Casinos Coming to Tribal Land Amid Lax Regulation : Gambling: Slot machine-like games proliferate as state and local officials yield to U.S., which has yet to set rules.

Three years after Congress voted for a commission to create clear guidelines for Indian gambling, there still are no regulations--only confusion.

It took most of that time for the Bush Administration merely to appoint the three members of the National Indian Gaming Commission.

“Things go slow in Indian country,” said Tony Hope, the chairman of the panel. He said regulations are being completed “as fast as we can,” but the commission still will not be fully operational until next spring.

The delays have left a crippling void in oversight of the fast-growing industry that has become the centerpiece of tribal economies.

Federal agencies and local law enforcement have backed away from Indian gambling, assuming that the commission would take over. Tribes, in turn, have not known where to turn for guidance.

“There are no controls. The federal government is not looking over anyone’s shoulder,” said Tom Dowell, former superintendent of the Southern California office of the Bureau of Indian Affairs.

Nowhere is the confusion more evident than in the inability of authorities to deal with the most significant recent development in Indian gambling--proliferation of slot machine-type devices.

Although the Indian Gaming Regulatory Act of 1988 opened the door for tribes to use gambling machines in a handful of places, they remain illegal in most states. Amid the regulatory void, however, gambling promoters have installed them on dozens of reservations from coast to coast.

“Because they don’t have a commission, people are doing pretty much what they want,” said Marcus Anderson, who spoke from first-hand experience.

He was the head of a small Northern California Indian community where a bingo promoter brought this state into the machine age of gambling last year. Since then, at least eight California reservations have joined the push toward full-scale casinos.

At those eight reservations, crowds plunk coins--or slide $1 to $20 bills--into hundreds of gambling machines despite a state Constitution that bars “casinos of the type currently operating in Nevada.”

The devices are gone, though, from Anderson’s Robinson Rancheria, where turbulent events forced the hand of authorities.

It took nearly a year--marked by a tribal coup, alleged death threats and repeated challenges to the legality of what the bingo promoter called “video games.” But one morning in February, FBI agents marched into the gambling hall and headed to a back room, under the sign saying “It’s Monte Carlo Nite.”

Expansion of Indian gambling was almost inevitable, given the limits of bingo. It requires a large labor force and guaranteed jackpots--if only a handful of people show up, you still have to pay.

In California alone, half a dozen tribes were left with failed halls--one of them at the Robinson Rancheria.

That hall opened in 1986 after 28 Lake County businessmen put up $50,000 each to back an Oklahoma promoter who suggested that the area was a natural for bingo. Two hours north of San Francisco, its population swelled to 250,000 in summer as tourists came to fish and water ski on sparkling Clear Lake.

A new attraction, said motel owner John Tanti, might “help the tribe, the community--and make a little money.”

By early 1990, however, the luster of bingo had faded amid a turnover of managers, disputes among investors and squabbling among the 200 Pomo Indians.

Enter Frank Rose. Based in Orange County, he was a bear of a man, perhaps 240 pounds, who had run charity bingo for years, then expanded into Indian games--controversy close behind.

In 1984, the Morongo band outside Palm Springs accused him of running an unauthorized bingo hall on the land of one member. In 1989, his effort to revive bingo at the Soboba Reservation in Hemet ended when a manager turned out to be Stanton Garland, a 17-year fugitive from New York’s French Connection heroin case.

But Rose was willing to try his hand where others had failed. And he had a strategy for Robinson:

At a remote place like that, he told the Indians, “you can’t make it on bingo itself.”

“What I really wanted that bingo hall up there for,” he said, “was to substantiate machines in California.”

Producing 60% of the revenue in Las Vegas, slots are the magical money machines of gambling.

“People love slot machines,” said Wayne Mehl, an aide to Nevada Sen. Harry Reid. “That’s why the tribes would like to have them.”

But the Indian Gaming Regulatory Act didn’t make it easy to do.

Signed by President Reagan on Oct. 17, 1988, it promised to remove oversight of tribal gambling from an understaffed Bureau of Indian Affairs, which never wanted the job. There would be a new two-level system of regulation:

* When the National Indian Gaming Commission was in place, it would oversee milder forms of gambling such as bingo. While “technologic aids” could be used in playing these games--a computer that keeps track of 250 bingo cards, for instance--”slot machines of any kind” were specifically excluded from this category.

