Tribes Given Deadline on Slot Machines

Indian tribes operating casinos in California have received federal orders to shut down their thousands of slot machines--the principal moneymaker in an economic success story the tribes credit with lifting whole reservations from centuries of dusty poverty.

Beneficial as the machines may be to the tribes’ welfare, federal officials say the period of legal limbo in which the slot action has been racking up millions of dollars for the tribes will end May 1.

By the end of this month, federal prosecutors have warned, the tribes must have a plan to stop the illegal gaming now conducted on the 12,000 electronic machines stacked row on row through 34 tribal casinos throughout California. If not, the tribes face prosecution or civil action later this spring.

To avoid running afoul of federal law while still keeping electronic games, the tribes would have to introduce new machines offering what they fear could be substantially smaller payoffs--lessening the allure to gamblers.

The loss of slot play would have severe consequences, Indian leaders say. With casino profits, tribes have built and upgraded facilities and provided health insurance and student scholarships far in excess of any previous reservation ventures.

To protect the casinos, the tribes have begun an intense media campaign to gain public sympathy for their position. But Gov. Pete Wilson remains adamantly opposed to slot machine gambling now conducted on the reservations.

“There are countless thousands of lives that are destroyed by the addiction of gambling each year,” including people who “lose their home and the ability to support their children,” said Wilson’s spokesman, Sean Walsh.

While “there may be some benefits to Indian tribes” from gambling, the governor is intent on keeping gambling in check in the state, Walsh said.

Federal law allows Indian tribes to sponsor any types of games on their reservations that would be legal in the surrounding state, but allows the Indians greater leeway if they negotiate a compact with the governor. Nationwide, tribes in 28 states operate casinos, most under so-called “compact” agreements with state governors.

The California tribes initially argued that their slot machines were legal because the games were similar to the state’s lottery. But they lost the basis for that argument last year when the California Supreme Court ruled that the lottery, too, was violating state law with its keno game.

The court determined that gambling by playing against the house, such as is conducted in Nevada casinos, is forbidden in California. Gamblers can only play for one another’s money--potentially meaning smaller slot payoffs.

Indian-sponsored bingo and poker games meet that legal test, but the slot machines do not.

In addition to loss of revenue, Indian gaming advocates fear loss of casino jobs as well.

The Indians maintain that casinos employ more than 15,000 people statewide, of which only about 10% are Native Americans. “The other 90% are non-Indians--people relying on these jobs to feed their families,” said Dan Tucker, chairman of the California-Nevada Indian Gaming Assn. “Economically, this could be disastrous for them.”

Nevertheless, in letters sent to all gaming tribes, all four of California’s U.S. attorneys for the first time have set a deadline threatening to shut down the lucrative slots.

“We hope to resolve the matter through negotiations and not have to arrive at gaming facilities with SWAT teams and start arresting people,” said U.S. Atty. Charles J. Stevens of Sacramento, whose district includes 10 tribes that sponsor games. Lawyers for both sides have been maintaining close contact and no such extreme measures will probably be necessary, Stevens said.

Some tribal leaders, conceding they may be forced to make changes in electronic gaming, say they hope to keep options open beyond the deadline date. Others say compliance with the federal demand may not go smoothly.

“We find it dumbfounding,” said Richard Milanovich, chairman of the Agua Caliente tribe, owner of a casino with 1,100 gaming machines in Palm Springs.

Will his tribe give in? “I can’t say. There is some feeling that it’s about time we dig in our heels and stand up for our rights, and not cave in like we have in the past. . . . We’re in a quandary,” he said.

The action has especially frustrated tribal leaders because the ultimatum comes as Wilson is finally negotiating with a San Diego County tribe to allow a casino with a watered-down version of slot machines.

Wilson, maintaining that Indian casino slot machines had been illegal all along, had refused to negotiate with the Indians as the machines appeared by the hundreds at most reservation casinos.

Then, in October, Wilson agreed to begin talks with the Pala Band of Mission Indians, noting that they were a non-gaming tribe and that talks would be confined to a scaled-down version of slot machine betting. Lawyers on both sides say the talks are proceeding in good faith.

Previous efforts to close casinos have not thwarted Indian gaming.

When the state’s first Indian casino with slots opened in 1990--at the Robinson Rancheria in Northern California--FBI agents raided the facility, but it reopened later in an atmosphere of legal uncertainty. In the ensuing months, more Indian reservations throughout the state opened casinos with slots, virtually without challenge.

In 1991, state Atty. Gen. Dan Lungren directed a statewide crackdown on Indian slots. But, in a San Diego case where sheriff’s deputies raided three casinos, a federal judge ruled that the state acted without jurisdiction.

Now, said U.S. Atty. Stevens, the courts have finally made it clear the slot machines are illegal, prompting California’s U.S. attorneys to set the May 1 deadline for the tribes to halt gambling on electronic devices.

Only slot play negotiated with the governor will thereafter be allowed, the federal prosecutors said.

In negotiations with the Pala Indians, Wilson has insisted on a form of gambling that--as now approved by the courts--is akin to the state’s own lottery games played with a players’ pool of money. Altered slot machines could be allowed.

If approved by both sides, the compact is expected to become a model for other Indian tribes to operate casinos--but only under Wilson’s so-far unbending conditions.

“We are negotiating with a tribe that is not engaged in illegal gaming and I will not negotiate with any who are,” Wilson said earlier this month.

Tucker, of the California-Nevada Indian Gaming Assn., said it is likely that the days are numbered for the tribes’ current generation of electronic gaming devices--the term the tribes prefer in describing their machines.

“The ones that we use now, we’ll probably lose. Everyone seems to understand that they won’t meet the new criteria,” Tucker said.

“We’re all concerned about the [U.S. attorneys’ notices],” he said, “but as long as the compact negotiations are still moving forward, we’re pretty optimistic that the U.S. attorneys will work with us.”

Tribal leaders have not decided if they will shut off their slots if there is no settlement by May 1, Tucker said. “Hopefully Pala will get a compact, and then we can all sit down and talk.”

In hopes of influencing the outcome of the talks, the tribes are airing at least two television ads across the state with pro-gaming messages, one featuring actor Steven Seagal making a plea for support.

The government crackdown, Seagal says on screen, is “not fair. . . . Join Californians concerned about fairness.”

The Morongo Band of Mission Indians, with a casino near Banning on Interstate 10, has begun a newspaper ad campaign signed by employees who state: “If we don’t protect tribal gaming, 15,000 signatures like these will go on unemployment forms.”

The stoutest defenders of the tribes describe the latest threat to Indian gaming as another sellout typical of the treatment Native Americans have received throughout U.S. history.

Raising objections to gaming based on house- or player-banked games is “just a smoke screen” being used to shut down the tribes’ main source of income, said state Sen. Richard G. Polanco, (D-Los Angeles) chairman of the legislative Latino Caucus. Like Latinos, Native Americans need better health care, more employment and economic development, he said. “But what we are seeing is a systematic effort to destroy them.”

Continued pressure on the tribes could result in a ballot initiative calling on voters to allow Indian gaming in all its present forms, Polanco said--”and I predict it would win.”

Vanzi reported from Sacramento and Gorman from Riverside.