Don Reynolds, one of the Edison Inn's owners. In August 2002, Gov. John Engler agreed to let Bay Mills create a reservation on the Edison Inn's 15-acre site if the tribe would drop its long-standing claim to a 110-acre parcel at Charlotte Beach on the St. Mary's River.

Numerous efforts to win congressional and presidential approval of the Engler-Bay Mills' deal have failed. A new bill was introduced in May by U.S. Rep. Bart Stupak, D-Menominee. As of last week, it remained in the House Natural Resources Committee...

Tom Celani: a biographical feature from Crain's Detroit Business

9.24.07

A man of many titles: Tom Celani has so many interests, it's hard to keep them straight

By Robert Ankeny

Tom Celani has to make a decision when you ask him for a business card.

He's either “owner” of Farmington Hills-based MotorCity Harley-Davidson and Bloomfield Hills-based MotorCity Power Sports; or he's “president and CEO” of Novi-based Luna Entertainment; or he's “proprietor” of TC Vineyards Inc., the Celani Family Vineyards in Napa Valley.

He's also an investor in a theater chain, a land developer in Arizona and Colorado, and a casino management consultant.

Celani, 51, of West Bloomfield Township, has grown a successful family wholesale beer company into an empire of businesses.

One source estimates Celani's companies could hit close to $250 million in revenue in 2007. His two dealerships employ about 110 people and had about $50 million in revenue last year, Celani said.

Celani expects to sell about 1,100 motorcycles this year at MotorCity, the top volume Harley-Davidson dealer in the Midwest. He is currently expanding the dealership from 30,000 to 40,000 square feet.

Walls in his upstairs office are decorated with Harley posters, a huge elk head and a large portrait of his wife Vicki and three children: Vinnie, Olivia and Ben.

On the wall near his desk is a striking photo of the Celani Family Vineyards in Napa Valley.

In many ways, Celani's heart is there on the sunny slopes that remind him of Italy, or back to Detroit's east side 40 years ago.

"I guess there always was a seed there, since I was a boy and worked with my grandfather Vincenzo in his basement making wine with grapes we'd buy at Eastern Market.

"He'd make about four barrels just for his own family and friends, and a small barrel of vinegar,” Celani said.

"I began collecting wines about 20 years ago, knew a good distributor, started going to tastings, and about 1987 put a few cases away."

Today, his home wine cellar is stocked with French, Italian and U.S. wines, and includes about 5,000 bottles, he said.

In 2005 he purchased a 20-acre vineyard with house and winery in Napa Valley.

"We're about a quarter-mile down the road from (race driver) Mario Andretti and (former Kmart CEO) Joe Antonini's vineyard," Celani said.

Celani has hired winemaker Mark Herold, who has been astonishing critics with his wines from small vineyards.

Our goal said Celani, is to build "a small, boutique, high-quality winery, and make wines sought after by great restaurants."

He said his wines — labeled "Ardore," meaning passion — will hit store shelves this fall with a limited amount of Chardonnay available in October and about 300 cases of a Cabernet/Merlot blend to be distributed by General Wine & Liquor Co. starting Nov. 1.

Celani's passion for wine-making extends to custom-designed bottles and a custom label. His love for wine has also led him to wine auctions, which in one case resulted in a spot on the board of the College for Creative Studies in Detroit.

CCS President Rick Rogers said the college family got to know Celani through the wine auctions before he became a trustee in 2003.

Celani is a big donor, as well as a major bidder at CCS wine auctions, Rogers said.

"We were already friends. Knowing of his interest in the mission of the institution, and of his level of enthusiasm, we thought he would be an asset to the board and that's worked out," Rogers said.

As a businessman, Celani also has fared well from his investments in the casino industry.

In March 1999, Celani hit a $30 million jackpot when International Game Technology (NYSE: IGT) bought Sodak Gaming Inc., a South Dakota-based slot machine distribution company he had invested in.

"I bought two-thirds of the company for $2 because two partners wanted out ... and then invested $500,000 in it," Celani said.

Sodak became the exclusive slot machine distributor to North American Indian-owned casinos for IGT, the world's largest manufacturer of slot machines.

Celani owned more than 3 million shares, according to the 1998 annual proxy report of the then-publicly traded company, when IGT decided to buy Sodak and do its own distribution to tribal casinos.

He also was working with various start-up tribal casinos in Michigan and elsewhere. That led to a partnership in Detroit's MotorCity Casino.

Celani joined with Detroit entrepreneur Herb Strather and Greektown Casino L.L.C. founders Ted Gatzaros and Jim Papas to push for commercial casinos in Detroit by helping finance a statewide ballot campaign in November 1996.

"Tom was a good partner," Strather said. "We did our deal on a handshake, in July 1995, and signed paperwork a month later."

