Thursday, June 21, 2012

LasCal, Robert Smith, Jerry Turk, Paula Lorenzo, Arlen Opper, and George Maloof

LasCal Land Development, LLC is a Nevada based LLC.

You can look up the information at the Nevada Secretary of State Business Search.  Just search for LasCal.

Here is what the ownership of LasCal is listed as:

LasCal Land Development, L.L.C.

To anyone following this blog these should all be familiar names.  Jerry Turk was a long time manager of the Pala Casino.  George Maloof was at one time owner of the Palms Casino in Las Vegas and owns the Sacramento Kings.  George Maloof is also a preferred shareholder in Wells Fargo Bank.  Arlen Opper has been involved in Indian Gaming for years along with Howard Dickstein.  Paula Lorenzo is the tribal Chairwoman of the The Rumsey Band of Wintun Indians.

The saga of LasCal goes back to the early 2000's when the Lytton Band of Pomo Indians sought to expand their Card Parlor in San Pablo into a Las Vegas style Casino with Class III gaming.  This was made possible by a a last minute provision added to a Congressional Bill by George Miller "ordering the Secretary of the Interior to take the site of the Casino San Pablo cardclub into trust for the Lytton Band of Pomo Indians, to declare the land a reservation, and to backdate the trust status so that the land would be deemed to have been Indian land since before IGRA was passed.2 The later provision was intended to exempt the proposal for a Nevada-style casino from review of community impacts." (Source Class II gaming Machines In San Pablo)

After the plans were revealed to develop a huge Las Vegas style casino at San Pablo there was a State wide backlash.  This ultimately lead to the Lytton Band of Pomo Indians dropping the plans and instead they installed Class II Bingo Like slot machines.  You may recall that earlier I wrote about the development funded by Pala to create a Video Lottery Terminal Slot Machine.

Turns out that in the early days Pala was an investor in the San Pablo Casino:

"At that time, the tribe of about 50 members teamed up with LasCal Development Corp. a
California-based development company owned by Jerry Turk. The partnership also includes the Maloof family, owners of the Palms, and California-based tribes the Rumsey Band of Wintun Indians, and the Pala Band of Mission Indians. The Paiute Tribe also has retained Las Vegas-based Construction Consultants Inc."

Tribe Taps American Nevada for Planned Development - Thursday, March 3, 2005 | 10:54 a.m. - Las Vegas Sun

From here we need to go back and revisit the lawsuit filed by RUMSEY INDIAN RANCHERIA OF WINTUN INDIANS vs Howard Dickstein.

Here are some excerpts:

Contemporaneous with the restructuring of the Tribe's investment in the Lytton Band's casino project, the Tribe invested in LASCAL Land Development, LLC ("LASCAL") an entity seeking to develop land in Nevada, belonging to the Las Vegas Paiute Tribe.

The members of LASCAL nearly mirrored those in CIGD and CIGM, including the Tribe (through RMG), the Pala Management Group, the Maloof family, Opper Development, LLC and Turk Paiute, L.P., an entity controlled by Turk, the Pala Band's business manager.

Dickstein, Zerbi and Dickstein & Zerbi also represented the Pala Band in the LASCAL transaction. Dickstein, Zerbi and Dickstein & Zerbi did not disclose to the Tribe their conflict of interest in simultaneously representing multiple parties in the transaction or explain the potential and adverse significance of this conflicted representation. They also never sought or obtained the Tribe's consent and waiver of any conflict of interest in connection with representing both tribal clients in LASCAL.

The LASCAL operating agreement contains provisions that economically benefit
Opper at the Tribe's expense. Opper Development, LLC was a 3% owner of LASCAL and the Tribe was a 45% owner. However, upon the repayment of each member's invested capital, Opper's ownership interest increased from 3% to 8.25% without any further investment of funds. Correspondingly, the Tribe's ownership interest in LASCAL decreased from 45% to 33.75%.

In or about January 2004, at the request of Dickstein and/or Opper, then-
Chairperson Lorenzo signed the LASCAL operating agreement. Opper never sought or obtained the Tribal Council's approval of his ownership interest in LASCAL, through Opper Development, LLC. Further, neither Dickstein nor Opper disclosed to the Tribal Council that the LASCAL agreement's structure contained a "carried interest" in which Opper's ownership increased at the expense of the two Tribal investors (the Tribe and the Pala Band), whose interests would correspondingly decrease. Dickstein and Opper knew, or should have known, that the Tribal Council never authorized the terms of the investment. Thereafter, Opper did obtain a 3% ownership interest in LASCAL.

Dickstein, Zerbi and Dickstein & Zerbi, failed to faithfully and zealously
represent the Tribe's interests in negotiating the LASCAL operating agreement. Dickstein,
Zerbi and Dickstein & Zerbi failed to advise the Tribe about the Tribe's rights, the nature and extent of Opper's ownership interest in LASCAL, and Opper's fiduciary duties and
responsibilities to the Tribe.

The Tribe first discovered some of the acts, injuries and damages described above
after the Tribe retained Kroll. The Tribe discovered the balance of the acts, injuries and
damages described above after Dickstein's and Opper's termination and the Tribe secured its records from them.
Notwithstanding his position as General Counsel and attendant duties, Dickstein claims it was not his role to review the agreements for the Tribe's various investments. He takes this position even though he was involved in the negotiations for some of the investments, the original executed agreements were located in his files, and the agreements frequently listed him as the Tribe's legal and/or primary contact. As important, he never told the Tribal Council that he was not reviewing the agreements, and the Tribal Council understood otherwise. Dickstein also provided no advice or warning to the Tribal Council about Opper's receipt of undisclosed compensation from the various investments and the conflicts, of interest that arose therefrom, not to mention the existence of other investment terms that disproportionately favored the investment's promoters.