* All other gambling--more controversial types, basically--would be regulated under “compacts” negotiated by tribes and the states.

A state had to allow Indians to offer any wagering that is legal within its borders: off-track betting in many, and craps and roulette in 14 states, California not among them, where charities can hold wide-ranging “Las Vegas Nights.”

Machines? They were clearly OK in the gambling Meccas of Nevada and New Jersey, and in states such as South Dakota and Colorado, which approved Old West casinos to help ailing tourist towns.

But most states banned the devices, objecting that they sucked money from a populace and had been used by the mob to skim millions in Las Vegas.

Congress, however, hadn’t counted on “the way gambling operators work,” said I. Nelson Rose, a gambling expert at Whittier Law School in Los Angeles.

“They read the law like they want to.”

In modern casinos, “gambling machine” means far more than old-fashioned slots with handles on the side and windows displaying cherries, barrels and the like. In the computer age, a microchip can make the video screen “play” poker, bingo--all sorts of games.

Some gambling promoters said a machine was OK if it paid out paper credits instead of coins. Some said that if 20 machines were linked and players’ money was pooled into one jackpot, it was just like bingo--and OK for use by Indians.

Others seized on a phrase in the new law, arguing that certain machines were merely “technologic aids” to games that are legal on reservations. If that’s all they were, they could be used without state approval.

“Give me a break!” exclaimed one Arizona prosecutor as he walked by a device being sold to tribes at a conference in Las Vegas. “It’s a slot machine!”

Yet it was like any industry testing a regulatory scheme, like filmmakers seeing how much sex they could squeeze in short of an X rating. You offered the most profitable product you could rationalize, then dared regulators to tell you, “No.”

There was one catch here. In the muddled arena of Indian gambling, who could say, “No”?

From the moment the 50 “video poker” and “video keno” machines arrived at the Robinson Rancheria in March, 1990, Marcus Anderson kept expecting the sheriff, the “Feds”--someone--to raid the place.

“They sure looked like slot machines to me,” said the then-tribal chairman.

Authorities knew of them.

In an April 4 letter, the BIA’s Sacramento office reminded Anderson that the rancheria’s approved gambling contract allowed only bingo. The BIA even threatened “appropriate legal action.” All that followed, however, were more letters.

Lake County sheriff’s officials also knew of the machines. In California, unlike many states, local police patrol Indian land and make arrests for assaults, drug violations and the like. But county prosecutors decided that the 1988 federal law had placed one area, gambling, beyond their jurisdiction. “That’s up to the federal government,” Undersheriff Keith Clausen said.

While some attorneys thought the interpretation was mistaken, it was an understandable one, according to Michael Cox, counsel for the National Indian Gaming Commission. Given “a great deal of uncertainty,” Cox said, “nobody wants to get killed over a slot machine.”

Several years ago, two state investigators kept track of Indian games and traced bingo managers with flow charts. But with the promise of a federal commission, they were reassigned to make new charts--on cocaine kingpins.

So months passed and customers flowed uninterrupted to the Robinson Rancheria’s Monte Carlo room.

The Indians soon stopped worrying about a raid, according to Marcus Anderson’s brother, Curtis, the tribe’s liaison to the gambling. While the tribal council got only a small share of the revenue, “like $1,000 a month,” he said, Frank Rose gave jobs to 38 Indians and “we were just happy that the hall was open.”

Meanwhile, the machines were taking in a total of $2,000 a day, according to Daryl Gurr, a Sacramento private investigator who helped set up the room.

The plan was to “operate until somebody stops us,” he said, “be a little Harrah’s.”

No one was more frustrated than Tony Hope.

While tribes and law enforcement waited anxiously for guidance, it took the Bush Administration 16 months to make a first appointment to the gaming commission--and he was it.

A 50-year-old whose status as the son of entertainer Bob Hope sometimes overshadowed his record as a Harvard-educated lawyer and finance expert, he had a good Republican’s prejudice about the cumbersome nature of government. This experience was confirming it. It took the General Accounting Office six months just to get him office space.

More important, he needed two more commissioners. Only one was in place by the end of 1990, Joel Frank, a Seminole leader.

The Administration next sought another Indian, but insisted on one who was a Republican woman.