Celani had been supporting a proposal for an Indian casino complex called FoxTown to be built east of Woodward Avenue by the Bay Mills tribe and Harrah's Casinos of Las Vegas.

But then-Gov. John Engler blocked off-reservation casinos, Strather said.

"My recollections of Tom are that he always kept his word and he had guts. I'm very appreciative to have worked with him," Strather said.

Celani was a partner in MotorCity Casino L.L.C., and sold his share to Marian Ilitch when she gained total control in 2005.

Ilitch paid MGM Grand/Mirage Casinos $525 million for its Mandalay Bay holdings, a 53.5 percent share of MotorCity. She bought an additional 11.5 percent from Strather's group, Atwater Associates L.L.C., for $100 million and 10 percent from Celani for an undisclosed amount estimated at between $85 million and $100 million.

In addition to casinos, Celani is a major figure on Detroit's philanthropic scene.

In 2003, the Celanis donated $1 million worth of Harley-Davidson and Buell motorcycles, personal watercraft and other power sports items to the Central Michigan University College of Business Administration.

"Those were ingenious contributions," said Steve Smith, CMU director of media relations. "Celani's idea was that marketing students could find the best ways to sell the 'boy toys,' with the money from the sale going toward a student investment portfolio, the Tom and Vicki Celani Venture Capital Fund.

"It gave marketing students a chance to figure out how to get the best prices for those items, so the bikes were auctioned on eBay," he said.

Then finance students got to figure out how to invest the money in the stock market. "It gave them real world experience," Smith said.

Celani attended CMU as a freshman in 1974 but left to help run the family business — Action, a Livonia-based Miller beer distributorship — because his mother was dying.

In 2004, CMU awarded Celani an honorary doctorate for his "more than three decades as a business leader and entrepreneur."

And in 2005, the university named a new dorm on the Mt. Pleasant campus the Ben and Marion Celani Residence Hall in memory of Celani's parents.

Since 1982, one of Celani's favorite charitable endeavors has been Hearts of Livonia, founded in 1978 by his father. The nonprofit raises money for advanced life-support equipment at Livonia's St. Mary Mercy Hospital, giving $2.6 million to St. Mary and other charities, including more than 160 college scholarships for Livonia students.

The Celanis also support Rochester-based Sweet Dreams Project, Oakland Child Abuse and Neglect Council, and the Rainbow Make-a-Wish Foundation in Oakland County. They are also benefactors to the Detroit Symphony Orchestra and Michigan Opera Theatre.

"He's such a good community citizen," said David DiChiera, founder and general director of MOT. "You don't meet many people as open to supporting community efforts as he and Vicki."

He said the Celanis opened their home for a fund-raiser for the world premier of "Cyrano," DiChiera's own opera that will be performed Oct. 13-28.

"They do it with such grace, everything very beautifully done, and show so much enjoyment doing it," DiChiera said.

Robert Ankeny: (313) 446-0404, bankeny@crain.com

Developer's been chasing Tribe's off-reservation casino schemes for more than 15 years

Dating back to the early 1990s, self-styled casino syndicator and promoter Mike Malik has been trying to get a deal that would allow the Bay Mills Indian Community to build an additional casino somewhere off-reservation, far from their Northern Michigan U.P. reservation lands and outside their recognized ancestral territory, in an urban area that would be even more of a financial goldmine. Ever the deal broker, Malik had originally brought in Harrah’s to partner with the tribe and included the Ilitch Family on various urban locations including several in Detroit and Port Huron.

Detroit Free Press (MI) - December 22, 1992

HARRAH'S PUTS BETS ON PORT HURON FOR A CASINO

Port Huron isn't known as a tourist destination, but Harrah's International along with Mike Malik had decided the numbers were right to make the city of 35,000 into one. The gambling company wants to put a casino costing up to $60 million in a vacant Sears store in downtown Port Huron, about an hour north of Detroit. The proposal, unveiled Monday, faces long odds, including opposition from Gov. John Engler. Port Huron officials also expect some local opposition

Detroit Free Press (MI) - May 29, 1993
CASINO PLAN FLOATS NEAR FOX THEATRE INDIAN-RUN CENTER COULD HELP FUND A NEW DETROIT STADIUM FOR TIGERS

With attention centered on a plan to put an Indian-run casino in Greektown, developers and lobbyists quietly are seeking to build an Indian casino near the Fox Theatre. The Detroit casino would be part of a sports and entertainment complex that could include a new baseball stadium financed with casino revenues, a hockey arena, a shopping mall, and the Mike Ilitch-owned comedy club under construction, according to people close to the casino discussions. The exact location for the casino was...

Detroit Free Press (MI) - December 10, 1993

TRIBE SEEKS APPROVAL OF CASINO NEAR FOX

The Bay Mills Indian Community, which runs a small casino in the Upper Peninsula, has asked the federal government to approve a casino in Detroit on an acre of land next to the Fox Theatre. The tribe has an option to purchase the land, according to an application filed Nov. 26 with the Michigan office of the federal Bureau of Indian Affairs. The land is located in an area of commercial buildings and vacant property north of Grand Circus Park at Woodward and Adams.

