Stakes raised for cities as new cardroom opens
Woodland operation could affect rivals, revenue in La Center
Wednesday, February 1, 2012
Woodland, a city known for its freeway-stop business district and blue-collar workers, has now placed a bet that its new Oak Tree cardroom can take a $7.3 million bite out of the casino business in neighboring La Center.
And the stakes will be even higher when the owners of Woodland’s new casino build a planned 15-table annex, already approved for the old Parr Lumber site behind the Oak Tree. Woodland City Council members lifted a ban on gambling establishments more than a year ago.
La Center’s four cardroom-restaurants -- The Palace, The Last Frontier, The New Phoenix and Chips Casino -- are among the top 10 moneymaking, nontribal cardrooms in Washington, according to a new report issued by the Washington State Gambling Commission. La Center cardrooms brought in more than $31.3 million in gross receipts in the year ending in June 2011, which meant the town collected $3.1 million from its 10 percent tax on gambling receipts.
Operators of Woodland’s new Oak Tree Casino expect to make $7.3 million in their first year of business, which would translate to $292,000 in city taxes for Woodland, which is collecting 4 percent of the gross receipts. The council voted to raise the city’s take to 5 percent in 2013.
“Our city is not unlike any other in the state,” said Mary Ripp, Woodland’s Clerk Treasurer. “We are having issues supporting our fire and police departments.”
Municipal budget problems are not as pronounced in La Center, where four cardrooms generated an average of $3.1 million per year in city taxes every year for the last 10 years, according to the state report. The report also illustrates the importance of cardrooms to the local economy. La Center is Clark County’s only destination for gamblers from Oregon, where house-banked card games are illegal except in tribal casinos. The nearest of those is 90 miles away. Most of Woodland is located in Cowlitz County.
The new competition from Woodland could put its cardrooms and city services at risk.
“Are the new cardrooms after the same customers? I don’t know exactly.” said John Bockmier, a consultant for La Center’s cardroom businesses. “But the two communities are next to one another, so it would stand to reason that the same clientele would have to decide between one and the other.”
Situated about three miles east of Interstate 5, La Center’s downtown has a bank, a couple of restaurants, a minimart and four casinos that create a miniature Reno-like setting in the town of about 2,800 residents.
By comparison, Woodland has about 5,500 residents and boasts a more bustling commercial district of gas stations, fast-food joints, grocery stores and its new sprawling cardroom, which opened Dec. 17 off the freeway at Exit 21.
The exit number inspired the casino’s advertising jingle, said Chuck McCormick, general manager of Woodland’s Oak Tree Casino and Restaurant,
“There’s more fun at Exit 21,” he recited.
Freeway access and a road sign that towers over the interstate, an icon of the longtime Oak Tree Restaurant, were among the biggest incentives to launch a casino in the old dining establishment, McCormick said. He and eight partners spent close to $1.3 million renovating the older building to include a cardroom with 15 gaming tables.
Nine tables are dedicated to poker and six tables offer blackjack, Pai Gow and Baccarat.
The fifteen tables are the state maximum for non-tribal casinos, said McCormick, adding that La Center’s four cardrooms make a much more commanding presence with a combination of 60 tables.
“But there’s no room for growth. You need more tables to get rich,” said McCormick, a 38-year veteran of the gambling industry.
McCormick worked in
Las Vegas, then spent the last 17 years in the San Diego area, managing the 50-table Oceans 11 casino in Oceanside, Calif.
“He didn’t just fall off the turnip truck,” Bockmier said of the Woodland casino’s general manager. “(McCormick) knows the gaming industry and knows how it works.”
But McCormick said it remains to be seen whether La Center’s cardroom businesses will suffer as Woodland’s casino business ramps up.
He pointed out that opening the Oak Tree Casino could bring more gamblers into the area because of its new tables, rather than just convincing existing gamblers to shift from one cardroom to another.
“We had our grand opening on the 20, 21 and 22 of January. It was standing-room only and a lot more of our guests came from Portland,” McCormick said.
Whether the two gambling communities will compete with one another is hard to say at this point, Bockmier said. He added that it’s possible both La Center and Woodland will compete for a limited amount of gambling money threatened by other options as well.
“You could go on the Internet, you could go to a horse track, a tribal casino -- there are a number of gaming options for folks in our community,” he said.
If both destinations compete for a limited amount of gambling money, La Center could suffer as the bulk of the city’s budget comes from gambling taxes. But Woodland’s city officials seem more worried about plugging holes in their own town budget than protecting the tax base of their neighbors to the south.
For Woodland, the extra revenue would come in handy to shore up budget gaps in the town’s fire and police departments.
And the Oak Tree’s tables could be just the beginning. Allowing the site to become a casino opens the door for more cardroom gambling all over town, said Susan Arland, a spokeswoman for the Washington State Gambling Commission.
“They’ve allowed one, so they’ve got to allow more,” she said. “It either has to be all or nothing. They cannot limit the number of licenses.”
Others say the larger question is whether gamblers would support the non-tribal ventures if the Cowlitz Tribe were allowed to build its proposed $550 million casino on land the tribe owns at the La Center junction with I-5. But it could take months -- even years -- to happen. It has been more than one year since Clark County and other plaintiffs challenged in U.S. District Court the decision to allow the Cowlitz Tribe to take the 152-acre site into trust for its gambling resort partnership with the operators of the Mohegan Sun casino in Connecticut.
A 2006 study predicted that La Center’s gambling taxes would drop by 66 percent if the Cowlitz built the 134,150-square-foot casino as planned.
Only time will tell how the introduction of gambling to Woodland might shift the equation.