Tribes, governor ink gaming deal

Valley Indians opt out of latest compact

SACRAMENTO — With critics grumbling, Gov. Arnold Schwarzenegger Monday signed new gambling agreements with five Indian tribes and called on other tribes to join what he called a “fair deal.”

The governor said the agreement, known as a compact, would bring the state more than $1 billion in return for the opportunity for tribes to add as many slot machines as the market will bear, but for an escalating fee of up to $25,000 per machine.

“This is a fair deal for the tribes and for the state,” the governor said in a well-orchestrated signing ceremony in a city auditorium. “It solidifies a partnership based on their (tribal) exclusive gaming rights. I am hopeful that more tribes will join.”

The compact drew support from law enforcement and other local governments, the Sierra Club, and contractors for requiring the five northern and southern California tribes to address environmental and public safety concerns of casinos as well as providing money that the governor said will go to transportation projects.

“We couldnt have written it better ourselves,” said Nick Warner, lobbyist for the California State Sheriffs Association.

But the new compacts that affect about 10 percent of the states 53 gaming tribes with casinos prompted questions and outright criticism from other tribes, proponents of gambling ballot measures and at least one lawmaker who must approve the compacts.

Gene Raper, a consultant for the Agua Caliente Band of Cahuilla Indians of Palm Springs, said the tribe — along with a few others including the Morongo Band of Mission Indians — have unsuccessfully tried to negotiate an alternative compact that doesnt force the surrender of sovereign immunity to settle disputes, which the new compacts do.

“We have been sort of at a stalemate,” Raper said. “In great probability it could all be worked out to the satisfaction of all sides, but the governors current agreement is a little too tight on enforcement on what Indians can do on their own land.”

Tribes signing compacts Monday were the Pala Band of Mission Indians, Pauma Band of Luiseno Mission Indians of the Pauma and Yima Reservation and the Viejas Band of Kumeyaay Indians, all of San Diego County, the Rumsey Band of Wintun Indians of Yolo County and the United Auburn Indian community of Placer County.

The new compacts, which run until 2030, actually consist of amendments to the existing compacts.

Key features call for:

Tribes cumulatively will pay the state about $1 billion a year for 18 years to secure a bond, with the money going to transportation. Subsequently, tribes will pay at least an additional $700 million until the compact runs out, representing 10 to 18 percent of net profits.

Tribes also will pay the state a fee for each additional slot machine above the current maximum of 2,000. The fee escalates from $12,000 per machine to $25,000.

Tribes will pay $2 million annually into the Revenue Sharing Trust Fund, designed to pay nongaming and small gambling tribes $1 million a year. The fund has run short since it was created.

Tribes could only add new machines to existing gambling operations on their existing reservations.

The compact gives tribes exclusive rights to offer slot machines and banked card games gambling in their existing territory — one non-Indian slot machine would violate the compact, a negotiator said.

Tribes without existing labor agreements agree to remain neutral in union organizing efforts that would be decided by a card-check system instead of secret ballots.

Tribes also agreed to allow state inspection of their machines; to adopt building codes equal to state versions; to negotiate deals with nearby communities to offset impact of casinos and to boost liability insurance for injured patrons, both with enforcement by binding arbitration.

Schwarzenegger again vowed to fight two gambling initiatives on the November ballot, including one by the Agua Caliente tribe to lift the cap on slot machines in return for tribes contributing to the state the equivalent of the state corporate income tax.

The other initiative sponsored by 16 racetracks and card clubs would allow them to operate 30,000 slot machines if any of the gambling tribes refused to agree to pay the state 25 percent of their winnings.

Greg Larsen, a spokesman for the racetrack initiative, said Monday that proponents plan to go ahead with their initiative because the new compacts fall short of the 25 percent the governor promised to get from tribes.

“The governor is clearly very popular and charismatic,” Larsen said, “but the reality is the numbers and differences in what a fair share truly is are so great between these compacts and our initiative that we have no doubt voters will see and appreciate the differences.”

Raper said the Agua Caliente initiative is still an option for his client and some other big tribes if they cant negotiate a new compact with the governor.

But he said the Agua Caliente tribe also has looked at the option of installing high tech bingo machines, which operate similarly to slot machines but arent regulated like them.

“If the price gets too high” for a new compact with the governor, Raper said, “then maybe Class 2 (bingo machines) become a better business deal.”

The complex chess game of tribal gambling also apparently has produced some talk of backers of the racetrack initiative and non-gambling tribes joining forces for a future ballot measure that would allow these tribes only to operate their slot machines at the tracks and card clubs.

This evolving discussion, which no one will outline in detail, attempts to marry the track and clubs urban locations with the federally backed gambling authority of rural tribes that cant attract players to their remote areas. The new compacts are evoking a range of reactions from smaller tribes.

The Rincon Band of Mission Indians in San Diego County, fearing that their existing casino will be hurt by expansion of other county casinos, have filed suit to block the compacts.

“Its going to radically alter the landscape regarding gambling in California,” Scott Crowell, attorney for the Rincon Band. “We think that’s bad policy, we think that is illegal and that is why we filed the lawsuit.”

 

The governor’s top negotiator, Daniel Kolkey, Monday said the lawsuit “lacks merit” but it speaks to a broader issue.

Michael Lombardi, a representative of the Augustine tribe that operates a casino in Coachella, said the new compacts could have an impact on smaller tribes if they are signed by more tribes, but doubted it would affect his tribe.

“These agreements will have no impact on us,” Lombardi said. “We have 17 years to run on our compact and we expect the state to fulfill their obligations.”

But Gene Madrigal, attorney for the Torres-Martinez tribe, said it’s not clear what effect the new situation in the Capitol will have on his client.

The tribe now has a compact to open a small casino of up to 350 slot machines, paying the state 5 percent of its winnings after three years, but it still must negotiate payments for the remaining slot machines up to 2,000 at a different future site.

“I think there is still a lot of confusion as to what the exact terms of the deal are,” Madrigal said. “I also think the Torres-Martinez tribe is in a different situation in a start-up operation in a small market.”

Sen. Jim Battin, R-La Quinta, said he is still studying the compact, but doesn’t like the labor provision or the decision to end payments to the Special Distribution Fund that sends some tribal money to communities near casinos.

“That effectively is a transfer of money to the state from local government,” Battin said. “I have some real concerns regarding the compacts.”

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