Detroit Free Press (MI) - August 11, 1994

NEW CASINO PLAN ON TABLE FIRM SAYS COMPLEX IN FOXTOWN COULD FINANCE STADIUM

A major casino company Wednesday unveiled plans for a casino near the Fox Theatre in downtown Detroit that would be one of the biggest in the nation. The $300-million, 10-acre project would include a 400-room hotel, a parking structure, six restaurants, two bars, a 500- seat theater, parking for 5,000 cars, a game room and child care centers. Tom Carr, senior vice-president of Indian gaming for Harrah's Casino Hotels, said the company has been working on the project for...

These attempts by Malik failed; but Malik and those financing his schemes have continued to pursue the pot of gold and are now back in Port Huron again. And Marian Ilitch, sole owner of Detroit's MotorCity Casino has reportedly been pushing the Port Huron plan.

For a compendium of posts on this topic: Posts set context and detail scheming, conflict$ behind Detroiters' off-reservation casino proposal

Plans were to establish an Indian Reservation in Foxtown

In the mid-1990's casino syndicators Michael J. Malik, Sr., Tom Celani and the Ilitch Family in partnership witih Harrah's tried to locate an Indian casino for the Bay Mills Indian tribe 350 miles away from its reservation in downtown Detroit's Foxtown neighbborhood; an area where the Ilitch Family had established a significant stronghold and had plans to develop a new baseball stadium.

One plan envisioned money from the casino would be used to build the new baseball stadium but MLB's ban on involvement in/with gaming by owners, players and managers presented a roadblock.

An Indian Reservation? Right in Detroit?

May 27, 1995, Saturday
By IVER PETERSON (NYT); National Desk Late
Edition - Final, Section 1, Page 6, Column 1

LANSING -- Detroit has tried for decades to revitalize its moribund
downtown, but never before with so novel an approach as a proposal now on Gov. John Engler's desk: to create an Indian reservation in the heart of the city solely to establish casino gambling there. Michigan law prohibits casino gambling, ...

Eastern casino syndicator fears competition & seeks protections; not tribes

If SoCal Tribes feared competition, they would be endorsing plans to move Los Coyotes’ Casino to Barstow

If fear of competition was the primary motivator, Southern California’s established gaming tribes would be endorsing plans to relocate two tribes and their casinos to Barstow, in the middle of the Mohave Desert but they aren't.

Spokesmen and lobbyists for Detroit-based casino syndicators say established gaming tribes in Southern California oppose their plan to build and manage dual Indian Casinos in Barstow simply because the established tribes are afraid of competition.

However, a look at a map suggests if “fear of competition” was motivating the established gaming tribes, those tribes would be endorsing any plans that might move a Los Coyotes casino to Barstow; and out of the San Diego/Riverside County area.

There are seven casinos located along the Hwy 76 corridor primarily in northern San Diego County and including the Pechanga Casino in Riverside County. Those casinos are within 30 miles of the Los Coyotes Reservation with the closest being less than 10 miles away. And most of those seven casinos are within 5 miles of one or two other casinos. If fear of competition was the primary motivator for the established tribes, casinos at Pechanga, Pala and Harrah’s Rincon among others would be endorsing a plan to re-locate the Los Coyotes' casino outside their territory, but they are not.

More likely, it’s Barwest’s fear of competition that resulted in abandoning any plans the tribe might have had for a casino on their San Diego County reservation. Barwest would have to compete with those seven casino and a dozen more.

In Barstow, the Detroit casino syndicators are virtually guaranteed there won’t be another casino within 50 miles (or an hours drive) of their dual casinos mega resort.

At home in Detroit, the people behind Barwest bankrolled a 1996 statewide ballot measure that voters narrowly approved, which ensured they would be given preferences in a competition to see who would build and own one of three commercial Las Vegas-style casinos in Detroit. As soon as they had things up and running, they helped bankroll another ballot measure to protect their casinos by virtually prohibiting any new competition from entering into the Michigan marketplace without statewide voter approval; casinos, racetracks, lotteries or otherwise.

Governor Schwarzenegger's negotiators confirmed last March (2006) that it was Barwest's interests and not the state who pushed for the unprecedented 5,044 square mile competition-free zone around a future Barwest casinos mega resort included in the Barstow gaming agreements the Governor negotiated in 2005..

Los Coyotes' absentee leaders abandon idea of on-reservation casino when neighboring tribes are betting on San Diego County with much success

Tribes to build casinos large and small

EDWARD SIFUENTES

Staff Writer

SANTA YSABEL ---- Five years after the first American Indian casino opened its doors in North County,San Diego County bands of American Indians.

