Dec. 16, 2010--The slots will start ringing again soon at Frank Sinatra's old gambling joint at Lake Tahoe.

The owners of the Cal Neva Resort, the fabled hotel that straddles the state line on Tahoe's north shore, said this week that they expect to reopen the property's casino in February.

Cal Neva's casino was shuttered in March, a year after the property was taken over in a foreclosure by investment firm Canyon Capital Realty Advisors.

Its idled state has stood as a symbol of the weak economy, the troubles in northern Nevada's gambling industry -- and the peculiar, often tortured history of the Cal Neva.

"They've had some schlocky owners over the years," said Bill Eadington, who lives a block from the hotel and is a gambling industry expert at the University of Nevada, Reno.

The previous owner, a Los Angeles financier named Ezri Namvar, was indicted by a federal grand jury in September on charges of running a multimillion-dollar investment fraud.

The charges weren't related to his four-year tenure as owner of the Cal Neva, during which critics said he ran the place into the ground. Namvar, who lost the property to the Canyon Capital group in an early 2009 foreclosure, has pleaded not guilty to the fraud charges.

A spokeswoman for Canyon Capital wouldn't discuss the reopening of the casino in detail.

But the plan is for the co-owner of a small Reno-area casino to operate the Cal Neva casino on a contract basis.

Rick Heaney, a veteran industry figure who co-owns Baldini's Sports Casino in Sparks, said he expects to start with a few dozen slot machines and perhaps expand from there.

"We're going to try to test the market," he said Wednesday. "We're going to grow into it." A group led by Heaney is applying for a gambling license for the Cal Neva.

The north shore casino market, never huge to begin with, has been hammered by California Indian gambling and the rough economy.

Casino revenues on the north shore came to $2.3 million in October, according to the Nevada Gaming Control Board. That was an 8 percent increase from a year earlier -- but one third less than in October 2005.

"The Indian gaming so close to the market has certainly hurt it and the economy has certainly hurt it," Heaney said. "The economy will come back and Lake Tahoe has a lot to offer."

He said having an operating casino would make the property more marketable to potential buyers. Canyon Capital put the Cal Neva up for sale in August 2009.

Ken Adams, a Reno gambling consultant, said a small casino operation with a few slots can probably pencil out, even in a difficult market. "There's not much risk to it," he said.

The Cal Neva's heyday was in the early 1960s, when Sinatra owned it and turned it into a playground for show-business pals like Dean Martin. For $10, the public can tour the network of underground tunnels built during Sinatra's reign.

The singer famously lost his gambling license after an FBI agent spotted his pal Sam Giancana on the premises. Giancana, a notorious Chicago mobster, wasn't allowed in casinos.

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Call The Bee's Dale Kasler, (916) 321-1066.

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