Revolution Leaves Havana’S Behind Gambling Doesn’T Pay Off For Ram Restaurant

The surprise closure Wednesday morning of Havana’s, the glitzy casino inside the Ram restaurant, may signal a limit to Spokane’s apparent fascination with Las Vegas-style gambling.

Havana’s is the second house-banked casino in Spokane to close in just more than a week. The Mars Casino went bankrupt and closed Nov. 24 after a judge ordered its liquidation.

“We believe the town is oversaturated with gaming,” said Kevin Kalstad, general manager of the Ram. “There are just too few players and too many places.”

The Ram opened Havana’s on the second floor of its restaurant and entertainment complex near the Arena in August. At the time, then-manager Jerry Hill projected the casino would win $5 million annually from gamblers.

During its first full quarter in operation, the casino took in only $145,000, which was not enough to pay expenses. The casino reported losing $328,000 in three months, according to Washington State Gambling Commission records.

Havana’s was one of seven house-banked casinos to open in the Spokane area since November 1997.

By August 1998, so many casinos were operating in Spokane - and so many more seemed to be on the way - that the City Council considered either a moratorium or an outright ban. A citizens group is still pushing for a ban.

Around the same time, the owner of a Spokane Valley casino predicted competition would thin the ranks, leaving only three or four establishments operating after a year.

“The Ram clearly demonstrates that the fear of Spokane becoming a mini-Las Vegas is unfounded,” said H.T. Higgins, owner of Players and Spectators in the Spokane Valley.

“As I told you before, I’m not going to have people flying into Spokane to play at my casino,” Higgins said. “We had more casinos per capita than anywhere in the state and these places can’t make it. I don’t think you will see a whole lot more come into the market.”

Although the city has lost two casinos, it has gained one and another is set for approval. The Riverbend Casino on North Market was approved for house-banked gaming in November. The Chef Restaurant on North Hamilton is scheduled to be approved in January.

And, the manager of the most successful casino in the city, Silver Lanes on the South Hill, thinks the market can still take more.

“I don’t think there is saturation yet,” said Rick Jones, Silver Lanes manager. “The Mars was busy, the Ram was busy. The market is still young yet.

“However, with the taxes, I think it will be difficult for this type of business to make it,” Jones said.

In the city, casinos pay a 20 percent tax on their gross revenues - the amount they win from gamblers.

Kalstad said the high tax was one reason for the Ram’s problems.

“The 20 percent tax was real strapping and took a real bite out of what we had,” he said.

The Ram was also looking to the future and the $17 million Kalispel tribal casino scheduled to open in Airway Heights next fall.

The Kalispel casino will be able to offer 52 gaming tables compared with the state-allowed maximum of 15 for places such as the Ram. The tribe is also allowed to offer $500 betting limits - compared with $100 for nontribal operations - and run roulette and craps games.

“We think the Airway Heights casino will put a real different spin on all the gaming in Spokane,” Kalstad said.

Higgins agrees.

“The increased threat of competition, specifically from the Kalispels, and the continued increase of gaming at Worley (Idaho) make the environment extremely competitive,” Higgins said.

“We gave it a gallant effort,” said Kalstad, “but our revenues were no where near our projections. We’re just trying to go back to family, fun and entertainment.”

Kalstad said Havana’s downtown location wasn’t as convenient as Silver Lanes, which draws on South Hill regulars.

“We have a great spot, but we are also a little bit out of the way,” he said.

For security reasons, Havana’s 75 employees weren’t told the casino would close at 4 a.m. Wednesday.

Later in the morning, movers had hauled away the card tables, which will be shipped to Lakewood, Wash., on the West Side. The Ram’s parent corporation hopes to transfer its gambling license and open a casino there.

Wednesday night, the casino had been converted to a recreation room filled with pool tables, pinball machines and video games.

Kalstad believes the company will be able to find jobs for roughly half of Havana’s employees if some are willing to transfer to Lakewood.

Graphic: Casinos’ third-quarter winnings