Nor did Dickstein inform the Tribal Council about his own conflicts of interest in connection with the investments. For example, when Rumsey invested in the Lytton Band's casino in San Pablo, Dickstein did not explain to the Tribal Council the implications of his representing multiple clients in the same transaction. He previously had held himself out as Lytton's General Counsel, and in this deal, along with Rumsey, he represented another of bill Rumsey's co-investors—the Pala Band of Mission Indians. He also omitted that he stood to gain $1 million annually in "pre-approved fee arrangements" under the terms of the management agreement for the venture. (The management agreement also gave Opper $500,000 annually.)

Full Lawsuit here:
Rumsey Band Rancheria vs Howard Dickstein

The Lytton Band of Pomo Indians continues to operate their casino with Class II slot machines and has been wildly successful.

Casino finds a wild card in knockoff slots

Article Exercpt:

"Scaled back from a planned high-rise mega-casino, the Lytton band's modest San Pablo Lytton Casino is on a pace to gross more than $100 million in its first year solely with gaming devices – strikingly similar to slots – that do not require state approval. 

The knockoff slots – slower, bingo-based machines – are netting more than $330 a day each, an eye-popping figure that is double the take for slots on the Las Vegas strip and more than slots earn at some of the state's bigger Indian casinos."

Another article:

SAN PABLO Video bingo machines are tribe's new gamble Devices no different from slots, say critics of East Bay casino 

Casino San Pablo spokesman Doug Elmets disagreed, calling electronic bingo and slot machines "inherently different."

Unlike with slot machines, video bingo players play against each other and not the house, though the house takes a cut, he said. The bingo machines also "operate more slowly and generate substantially less revenue" than slot machines, he said.

The Lytton tribe initially had proposed building a six- to eight-story casino with as many as 5,000 slot machines on the site of its cardroom near Interstate 80, which was essentially turned into a reservation under congressional legislation authored by Rep. George Miller, D-Martinez.

While the tribe later sliced the proposed number of slots in half, it could not rally enough support in the state Legislature to approve its compact with Gov. Arnold Schwarzenegger. Under the deal, the tribe would have paid $25 million and 25 percent of its annual profits -- estimated at $155 million a year -- to state and local governments to mitigate impacts.

But the tribe does not need a compact to operate so-called Class II gaming, including bingo and card games such as poker. There are no limits on the number of machines, and the tribe will not be required to pay the state, although it already makes payments to the city of San Pablo.

Elmets said the tribe has spent several million dollars renovating its 71, 000-square-foot cardroom and could double the number of video bingo machines depending on customer demand.

The video machines will cost between 1 cent and $5 to play, and progressive jackpots will start at $50,000 with no upper limits. The machinehas a 15-inch touch-screen with a graphic representation of a bingo card. Instead of coins, it pays out with paper slips that can be redeemed, Elmets said.

But a novice looking at a picture of a "Video Reel Touch Bingo" machine on the Web site of manufacturer IGT, Casino San Pablo's supplier, could easily mistake it for a slot machine.

You may recall that Anchor Gaming originally had the contract to develop the Pala Casino but was later bought out by IGT.

So what is this all about?  I don't know, you tell me.  Is Pala an investor in the San Pablo casino or not?  Robert Smith as listed as a Manager for LasCal.  Is he representing Pala on that board or is this a personal investment? 

Are the Class II machines being operated at San Pablo based on the VLT machines which Pala funded the development of?  If so, who is earning royalties on that patent from those machines?  We know the inventors are listed as Robert Luciano (Sierra Design Group), Art Bunce, Glenn Feldman, George Foreman, Jerome Levine, and on the last page Howard Dickstein was also added as an inventor.

Class II unlike Class is not regulated by the NIGC.  There are no limits on these machines.  California is frustrated by these machines as they feel they are just slot machines but you may recall from the development of the VLT machine that the inventors used California's ban on Class III slot machines as a blue print for developing the Class II bingo-like slot machine.

Here is some more background on San Pablo and Class II gaming:

Class II Gaming Machines In San Pablo

Update:  Is Pala receiving its share of the profits from the San Pablo Casino?

See this article:

San Pablo Casino Pits City v. City, Gambler v. Gambler By RICHARD BRENNEMAN


Some of the supporters of the San Pablo proposal belong to the Maloof family of Sacramento and Las Vegas, owners of the Sacramento Kings NBA team and of the Palms Casino in Las Vegas. The Maloofs reportedly raised $2 million for Schwarzenegger’s successful gubernatorial run, and it was Schwarzenegger who signed a pact with the Lytton Tribe to build the San Pablo casino.

The Maloofs are partners with three other entities that have signed on to manage the reincarnated Casino San Pablo, two casino operating tribes—the Rumsey Band of Wintun Indians which owns and operates the Cache Creek Casino in Yolo County and the Pala Band of Mission Indians—and former Las Vegas casino owner Jerry Turk, who manages the Pala’s casino in San Diego County.

In exchange for running Casino San Pablo, the four managing partners will receive a quarter of the net profit.  (emph added)