About 30 miles east of Escondido, the Santa Ysabel Band of Diegueno Indians is putting the finishing touches on its casino near the northern tip of its rocky reservation overlooking Lake Henshaw.

"You are going to be amazed when you look at it," Santa Ysabel Chairman Johnny Hernandez said proudly about the casino. "It's a great view."

The 700-member tribe plans to open its casino in March. When it opens, it will join four others in the area north of State Route 78 and east of Interstate 15 at the Pala, Pauma, Rincon and San Pasqual Indian reservations. The La Jolla Band of Luiseno Indians, which opened in 2002 a small "slot arcade," closed it two years ago while it plans a larger facility.

Late start

North County casinos now attract thousands of visitors to the area. They have become economic engines for local Indian communities that were mired in poverty and whose residents were increasingly leaving them in search of better opportunities elsewhere.

Santa Ysabel tribal leaders said they hope their casino will generate enough revenue to provide health care for their elders, education for their young and better infrastructure for their community.

The casino will compete for customers with others closer to major highways. That's why the tribe intentionally kept it small, at about 35,000 square feet and 349 revenue-generating slot machines. Keeping the number of machines under 350 will allow the tribe to continue to receive stipends from the revenue-sharing trust fund from wealthier tribes' casinos.

Hernandez said they chose the spot perched on the hill for its scenic beauty. His tribe hopes to capture some of the thousands of travelers who visit Julian and the surrounding countryside looking to get away from "city life," Hernandez said.

"We made it our casino," Hernandez said. "We didn't want to make it Harrah's."

Harrah's, the Las Vegas casino entertainment giant, is a partner with the neighboring Rincon Band of San Luiseno Indians in a huge resort casino with a high-rise hotel near Valley Center.

Residents and some county officials have raised concerns over increased traffic accidents and crime as a result of the casinos.

"We have many people call us about the accidents there," on State Route 76, said Sheila Walson. She and her husband, Gerald Walson, are Bonsall residents and community activists on traffic issues related to State Route 76.

Last year, San Diego County sheriff's Lt. Sean Gerrity, commander of the Valley Center-Pauma substation, released a report that said the influx of casino customers was the most reasonable explanation of why crime figures more than doubled from 1999 ---- when there were no casinos in the area ---- to 2005.

But tribal leaders say they have contributed money to the county, as part of their state agreement, for law enforcement, emergency and fire services to help offset some of the problems.

New players

While Santa Ysabel begins its venture into gambling, two other tribes in the area have already negotiated deals with the state, allowing them to build larger casinos with more than 2,000 slot machines each. The Pala Band of Mission Indians owns a large-scale casino hotel and resort 15 miles north of Escondido.

The Pauma Band of Mission Indians a few miles east of the Pala Indian Reservation announced last year that it will build a $300 million casino and hotel with the help of its partners, the Mashantucket Pequots' Foxwoods Development Co.

Hernandez said he's not worried about competition. Most tribal leaders say that having a cluster of casinos attracts visitors to the area, benefiting all.

Alan Meister, an economist with the financial consulting firm Analysis Group, said that San Diego County tribes have reason to be optimistic. San Diego, Riverside, Orange and Los Angeles counties have a combined population of about 18 million.

"There are definitely going to be competition effects," Meister said. "That's why you see all the advertising. They want you to choose one over the other, but there are a lot of customers to go around."

In his annual Indian Gaming Industry Report, Meister estimated that Indian gambling revenues grew about 24 percent, from $5.8 billion in 2004 to $7 billion in 2005. There are 57 Indian casinos in California ---- including eight in San Diego County ---- with about 60,000 slot machines."

Based upon the continued statewide growth of Indian gaming, California does not seem to be near its saturation point," Meister wrote in his report. "Thus, an increase in the supply of gaming may continue to yield positive returns."

San Pasqual

Leaders with the San Pasqual Band of Mission Indians seem to agree. The tribe's casino is expanding to more than double its size, from 43,000 to 110,000 square feet. In November, casino officials unveiled a new six-story parking structure.

The $114 million project will also add a larger buffet area, a steak house, lounge, three bars and other amenities. When completed, the larger casino will accommodate 2,000 slot machines, said Joe Navarro, president of the tribe's casino development group.

Navarro said business is good and the expansion will meet growing customer demands."Our expansion is 100 percent guest-driven," he said. "We are bursting at the seams. We set records on our small facility. It's definitely a need-based expansion."

Navarro said the tribe abandoned a plan to build a larger casino and resort overlooking Lake Wohlford on the southern end of the reservation due to road access problems and other hurdles. He said the tribe instead plans to build on the current site, possibly adding a hotel later on.

Plans big and small

A few miles north of the San Pasqual reservation, the Pauma tribe's project is undergoing an environmental impact review ---- a requirement under agreements that tribes sign with the state. A new deal signed with Gov. Arnold Schwarzenegger in 2004 allows the tribe to operate more than 2,000 slot machines in exchange for paying the state more money.

