Caesars Plans $25-Million Palm Springs Indian Casino : Gambling: Tribal council sets aside downtown site. Pact is seen as an opening for Vegas-style gaming in Southland.

Caesars World Inc. unveiled plans Monday to build a $25-million Indian gambling casino in this community’s struggling downtown, positioning itself as the prime player in bringing Las Vegas-style gambling to Southern California.

The 80,000-square-foot facility will be built on land owned by the Agua Caliente band of Cahuilla Indians--on whose checkerboard reservation half of the city is situated. The complex will feature the casino, restaurants, retail shops and entertainment venues.

The gambling area will equal the size of Caesars’ casino at Lake Tahoe. The casino, half of the overall facility, will be dedicated to high-stakes bingo, various card games, paper pull-tabs and other forms of gambling currently permitted on California Indian reservations under state law.

But Richard Milanovich, chairman of the Agua Caliente tribal council, said he expects California to have entered compacts with his and other Indian tribal councils around the state--which would allow full-scale Las Vegas-style gambling--by the time the casino opens in 1995.

The attorney general’s office currently is appealing a federal judge’s ruling that orders the state to negotiate such gambling compacts in good faith. The judge based his decision on the fact that because the state offers Lotto games, it cannot deny the same level of gambling at Indian enterprises that it enjoys for itself.

The judge’s ruling is one of several, in California and nationwide, that have opened the door for Indians to offer greater varieties of gambling, including the introduction of video machines that, short of dispensing actual coins, are virtual clones of slot machines. Some proponents of legalized gambling argue that it also opens up the prospect of blackjack and other popular card games in the state.

About 30 Indian reservations in California have asked the state to negotiate gambling agreements--including Agua Caliente in Palm Springs, the Cabazon and Twentynine Palms Indians in Indio and the Morongo Indians near Banning. The Cabazon and Morongo Indians currently operate casinos with lower levels of gambling.

Gambling experts say the Palm Springs region is poised to emerge with the highest concentration of gambling casinos in the state.

The partnership between Agua Caliente and Caesars shows that the growth of Indian gambling in California “has finally reached a level of maturity,” said I. Nelson Rose, a professor at Whittier Law School in Los Angeles and a visiting scholar at the Institute of Gambling and Commercial Gaming at the University of Nevada, Las Vegas.

Indian gambling, he said, “started off with ma-and-pa operators, then small entrepreneurs, then larger companies, and now we’ve got multinational companies that are heavily licensed and regulated, and which can’t afford to get into anything that is at all shaky. With Caesars, it shows the industry in California has reached full legitimacy.”

Caesars and the Agua Caliente tribal council announced a year ago a pact to build a casino; Monday’s announcement detailed the level of financial commitment and designated the actual casino site: an eight-acre parcel a block west of the Palm Springs Convention Center and across from the Spa Hotel, owned by the Agua Caliente Indians.

Even though city permission is not needed to construct the facility, city officials were euphoric in heralding the coming of the casino as a long-needed economic shot in the arm to invigorate the struggling downtown district.

The operation will “enhance the economic viability and beauty of Palm Springs,” said Mayor Lloyd Maryanov. “It will jump-start our economy. Palm Springs is back on the move, and this is the jewel of the crown.”

A preliminary architectural rendering suggests a building with dominant use of glass, domes and archways. “They didn’t want a Southwestern look,” one Caesars executive said of the Indians.

In addition to creating between 700 and 2,000 jobs--more than can be filled by the 258 Agua Caliente Indian tribal members themselves--the tribal council agreed to share a percentage of its profits with the city to help pay for the cost of added police and fire protection. Maryanov said the project will generate about $500,000 a year for the city coffers in addition to helping fill downtown hotel rooms and restaurants.

“We’ll still be known for golf and tennis and for sitting in the sun,” the mayor said. “But this adds one more dimension--a major dimension--to Palm Springs.”

Milanovich said Caesars prohibited the tribal council from developing other casinos in Palm Springs until a certain level of profit is generated by the first operation. If the tribe does develop other parcels for gambling, Caesars has the first right of refusal.

Until two years ago, the Agua Caliente Indians had eschewed gambling altogether as a source of revenue, but finally decided to join the growing ranks of Indians who have embraced the industry and asked gambling companies to bid for the contract.

Milanovich would not disclose Caesars’ share of the revenue, in exchange for funding and managing the casino, or how the Agua Caliente Indians plan to spend their profits. He said the casino is expected to make a net profit of $30 million a year.

Henry Gluck, chief executive officer of Caesars, said the company competed with about a dozen other gambling interests to win the Agua Caliente contract, banking on projections of revenue the current level of Indian gambling is expected to generate.

Even with the level of gambling now allowed, Gluck said, a casino in Palm Springs would attract a Los Angeles marketplace unwilling to travel to Las Vegas or Laughlin, and would be another motive for international travelers already considering a Palm Springs destination.

“We feel we can make a major impact by weaving the best that Caesars has with the best that Palm Springs has,” Gluck said.

Howard Dickstein, a Sacramento attorney who represents several Indian reservations seeking enhanced gambling operations, said the Caesars casino “adds credibility to Indian gaming. It gives an indication that significant and sophisticated financial interests think it’s here to stay.”

Construction will begin shortly after the tribal council’s application is considered by the National Indian Gaming Commission, Milanovich said, and may take up to 18 months to complete.