When a name surfaced--Jana McKeag, a Cherokee working at the Agriculture Department--many tribes lobbied against her because she was endorsed by Nevada’s Sen. Reid. They feared “Nevada interests” were trying to crush competition. More delays.

Meanwhile, Hope cautioned tribes against investing in devices that might “get them busted.”

“I’m just sorry we’re not up and operating,” he said. “I haven’t gotten to roll the dice yet.”

Although McKeag was finally confirmed in April, Hope still couldn’t take any action. The commission needed “regs” first.

Hope said the panel will soon offer key definitions, such as what is a “technologic aid,” to help resolve controversy over the machines. But full regulations--covering matters such as background checks on investors--probably will not be finished until winter. Then there’s a 60-day comment period before they’re official.

On that schedule, it will be spring before his commission can “roll the dice.”

In the interim, machines are popping up all over.

Minnesota tribes have led the way, building casinos featuring as many as 800 slots. There, uniquely, such expansion has the blessing of state authorities, who approved “compacts” allowing the devices.

Elsewhere, from Florida to Washington, gambling promoters have introduced the machines with no such agreements.

Even conservative tribes find it hard to resist one machine, designed to play a video version of “pull-tabs,” a $1 lottery ticket-like game sold at bingo halls. Gambling attorneys say that it has a good chance of being ruled a mere “technologic aid.” So why wait?

Aware that many law enforcement officials view such arguments skeptically--”Just another way of trying to get around the law,” said Riverside County Sheriff Cois Byrd--most tribes carefully soft-pedal their new gambling, anxious not to force the issue.

“We don’t advertise that we have them . . . we’ve elected not to wave the red flag,” said Michael Lombardi, current manager of Morongo’s gambling hall.

But that was hardly the case at the Robinson Rancheria. Here, various factions loudly brought attention to the machines--and challenged their legality.

As 1991 approached, the investors went to federal court to evict Frank Rose from the hall, complaining that his “expressly prohibited” devices jeopardized the business. They said Rose had “stopped providing any accounting” and ejected their “fiscal monitoring agent . . . after throwing a bullet at him, splattering coffee on him and threatening to kill him.”

Within the tribe, Curtis Anderson led a drive to recall his brother as chairman, accusing him of not getting the Indians enough money from the gambling.

Locked out of his office, Marcus Anderson wrote the BIA, reminding it of “the illegal gaming.” He later recalled thinking: “This is getting ridiculous.”

“The gaming commission, because they don’t have people, couldn’t do anything about it. The BIA couldn’t do anything about it because they don’t have any enforcement (power). . . . And the sheriff--they claimed that’s federal land.”

In November, he called the FBI, pleading for action.

It took three months. But on Feb. 14, unmarked Chevys and Pontiacs began pulling up to the gambling hall. Agents in blue FBI windbreakers, assisted by sheriff’s deputies, wheeled machines out a side entrance and into two rented Bekins trucks.

About 11 months had passed since the “video games” arrived.

That evening, the phone rang in the tribal hall. Robinson’s business manager listened as Frank Rose complained about his “$100,000 in machines” being carted away.

“I’ll get my machines back,” he vowed.

He hasn’t, though. The FBI still has them. No charges have been filed, but the case remains under investigation, an agent said.

In a short interview, Rose portrayed himself as the victim at Robinson, “defrauded for a quarter of a million dollars.” He’s suing the investors.

“It’s a goddamned mess,” he said. “You get so many goddamned laws you have to abide by. . . . Then, when you think you’re obeying them, you might not be.”

The raid did not mean Californians had to trek to Nevada to find gambling machines.

Sixty were installed in December at the Barona Reservation outside San Diego, then 54 in April at Morongo and 40 at the Cabazon Reservation in Indio. Over the summer, 48 of the pull-tab devices were added to the Sycuan Gaming Center east of San Diego and 104 at Table Mountain Rancheria outside Fresno. Last month, 20 came to the Rumsey Rancheria in Yolo County, 51 to the San Manuel reservation’s huge bingo hall in San Bernardino and 94 to the new Viejas Casino & Turf Club near San Diego.

All still operate.

“You can’t say these machines are legal. I realize that,” said Lombardi, the Morongo gambling manager. “But law enforcement can’t say they’re illegal. “

“It’s not our fault,” he said, “the Administration has procrastinated.”