Indian Slot Machines Illegal, Judge Rules

In a long-anticipated decision, a federal judge in Sacramento ruled Wednesday that the state lottery law does not allow slot machines at Indian casinos, clouding the legality of Proposition 5, the hotly contested November ballot measure aimed at permitting the use of the devices on California reservations.

Attorneys for many of the California tribes that now feature slot machines in their casinos have argued that the language of the California Lottery Act, approved as a constitutional amendment by voters in 1984, did not specifically outlaw the use of the slot machines--and that the devices now commonplace on about 40 Indian reservations are functionally equivalent to the state’s own lottery terminals.

Given that argument, Proposition 5 would allow the proliferation of Indian casinos in California--and continued use of the kinds of slot machines that Gov. Pete Wilson has long argued are illegal in the state.

But U.S. Eastern District Judge Garland Burrell ruled that the lottery act offered no loophole for the use of slot machines on Indian casinos.

Wilson immediately hailed the ruling, saying, “Today’s common sense decision . . . strikes a hearty blow against those tribes engaged in a cynical breach of the law and in favor of the rule of law.”

Garland’s ruling answers litigation that began over the issue in February 1992, although attorneys representing many Indian tribes with casinos said they may ask him to reconsider.

One of the attorneys, George Forman, said he was “of course disappointed any time a court makes an erroneous decision, and we believe this one is.”

He said the use of slot machines has already been blessed by state legislators, who have voted to allow tribes that have agreed to casino guidelines written by the governor to continue using their current slot machines until new ones--based on the state’s lottery system--are developed.

Passage of Proposition 5, Forman said, would allow for the continued use of the slot machines now in many Indian casinos.

But others disagree.

Wilson’s legal affairs secretary, Dan Kolkey, said, “This eliminates the last fleeting argument that the Indians have that they are entitled to engage in casino operations on their land. It demonstrates that Proposition 5 is simply an ill-conceived effort to cover their illegal tracks.

“They ought to cease their illegal activities and enter into compacts that authorize them to engage in legal forms of gaming.”

Howard Dickstein, an attorney for several tribes that have signed agreements with Wilson to use as yet untested lottery-based machines, said Burrell’s ruling Wednesday appears to undermine Proposition 5’s legality.

Burrell did not specifically address the legality of Proposition 5, but wrote in his 16-page decision that the lottery act offers no exemption to the state Constitution, which bans slot machines.

The U.S. 9th Circuit Court of Appeals previously ruled that slot machines are generally banned by California law, but told Burrell to decide whether the state lottery law provides an exemption from that prohibition.

It does not, Burrell concluded.

And because there is no exemption that would allow the use of slot machines, the governor is under no obligation to negotiate with Indian tribes over their use, Burrell said.

The judge said he considered the voters’ intent when they approved the lottery in 1984.

It would be inappropriate, he added, to infer that voters were authorizing other forms of gaming activities when they specifically adopted a lottery.

Dickstein said Burrell’s decision “puts in serious doubt the constitutionality of Proposition 5.”

“If slot machines are a hallmark of a casino, then Proposition 5 is unconstitutional because the constitution bans Nevada-style casinos,” Dickstein said.

Forman answered: “There is no definition [in state law] of a casino.” Further, he said, Proposition 5 distinguishes between the kinds of machines allowed in Nevada, and what would be legal in California.

“There’s a chance that this decision will not be final by Nov. 3, and that Proposition 5 will end all this litigation,” Forman said.

Other attorneys have long argued, however, that the passage of Proposition 5 will simply feed still more litigation.