In The News : 2005

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A Would-Be Las Vegas Rolls the Dice

November 4, 2005
This article also appears on another site: The New York Times

AFTER winning several thousand dollars at the blackjack table, Sam May, 26, a lawyer from Costa Mesa, Calif., strode past the burly bouncer and was whisked 26 floors above the casino floor. With 50 Cent blaring through giant speakers, he and four friends were escorted to a booth marked "reserved" next to the retro-futuristic dance floor, where a gaggle of buxom women were vying for attention.

"The managers treat us like royalty here," said Mr. May, who wore a crisp white shirt and shiny loafers, his hair tousled like a rock star's. "In Vegas, they don't pay you any mind."

For those aching to be high rollers, but without the requisite notoriety, there's now an alternative to standing outside the ultra-exclusive Ghostbar in Las Vegas, chitchatting with the other rejected. It is called the Spacebar, and it's not in Nevada, but in the tumbleweed town of Cabazon, Calif., at a new gambling complex called the Morongo Casino, Resort and Spa.

In a bid to siphon off some of the hip gamblers from Los Angeles, who have revived Las Vegas as a young and trendy party town, the Morongo Band of Mission Indians opened the towering casino resort last year in the hot California desert, about two hours east of Los Angeles and 20 minutes shy of Palm Springs, which is also experiencing a resurgence as a glamorous Hollywood getaway.

Taking aim at the Lindsay Lohan crowd, the tribal elders did away with the tepees and arrowhead motifs that typify most American Indian casinos and instead gave the resort an über-modern décor, sleek V.I.P. lounges and miles of velvet ropes. "When you walk in, you won't know whether you're in Las Vegas or Atlantic City," said Maurice Lyons, the tribal council's 55-year-old chairman. "We want the young in-crowd that likes to party and gamble. They're the ones with the disposable income."

Whether the gamble pays off remains to be seen. But the betting pool has clearly grown. In just the last five years, the greater Los Angeles area has witnessed a surge of new casinos along Interstate 10, forming a sort of sprawling, stretched-out Las Vegas Strip.

"This is the fastest growing tribal gaming market in the country," said John Mulkey, a gaming analyst at Wachovia Securities in Charlotte, N.C. American Indian casinos in California raked in $5.3 billion last year, twice more than any other state, according to the Analysis Group, a Los Angeles research company.

"The southern California casinos have diverted some traffic from Vegas," said Eric Hausler, a gaming credit analyst at Bear, Stearns in New York. Instead of making the five-hour drive to Las Vegas from Los Angeles, Mr. Hausler added, "Customers may be staying closer to home, especially as gas prices go through the roof."

Spearheading the charge is the Morongo Casino, which is trying so hard to recreate Las Vegas that it blanketed California highways with billboards that claimed, "What happens in Vegas happens at Morongo."

That may strike some as a stretch, given that the Morongo tribe was, until recently, better known for wicker baskets and roadside almond stands. But that changed in 2000, when California voters approved a constitutional amendment allowing blackjack tables, poker rooms and, most important, slot machines on American Indian reservations.

The 1,100-member Morongo tribe, which had already built a spacious casino, envisioned something even grander. Using $250 million of its gaming revenue, the tribal leaders hired the Jerde Partnership, an architectural firm from Venice, Calif., that designed the Palms Casino in Las Vegas, site of MTV's "The Real World" and Bravo's "Celebrity Poker Showdown."

In the vernacular of Las Vegas architecture, the firm built a cavernous, low-slung casino topped by a monolithic 304-room hotel that rises 27 stories tall, like a mutant cactus in the middle of a desert plain. Bathed in colored lights, it's the only structure visible at night for miles. The 44-acre property also features six casitas with outdoor showers, a swimming pool with 16 cabanas outfitted with LCD televisions, and an artificial warm-water river.

"It's a little oasis," said Heidi Gider, 31, who was ensconced in Cabana 5 with several women last Friday, a windup to a bachelorette party. A fund-raiser from Washington, Ms. Gider flew in for her friend's wedding the next day. "It reminds me of the Luxor in Vegas."

