California Must Offer More Slot Licenses to
Tribal Casinos
Saturday, Oct. 3, 2009,
The Sacramento Bee, Page 3A by Peter
Hecht
In a legal victory for Indian
tribes that refused to pay financial concessions for new gambling
deals, California must offer licenses Monday for 10,549 additional
slot machines for tribal casinos.
Amid the economic downturn,
casino tribes are expected to vie for only a fraction of the
licenses in a drawing by the California Gambling Control
Commission.
Still, the sudden
availability of new licenses is seen as a triumph for tribes
including the Colusa Indian Community near Sacramento, the San
Pasqual tribe near San Diego County and the Rincon Band of Luiseņo
Indians near San Bernardino.
They had complained they were
unfairly pressured to negotiate new revenue-sharing payments with
Gov. Arnold Schwarzenegger to get slots they insisted they were
entitled to under 1999 gambling compacts.
Sixty-one tribes signed the
1999 deals with Gov. Gray Davis that allowed them up to 2,000 slot
machines each. At the same time, the state imposed an overall cap
of 32,151 slot machines statewide, on the calculation that few
tribes had the market capacity for major casinos.
But the tribal gambling
industry exploded, quickly reaching that limit. Schwarzenegger saw
an opening to negotiate new deals - allowing individual tribes to
bypass the state slot cap in exchange for hefty payments into
California's revenue fund.
Schwarzenegger negotiated
tens of millions of dollars in payments in new gambling compacts
from wealthy tribes that wanted to exceed the 2,000-slot limit to
build large casinos that could compete with lavish Las Vegas
resorts. Those deals benefited tribes such as the United Auburn
Indian Community, which runs the lucrative Thunder Valley Casino
in Placer County.
Using the statewide cap as
leverage, the governor also attempted to get additional
revenue-sharing payments from smaller, often rural tribes that
wanted to add slots but not exceed the 2,000 per-tribe limit.
Colusa, San Pasqual and other
tribes refused to negotiate new deals and filed legal claims
against the state.
In August, U.S. District
Judge Frank C. Damrell ruled that dozens of tribes operating under
1999 gambling deals can add slot machines without new state
compacts.
Ruling on behalf of the
Colusa Indian Community, Damrell said the California slot limit
should have been set at 42,700 machines. He said the 32,151 figure
didn't fairly reflect the number of slots that could have been
anticipated under the 1999 deals.
Damrell denied the state's
request to postpone the draw for new licenses while it appeals the
case. On Thursday, the 9th U.S. Circuit Court of Appeals also
refused a stay.
So, the draw will go on
Monday, but the Schwarzenegger administration warns that tribes
may have to remove any new slots they're awarded if the state's
appeal is successful.
"We are still moving
forward with our appeal and expect to win," said
Schwarzenegger spokesman Jeff Macedo.
San Pasqual attorney Stephen
Warren Solomon said the tribe is happy with the slot machine draw.
"The state can say whatever they want. At this point, we have
prevailed," he said.
Solomon said the Gambling
Control Commission has assured the tribe that it will get licenses
for 428 slots to reach its 2,000-slot limit. The licenses cost
about $4,000 each.
The Colusa tribe, which runs
the 846- slot Colusa Casino resort, is seeking 300 new licenses.
The Rincon Band in San Bernardino County wants to add 400 slots.
Nevertheless, said George
Forman, a lawyer who represents the Colusa tribe, it is unlikely
California will see rapid casino growth, given the stalled economy
and the fact that many tribes don't reside in lucrative markets.
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