For the project, Pauma originally struck a management deal with Las Vegas-based Caesars Entertainment. But the deal fell through after the company announced it would be sold to Harrah's, which is a partner with the neighboring Rincon tribe. A deal with Hard Rock Hotel & Casino also failed due to disagreements over the terms of the contract, tribal leaders said.

The new partnership announced last year with Foxwoods is expected to produce a 171,000-square-foot casino with about 90,000 square feet of gambling space and up to 2,500 slot machines. The complex would also include a 400-room hotel, a 1,500-seat event center, 2,500-seat outdoor amphitheater, and multiple retail and restaurant facilities.

The Mashantucket Pequots' Foxwoods Development Co. operates Foxwoods casino, one of the largest casinos in the country with 7,100 slot machines and a 1,400-room hotel in eastern Connecticut."

Our reasons for partnering with the Pequots on this project involves more than the fact that they bring with them a spectacularly successful track record," Pauma Chairman Chris Devers said in a statement announcing the project. "The Pequots respect native sovereignty and have a long history of struggle and perseverance, and we can relate to that."

Farther east of Pauma, the La Jolla band unveiled a plan last year to build a 35,000-square-foot casino with 500 slot machines, a 5,000-square-foot restaurant and a 150-room hotel. The tribe's Web site describes the first phase of the project as having a casino with 349 slot machines, and subsequent plans include a golf course, expanded casino and other entertainment.

At Santa Ysabel, Chairman Hernandez said the casino is attracting tribal members back to their ancestral home. His tribal government is already working to provide electricity to reservation homes that did not have it before.

"This is a springboard for economic development, to get electricity, bring water, build better homes and roads on the reservation," he said.

Contact staff writer Edward Sifuentes at (760) 740-3511 or esifuentes@nctimes.com.

The Detroit Gaming Syndicators: Marian Ilitch, Michael Malik and Tom Celani

For almost 15 years, the trio of Detroit business leaders has been entangled in a web of casino syndication companies and affiliates. Together they bankrolled MotorCity Casino, The Little River Casino Resort in Manistee and various urban casino proposals with Harrah's and the Bay Mills Indian Community.

In 1993, Thomas Celani (a Bloomfield Hills, MI businessman; once president of his family's prized Detroit Miller Brewing distributorship; ventured into gaming as a major shareholder in slot machine manufacturer SODAK Gaming Inc.) first partnered with Michael J. Malik, Sr. (a Detroit area developer and self-identified entrepreneur) to form North American Gaming (NAG), a developer and operator of gaming facilities. Concurrently Celani formed TVC Enterprises Development Co. to represent his interests and at the same time Malik formed MJM Enterprises Development Co.

Their first big idea came together in 1994: a Bay Mills Indian casino in the Ilitch dominated Foxtown area of downtown Detroit in partnership with Harrah's; the casino would fund a new adjoining major league baseball park. While that plan made little progress, it was the start of an ongoing relationship between Celani, Malik, the Ilitch Family, the Bay Mills Indian Community and Las Vegas heavy-hitters like Harrah’s, Circus Circus and MGM Mirage.

North American Gaming backed and helped finance the 1994 casino ballot proposals in Detroit. Although approved by local voters, Governor Engler blocked the Detroit casinos from moving forward at that time.

In November 1996, Michigan voters statewide approved Proposal E, the creation of three Detroit casinos, by a 52-48 percent margin out of nearly 3.5 million votes cast. Z.R.X. L.L.C. (ZRX), a partnership that would include Celani, Ilitch and Malik bankrolled the campaign supporting Proposal E by contributing $5 million+ to fund an “11th hour” campaign advertising blitz. In recognition of their role in the success of Proposal E, Atwater Entertainment Associates a partnership of more than 100 Detroit area leaders who had originally contributed at least $25,000 each for membership in the LLC had agreed to form Atwater Casino Group (ACG) with ZRX and awarded Celani, Ilitch and Malik 85% ownership interest in ACG.

Within months of the Proposal E victory, Celani and Malik had brought in Circus Circus Enterprises and together with Atwater Casino Group formed Detroit Entertainment LLC, the company behind MotorCity Casino. Circus Circus agreed to provide the capital funding needed for the planning and development of MotorCity Casino and also reimburse Malik and Celani for the costs of the Proposal E campaign -- reimbursement of political contributions is generally not legal in states with post-Watergate political reform laws. Circus Circus would oversee MotorCity's management once it opened. And on November 20, 1997, Detroit Mayor Dennis Archer announced Detroit Entertainment would be one of two entities invited to negotiate casino development agreements with the City of Detroit.