Design alone, however, doesn't guarantee the beautiful people. So the gray-haired tribal leaders also recruited the N9NE Group, which operates some of the hottest venues in Las Vegas, including the Ghostbar, Rain and N9NE (pronounced "nine") Steak House at the Palms. They translated the formats for Morongo, barely tinkering with the names: the SpaceBar, Desert Rain and N9NE Steak House.

FOR a time, the strategy seemed to work. Long lines spilled out of Desert Rain. The V.I.P. areas, which themselves followed a pecking order, were packed with strapping men in tight shirts and svelte women in hip-hugging jeans. The valet drive-up was clogged with Hummers and BMW convertibles.

But as the novelty wore off, so have the crowds. Or at least the "right" kind of crowd. Three months after opening, the $100 tables at the club sat empty, said Michael Morton, co-owner of the N9NE Group. "It wasn't our demographic," Mr. Morton added. "Instead of the L.A. market, we got a Riverside County market. It's working-class. It was very hard for those people to meet our dress code, much less afford to eat in our restaurants."

Another problem, Mr. Morton said, was that the advertised two-hour trip from Los Angeles was unrealistic. "If you get on I-10 during Friday rush hour, you're looking at a four-hour-plus drive," he said. "You might as well return to Vegas."

He followed his own advice. In June, the N9NE Group and Morongo severed ties acrimoniously, and the venues were shut. The two sides have been battling in court, with a federal judge dismissing the N9NE Group's lawsuit against the tribe, citing Morongo's sovereign status. A second lawsuit is pending.

Whatever happens, the fun-loving hipsters depicted in Morongo's latest TV commercials were as elusive as the Wheel of Fortune jackpot last Saturday night. Sure, there were crowds waiting for slot machines and lining up at the check-cashing counter. But they were mostly older and local. "This is relaxation for me," said Clara Henderson, 74, a nurse from the nearby suburb of Yucaipa, Calif. Dressed in a floral muumuu, she was feeding quarters into two slot machines while chain-smoking Marlboro Lights. "It's nice."

To be fair, Morongo is currently negotiating with another club operator to take over Desert Rain and the steak house. (The Spacebar has reopened as the 360 lounge.) And revenue is running 32 percent ahead of last year, said William Davis, the casino's general manager. (The tribe doesn't release financial figures. But the number of slot machines, its primary source of revenue, is capped at 2,000 by the state.)

But gaming experts say that Morongo may be targeting the wrong crowd. "It's starting to show signs of overshooting the market," said Bill Eadington, director of the Institute for the Study of Gambling and Commercial Gaming at the University of Nevada, Reno. "They want to be a destination resort, but this is essentially a local market."

Unlike Las Vegas, with its dense concentration of attractions, the nearest tribal casino is 20 minutes away by car. And the other casinos may also have expanded too fast. A month after Morongo opened, the Cabazon Band of Mission Indians opened the Fantasy Springs Resort Casino in Indio, Calif., at a tune of $200 million. The tribe is now reportedly in debt and had to lay off dozens of workers and disband its police and fire departments. A spokeswoman for the tribe, reached by telephone, declined to comment.

"Five years ago, we thought it would have a greater impact on Las Vegas, but that really hasn't happened," said Mr. Hausler from Bear, Stearns. "They don't have the critical mass."

Nearby tribes have taken note. "Just because every other tribe is building casinos with swimming pools doesn't mean we're going to do the same," said Gary Kovall, a lawyer for the Twenty-Nine Palms Band of Mission Indians, which owns the Spotlight 29 Casino in Coachella, Calif.

Even so, Mr. Kovall said that the Twenty-Nine Palms tribe is looking to develop some kind of mixed entertainment complex on its 240-acre reservation, whether it be movie theaters, a theme park, a hotel or all three. Las Vegas, after all, was only a smattering of casinos along a two-lane highway when Bugsy Siegel arrived in the 1940's.

"Look on both sides of the freeway," Mr. Kovall said, referring to Interstate 10. "It's all construction signs."

Related Images

Morongo exterior