California Tribe Sues Interior Department After Closure of $700 Million Vallejo Casino

The Scotts Valley Band of Pomo Indians is refusing to back down from its long-fought $700 million casino project in Vallejo, California. The tribe filed a lawsuit on Aug. 7 against the U.S. Department of the Interior after federal officials forced the closure of its temporary “preview casino” just days after it opened.

The dispute centers on a 160-acre parcel near the intersection of Interstate 80 and Route 37, land the tribe has been trying to develop into a full-scale casino resort for more than a decade. The preview facility, a modular setup near Columbus Parkway offering Class II bingo-style electronic gaming, welcomed its first visitors on July 25 before being shut down by Aug. 1.

Interior Reverses Course Again

The closure came after the Interior Department reversed a prior approval, ruling that the Scotts Valley tribe had not demonstrated a “significant historical connection” to the Vallejo property required under the “restored lands” exception of the Indian Gaming Regulatory Act. Assistant Secretary for Indian Affairs William H. Kirkland III determined the parcel did not meet that standard, effectively freezing the tribe’s plans for full Class III gaming, including slot machines, table games and a hotel.

The tribe’s lawsuit argues the department’s decision was “arbitrary, capricious, contrary to law, unsupported by the administrative record” and inconsistent with the Indian Gaming Regulatory Act. It’s not the first time Scotts Valley has taken Interior to court over this same parcel. A previous lawsuit resulted in an October 2025 ruling from U.S. District Judge Trevor McFadden, who found that an earlier rescission by Interior amounted to final agency action and violated the tribe’s due-process rights, a decision widely seen as a win for the tribe at the time.

A Decade-Long Fight for Vallejo

Scotts Valley Band Chairman Shawn Davis has been vocal about the tribe’s frustration with the reversal, saying the administrative record “overwhelmingly supports the tribe’s gaming eligibility” and vowing to “move quickly to challenge the decision in federal court.” The tribe acquired the Vallejo parcel through a federal trust in 2025, marking the first time it has held land in decades after being terminated as a federally recognized tribe in the 1950s and later restored in the 1990s.

The project has faced opposition well beyond the Interior Department. Several nearby tribes, including the Yocha Dehe Wintun Nation, have filed their own lawsuits challenging the federal government’s earlier approval of gaming rights on the site, arguing the casino would infringe on their own gaming territories in the region. That competitive backdrop has made the Vallejo site one of the more contentious tribal gaming disputes in California in recent years.

For now, the land remains in federal trust and Class II gaming technically remains legal there under IGRA, though the preview casino itself has been shuttered pending the litigation. California remains one of the largest states without legal commercial sports betting or retail casino expansion outside tribal land, and cases like this one illustrate just how complicated tribal gaming disputes can get even when a project clears state-level hurdles. Bettors keeping tabs on the broader California sportsbooks market will want to watch how this litigation plays out, since the outcome could reshape how future tribal casino projects are evaluated. The result of this latest lawsuit, filed in the same court that previously sided with the tribe, could determine whether the $700 million resort ever gets built or whether Scotts Valley’s casino ambitions in Vallejo stall out for good.