In 1999, word leaked out of the Michigan Gaming Commission that several casino investors wouldn’t be qualified for gaming licenses. Malik was one of those individuals. Before facing disqualification and a reduction of share price, Malik sold his shares in MotorCity Casino to Marian Ilitch, moved into the offices of Ilitch Holdings, Inc. and then went into partnership with her on other gaming projects. Celani and Ilitch retained their collective 35% interest in MotorCity Casino.

Tom Celani was one of those Marian Ilitch bought-out in 2005 when she acquired 100% ownership of MotorCity Casino; however, not before Celani and other minority shareholders in MotorCity Casino sued Ilitch, seeking damages of more than $50 million, saying she violated the terms of their partnership when she negotiated the deal to buyout Mandalay Resort Group's 53.5% interest in MotorCity.

At the same time the trio pursued gaming opportunities in Detroit and plans to establish MotorCity Casino, their North American Gaming (Celani, Malik & Ilitch) began working with the Little River Band of Ottawa Indians on plans for a Manistee, MI, casino resort and the necessary gaming compact required from the State of Michigan. They were instrumental in gaining Compact approvals in 1998.

In July 1999 the Little River Band of Ottawa Indians signed a management services agreement with Celani, Malik, and Manistee Gaming LLC. Celani and Malik were the first in Michigan to be awarded such a contract by an Indian casino. The National Indian Gaming Commission (NIGC) permits such outside contracts for tribal casinos for the first five years of operation with payments up to 30% of profits. The tribe opened their temporary Little River Manistee Casino that same month.

1999 served to be a banner year for Tom Celani when he reportedly pocketed more than $30 million upon the sale of Sodak Gaming Inc. of Rapid City, S.D., to the world's biggest slot machine maker, International Game Technology (IGT) of Reno, Nev. Celani was flush with cashand poised to make some new significant investments.

Throughout the better part of the 1990s; Tom Celani, the Ilitch Family and Michael Malik, expended substantial resources pursuing opportunities in Michigan to expand commercial and Indian gaming. With a couple of big success stories under their belts, the trio decided to parlay their experience beyond Michigan but took different paths.

Starting in 2000, Ilitch and Malik pursued casinos in New York; Hawaii; Barstow, California; and with the Bay Mills Indian Community. It's unclear if Celani was also an investor in any of these projects. In fact, it's not known who if anyone else Ilitch and Malik have included in their various ventures.

Celani, working with attorney James D. “Jim” Oegema, headed west and partnered with the Smith River Rancheria (Smith River Gaming LLC); Paskenta Band of Nomlaki Indians (Luna Gaming –Corning LLC); and Ewiiaapaayp Band of Kumeyaay Indians (Luna Gaming-San Diego LLC). They acquired ownership in the commercial Red-Dolly Casino in Blackhawk, Colorado. Today Celani has consolidated his numerous business ventures under the “Luna” family of companies’ banners: Luna Gaming, Luna Properties and Luna Entertainment. Luna, among other assignments, will now manage the casino in the Cal Neva Resort at Lake Tahoe once owned by Frank Sinatra.

Ilitch/Malik casino syndication partner to run Lake Tahoe casino once owned by Sinatra.

Former MotorCity Casino investor Celani to renovate, run Lake Tahoe casino

By Bill Shea

11:57 am, January 3, 2007

A former owner of Detroit’s MotorCity Casino now plans to operate a Lake Tahoe casino that was owned for a short time in the 1960s by Frank Sinatra

The Nevada Gaming Control Board on Dec. 21 approved Tom Celani’s license to run the Cal-Neva casino in Crystal Bay.

Celani plans to spend $35 million to renovate the 81-year old casino, hotel and spa, the Detroit Free Press reported. He said he’s hired historians to help restore the casino resort, which straddles the Nevada-California line, over a year beginning in April.

Celani’s Luna Gaming Tahoe L.L.C. will lease the casino beginning today from its owner, Namwest L.L.C. Terms of the lease were not disclosed.

Celani, a Bloomfield Hills resident who helped fund the successful 1996 statewide referendum on casino gaming in Detroit, sold his 10 percent stake in MotorCity to Marian Ilitch in April 2005.

PRINTED FROM: http://www.crainsdetroit.com/apps/pbcs.dll/article?AID=200770103002&template=printart

© 2007 Crain Communications Inc.

From the Frank Sinatra Biography ...

"Sinatra lost his Nevada gambling license in 1963 after a Mafia leader, Sam Giancana, was seen in the Cal-Neva Lodge gambling casino in which Sinatra then held a major interest. The license was restored in 1981."

you may also want to see these posts:

* The Verifiable Truth: Ex-owner of MotorCity gets Nev. casino license

* The Verifiable Truth: The Detroit Gaming Syndicators: Marian Ilitch, Michael Malik and Tom Celani

* The Verifiable Truth: History of Cal Neva - Sinatra's one-time casino resort property

Gambling Stocks Still Look Like Good Bet

November 21, 2006 2:30 PM ET

Gambling Stocks Still Look Like Good Bet

NEW YORK (AP) - You've gotta know when to hold 'em.

