Federal-court ruling may impact California gaming deals

A federal appellate court may have jeopardized the future of five gaming deals that were cut between Governor Arnold Schwarzenegger and some of California’s most successful casino-owning Indian tribes at the hectic end of last year’s legislative session.

The court ruling, which could have a profound impact in California, states the National Indian Gaming Commission does not have jurisdiction to regulate casinos that operate slot machines–including the more than 50 such casinos in California. Some tribes already have said they won’t allow commission enforcers on their land.

At the eleventh hour last August, Schwarzenegger reached new deals with five Indian tribes, four of whom already operate casinos. Together, the new compacts constitute the largest single expansion of gaming in California since voters first opted to allow gaming on tribal lands.

But those compacts failed to gain approval from the Legislature. They will be reintroduced this year, unless the deals are renegotiated by the governor. The tribes with the pending compacts include the Agua Caliente, Morongo, Sycuan, San Manuel and Yurok tribes. Together, the deals would permit more than 17,000 new slots. The tribes say they have no intention of renegotiating their deals, and have called on the Legislature to approve the compacts.

But the governor’s office said they will take the ruling into account and decide whether to reopen negotiations. “We are in the process of evaluating the court’s decision,” said Schwarzenegger spokesman Darrel Ng. “Prior to the completion of that process, it would be premature to speculate on what action” the administration may or may not take.

Meanwhile, the two chairmen of the Governmental Organization Committees in both houses say they are planning to hold legislative hearings on each of the five compacts. And while neither Sen. Dean Florez, D-Shafter, or Assemblyman Alberto Torrico, D-Newark, would say explicitly that the court decision would affect those hearings, the issue of regulation is expected to be a component of the legislative hearings.

Gaming critics are calling on the governor to renegotiate the compacts, and explicitly make provisions for stepped-up enforcement. But in a letter to the Sacramento Bee this week, Anthony Miranda, chairman of the California Nations Indian Gaming Association, said that between the tribes, state and federal government, there is plenty of regulation in Indian casinos.

“The [National Indian Gaming Commission] was never intended to be a regulator of Class III gaming. In California, the tribes and state have agreed that the tribes are the primary regulators of Class III gaming. Also, the NIGC is not the only federal agency that oversees tribal gaming. For the record, tribal gaming is also overseen by several other federal entities, such as the Department of Justice, the IRS, the FBI, the U.S. attorneys and the Treasury Department,” Miranda wrote.

But Cheryl Schmit, executive director of Stand Up For California and a leading critic of gaming expansion, says the new compacts are woefully lacking in oversight–especially in the wake of the court’s decision. As of now, she says, the bulk of the responsibility for regulating tribal casinos falls to the tribes themselves.

“There needs to be oversight other than tribal oversight,” she said. “We need to renegotiate these agreements because the failure of those compacts are both financial and social-justice issues. These five compacts do nothing to support those issues.”

That sentiment was echoed by Sen. John McCain, the leading Republican senator on Indian affairs. In a speech last month, McCain criticized the court ruling saying, “I do not believe that self-regulation without oversight is real regulation.”

Three California tribes already have said they will not allow regulators from the federal commission into their casinos. But other tribes who have signed relatively new deals with Governor Schwarzenegger said they voluntarily will continue to allow federal regulators in.

“We just think that it’s good business for our patrons to feel comfortable that they’re playing games that are fair and honest,” said Alison Harvey, spokeswoman for the California Tribal Business Alliance, which represents some of the state’s most prominent gaming tribes, including the Pala Band of Mission Indians, the Paskenta Band of Nomlaki Indians, the Pauma Band of Luise

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