Interior Reverses Gaming Approval for Scotts Valley Casino

VALLEJO, Calif. – The Interior Department has reversed gaming approval for the Scotts Valley Band’s proposed casino site. The ruling prompted the tribe to suspend its newly opened preview casino and threatens plans for a $700 million development.

Interior concluded that the 160-acre parcel does not qualify for gaming under the restored lands exception in the Indian Gaming Regulatory Act. The decision found that the tribe had not demonstrated the required significant historical connection to the Vallejo property.

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Interior Rejects Restored Lands Claim

“I have determined the Band has not demonstrated the requisite significant historical connection”, Assistant Secretary for Indian Affairs William H. Kirkland III wrote in the decision. He said the tribe could not conduct gaming on the parcel through the restored lands exception but offered no opinion on whether another exception could apply.

The ruling reverses a January 2025 Interior decision that approved the land acquisition and found the parcel eligible for gaming. That determination allowed the tribe to pursue gaming, government facilities and housing at the site near Interstate 80 and Highway 37.

Interior began reconsidering the gaming determination in March 2025 after neighboring tribes challenged the historical evidence supporting the approval. The department maintained the land’s trust status while reviewing whether it qualified for gaming under federal law.

U.S. District Judge Trevor McFadden later ruled that Interior had violated Scotts Valley’s due process rights when it initially rescinded the determination without sufficient notice. The court allowed the reconsideration to continue but required the department to issue a final decision by the end of July.

Preview Casino Suspends Gaming

The final decision came approximately one week after Scotts Valley opened a temporary Class II gaming facility in modular buildings on the property. The preview casino admitted a limited number of invited customers before the tribe suspended operations in response to the ruling.

Class II gaming generally includes bingo and certain electronic games and does not require the state compact needed for Class III casino games. The Interior finding nevertheless removes the restored lands basis on which Scotts Valley relied to conduct gaming at the site.

The broader proposal includes an eight-story casino with restaurants, bars and a ballroom, along with a parking garage and tribal administration building. Plans also call for 24 single-family homes and a 45-acre biological preserve within or adjacent to the project area.

The department’s decision addresses whether the property is eligible for gaming under the restored lands exception. It does not state that the 160-acre parcel has been removed from federal trust or cancel the tribe’s proposed housing and government facilities.

Tribe Plans Federal Court Challenge

Scotts Valley Chairman Shawn Davis said the tribe intends to challenge the decision. “The administrative record overwhelmingly supports the Tribe’s gaming eligibility”, Davis said. “We will move quickly to challenge the decision in federal court.”

No new lawsuit had been confirmed when the decision was announced. The tribe described the suspension of preview casino operations as temporary while it considers its legal options.

The Yocha Dehe Wintun Nation, Lytton Rancheria, United Auburn Indian Community and Kletsel Dehe Wintun Nation have opposed the Vallejo project. Opponents contend that the property lies within Patwin ancestral territory and dispute Scotts Valley’s evidence of historical ties to the land.

The expected court challenge will determine whether Interior’s final reconsideration decision remains in force. Until then, gaming at the preview facility is suspended, and the larger casino cannot proceed under the restored lands exception.

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