Investors recently doubled down on gambling stocks despite a yearlong winning streak, wagering that expansion will spur growth and bettors will keep spending even as the economy softens.

The Dow Jones U.S. Gambling Index has surged more than 35 percent since the start of the year, easily outpacing the broader market as represented by the Standard & Poor's 500 index, which has added about 12 percent.

The gambling index, comprising 67 stocks weighted primarily toward large hotel-casino operators such as Harrah's Entertainment and MGM Mirage, has generally tracked sentiment about the overall economy.

After rising through April, the index gave back most of the gain amid worries consumers would be cash-strapped as oil prices climbed steadily ahead of the summer months.

"Those concerns didn't come to fruition," said Robert LaFleur, a gaming, lodging and leisure industry analyst with Susquehanna Financial Group. "Expectations were that higher gas prices and a softening housing market would pressure the industry, but visitation has remained strong."

Part of the reason is that casino performance does not necessarily track consumer spending, despite investor reaction.

"The Las Vegas strip market is driven more by overall economic growth," said Morningstar equities analyst Sumit Desai. "The stocks are more cyclical than the underlying business," he said.

And gamblers don't necessarily curb spending in economic slowdowns, anyhow. "The high-roller business is always going to be strong because these guys don't worry about short-term factors," LaFleur said.

Either way, there was more good news Monday when a leading economic indicator edged higher, suggesting the recent housing slump was not enough to offset lower gas prices and a rising stock market.

Another boost for the sector, said Frank Fahrenkopf, head of industry trade group American Gaming Association, is casino operators' expansion into other businesses.

"The industry has moved to the total entertainment package," he said. "People come to destination resorts -- they come to shop, to see shows and to play golf."

That trend in Las Vegas, which attracts more families and couples to what was long considered a bachelor's paradise, has turned off some of the city's more committed gamblers, but it has benefited the operators.

"It used to be that a casino's bottom line was about 65 percent gaming revenue," Fahrenkopf said. That's down to around 40 percent now at some companies, even as gaming revenue surged past $30 billion for the first time last year, according to the AGA.

And casino operators are boosting investment into additional entertainment venues. There are $20 billion worth of projects in Las Vegas alone that will be completed by 2010, said Desai.
"They want to offer a resort experience instead of just gambling," he said.

The danger is that new casinos and hotels could lead to excess supply. "That could be a hiccup for the industry, especially if it coincides with an economic slowdown," he said. "But generally the industry does a great job at managing growth."

Driving that growth -- in Las Vegas and Atlantic City, N.J., and also in the numerous other states that license American Indian casinos -- is increased social acceptance of gambling, Fahrenkopf said. The lobbyist traced the start of public softening toward gambling back to the reintroduction of lotteries in 1963 in New Hampshire. Now 48 states have some form of legalized gambling, from lotteries to horse racing to casinos.

But the surge that benefited casinos most came as poker soared in popularity, first through Internet sites and then, starting in 2002, televised tournaments. The Poker Players Alliance, a player-based lobbying group, estimates there are more than 70 million Americans who play poker. The number of poker tables in Las Vegas has risen to 405 in 2005 from 142 in 2003.

"Poker clearly helps," said LaFleur. "It's a tough game for casinos to make money on, but it attracts gamblers."

Harrah's, the country's largest casino operator, has turned the game's popularity into a major revenue source with its annual World Series of Poker. The company is currently being courted by private-equity groups with a $15 billion buyout offer, excluding debt assumption.

The offer, which would be about a 25 percent premium, helped bolster the sector, LaFleur said, because it sets a mark by which to determine the value of other companies in the sector. "The stocks often trade up in anticipation of other deals," he said.

The news helped Harrah's stock recover after it stumbled earlier this year on investor concerns about its lack of a presence in Asia.

Las Vegas Sands Corp., run by billionaire Sheldon Adelson, and Wynn Resorts Ltd., run by Steve Wynn, have licenses to operate in Macau, China -- the former Portuguese colony on the Chinese mainland that is now considered the next gambling paradise.

The expansion overseas marks the first time U.S. casinos have ventured abroad, lured by a strong gambling culture in Asia and the Chinese government's desire to attract foreign direct investment.

"The market trends are very strong in Asia and there are no indigenous companies with the experience to operate on the scale they want in Macau," LaFleur said, adding that Singapore is also a growing market for U.S. casinos.

The attraction of new markets is clear, but Desai warns that intense capital spending could hamstring some companies. "A lot of times investors think you can't lose with these stocks, but Trump went bankrupt two years ago.

"The problem is they require a lot of investment to keep them fresh and new and they have a ton of debt on the balance sheets. They are inherently risky investments," he said.
You also need to know when to fold 'em.

© 2006 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

http://news.moneycentral.msn.com/printarticle.aspx?feed=AP&date=20061121&id=6217238

Standard & Poor's '07 Outlook - Hotel & Gaming sector

12.11.06

Part 2:
What Will '07 Bring for Key Sectors?

S&P Ratings sizes up prospects for industry groups in the coming year. Part 2 includes a look at media & entertainment, oil & gas, and retailers

Hotel & Gaming: Growth Will Moderate
Standard & Poor's expects solid lodging industry performance again in 207, with revenue per available room (RevPAR) in the U.S. likely to grow in the mid-single-digits. S&P does, however, expect a decline in the rate of RevPAR growth from about 8% in each of the last three years. With still-record-high occupancy levels across all price segments, pricing power in the industry remains strong, mitigating any concern about a meaningful slowdown in 2007. Given prospects for continued strength in global lodging markets, Standard & Poor's would expect an upward bias again in 2007 for ratings, in the absence of debt-financed acquisitions, including those that take companies private.

For the U.S. gaming industry, S&P expects revenue growth to moderate further in 2007, reflecting a continued gadual slowing of the U.S. economy. Despite an anticipated modest decline in consumer discretionary spending, industry revenues are still expected to expand overall. From a ratings perspective, S&P does not expect overall credit quality in the sector to materially deteriorate in coming periods despite aggressive expansion plans by many industry participants. However S&P lowered the rating on Harrah's Entertainment (HET) to below investment grade on the news that it received an offer to be acquired by private equity investors.

Still, with most companies in the gaming industry carrying stable or positive outlooks, any weakness in credit quality will most likely be reflected by outlook revisions rather than rating changes. Further debt-funded transactions, however, could prompt more downgrades. (Full Story)

http://www.businessweek.com/investor/content/dec2006/pi20061208_407157.htm

Ilitch bankrolling Bay Mills Indians for more than a decade

Team Ilitch has been bankrolling efforts by the Bay Mills Indian Community to build another casino in Port Huron, MI

A surrogate testified last month (November 2006) that more than $10 million has been spent in legal fees alone.

Previously, publicists for Detroit's Ilitch Family (Mike and Marian Ilitch and their seven children), founders of Little Caesars pizza carryouts and owners of the Detroit Tigers and Detroit Red Wings sports teams, have craftly denied any significant commitment to or stake in plans for another Bay Mills Indian Community casino -- this one in Port Huron, MI.

Documents filed with the Securities and Exchange Commission indicate in 1994 Michael Malik and Tom Celani, Ilitch business associates, introduced the Bay Mills Indian Community to the Ilitches when the pair proposed the Indians develop an off-reservation Harrah's managed casino in the Foxtown area of Detroit (the Ilitches have substantial real estate holdings in Foxtown). That proposal eventually died. But now, Marian Ilitch (through Ilitch Holdings, Inc. subsidiary IH Gaming, Inc.) owns 100% of MotorCity Casino, one of Detroit's three large commercial casinos.

Then there were reports of Ilitch and affiliates' involvement with Bay Mills Indians land swap proposals for Auburn Hills, Vanderbilt, Charlotte Beach and Port Huron:

06.16.05
NewsDay.com

". . . In the 1990s, both backed the Bay Mills Indian tribe in their ultimately failed bid to construct a casino in Port Huron, Mich. . ."

But now, there's been recent confirmation that the Ilitches and their casino syndication associate Michael J. Malik, Sr. remain invested in and active with the Bay Mills Indian Community in Port Huron:

11.20.06
Port Huron Times Herald

" . . . Mike Malik, a Clay Township native who has been working with the Ilitch family for six years to develop a casino at the Thomas Edison Inn, raised several questions at that March council meeting.

"He expressed doubt, for example, that all 11 of Michigan's recognized Indian tribes would endorse DeFeo's casino. A single tribe could block the project, including the Bay Mills band that's part of the Edison Inn proposal. . ."

". . . Dick Cummings, president of the Michigan Machinists Council and a strong supporter of the Malik-Ilitch casino, went even further.

"I'm no genius, but I can do the math," Cummings said. "If a person goes around asking $100,000 a point, that adds up to $10 million. Well, no one builds a casino for $10 million. You don't build the parking garage for that. (Malik and the Ilitches) have spent more than $10 million just in legal fees."

You may also want to review these posts:
The Verifiable Truth: Rep. Candice Miller introduced HR 813 on February 13, 2003 to approve settlement of unsubstantiated land claims and a casino for Port Huron

The Verifiable Truth: Aide negotiated '11th Hour' Port Huron casino deal for Gov. Engler; then returned to private practive, retained by those who got the deal

The Verifiable Truth: Voters & local officials questioned Gov. Engler's flip-flop on casino policy and the Port Huron casino deal he signed on his way out the door.