Dealt Setback, Indian Casinos Look for Help

California’s Indian gaming tribes looked to Sacramento on Tuesday for support in resolving a years-long battle: how to operate casinos with lucrative gaming machines that the state Supreme Court has now ruled are banned by the state Constitution.

Even as Justice Department officials in Washington contemplated whether, and when, to shut down the machines that the court ruled Monday are illegal slots, state legislators moved quickly to reserve a spot on the March ballot for a possible constitutional amendment to legalize slot machines on Indian reservations across the state.

Before the ruling struck down Proposition 5--last year’s popular Indian gaming initiative--tribes had already launched a signature-gathering campaign to place an amendment on the ballot next March to exempt their casinos from the state’s slot machine ban.

Hours after the court’s ruling was announced, state Senate President Pro Tem John Burton (D-San Francisco) moved to reserve a place on the ballot for a proposed constitutional amendment, which he said could be put before the voters as a possible alternative to the Indian tribes’ pending initiative.

At this point, the measure is merely a place-holder for the March ballot and contains no substantive provisions. Those will be inserted later, if a compromise can be reached, Burton said.

He indicated that he has no specifics in mind, insisting that “I’m open to anything.”

Such a measure faces significant hurdles, chief among them whether a compromise can be struck that would satisfy Gov. Gray Davis, the Legislature and Indian gambling operators. Other players to be reckoned with include Nevada casinos and other interests that oppose any expansion of gambling in California, as well as operators of California racetracks and card clubs who would like permission, along with the tribes, to operate slot machines.

In the meantime, the tribes are hoping to earn enough signatures by Labor Day to qualify their own March ballot measure.

The clock, meanwhile, is ticking on eight Inland Empire tribes and another near Santa Barbara that previously were ordered by a federal judge to shut down their slot machines within 45 days of a state Supreme Court decision voiding Proposition 5.

That occurred Monday, when the state’s high court ruled 6-1 that the video gambling devices were, in fact, slot machines--placing Indian casinos on the same level as Nevada-style casinos, which are banned in California under the same 1984 state constitutional referendum that authorized California’s lottery.

Under Proposition 5, approved by 63% of state voters, Indians sought approval to conduct the kind of casino gambling they have offered in California for years without state or federal approval.

But because the measure did not seek to amend the constitutional ban on slot machines, it carried insufficient legal weight, the Supreme Court decided.

At issue for years was whether the video devices are slot machines. Because jackpots were paid from the casino’s bank versus the players’ pool of wagers, the Supreme Court ruled that they were indeed slots.

With Proposition 5 invalidated, tribes and state officials must now identify the types of machines that are to be considered legal machines in California.

“We can’t use [these] machines,” Anthony Pico, chairman of the Viejas Indians east of San Diego, said Tuesday. “Now that that question has been answered,” the discussion about what kind of machine to use “is the most important issue on the table.”

There are possible solutions--ones that most tribes have resisted, at least until now.

Last year, a Nevada company created video gaming devices that look and sound similar to a slot machine but that are designed to operate as legal, high-speed lottery games.

About 100 of the devices are now in use at four tribal casinos in the state, “and they are performing admirably,” said attorney Howard Dickstein, who represents tribes that use them. “They are as popular, or more popular, than the other devices.”

The high-speed lottery machines were authorized last year for 11 tribes that signed agreements with then-Gov. Pete Wilson to operate casinos. Most tribes, however, said they feared the machines would not be as popular among gamblers as the kinds of slots in use elsewhere.

Another option is for the tribes to change the hardware and software of their existing slot machines.

The gaming tribes’ ultimate hope is that, either through their own proposed ballot measure or through a legislative one, voters in March can again endorse Indian gaming--this time by changing the state Constitution to specifically exempt tribes from the slot-machine ban.

In the meantime, the devices are operating illegally in California and the immediate question is, how long will that be tolerated?

That call is up to the four U.S. attorneys in California. Two have already spoken.

In the district that includes Los Angeles and the Inland Empire, prosecutors went to court last year and won a ruling that the tribes’ machines were illegal. A federal judge authorized federal agents to shut them down. His ruling was stayed with the understanding that if the state Supreme Court also found them illegal, the nine tribes would have 45 days to shut them off.

A spokesman for U.S. Atty. Alejandro Mayorkas in Los Angeles said Tuesday he assumed that the tribes would live by their previous agreement and turn off the offending devices by the deadline. He said he would not speculate what his office would do if the tribes failed to abide by the standing court order.

Richard Milanovich, chairman of the Agua Caliente Indians in Palm Springs, said he still hopes for a compromise. “I’m an optimist,” he said.

The three tribes with casinos in San Diego County are breathing easier. Although they opposed the casino agreements forged by Wilson last year, they nonetheless signed them so their casino machines would not be seized, as a federal judge there had threatened to do.

Because of those tribes’ efforts to comply with state law, they do not face shutdown orders, said a spokesman for U.S. Atty. Gregory A. Vega. They are permitted to continue using the illegal slot machines because the lottery-based devices are not yet widely available.

The U.S. attorneys in Sacramento and San Francisco referred inquiries to a Justice Department spokeswoman in Washington, who said attorneys were still analyzing the California Supreme Court ruling and had not yet decided what to do about it.

She acknowledged that, given Monday’s court ruling, the Justice Department could move to close down the illegal slot machines because they are operating without state or federal permission.

But U.S. Atty. Gen. Janet Reno has advised her attorneys in the past to move cautiously in taking enforcement actions against Indian tribes.

And one Justice Department official noted Tuesday that, if it seems likely that a constitutional amendment will qualify for the March ballot, federal agents will probably stand back until the issue is resolved in the political arena.

The Legislature is scheduled to adjourn Sept. 10 but return on Jan. 3--enough time to still craft a ballot measure. Such a measure would require a two-thirds favorable vote--27 in the 40-member Senate and 54 in the 80-member Assembly. On controversial issues such as gambling, a two-thirds majority is difficult to reach.

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Times staff writer Eric Lichtblau in Washington contributed to this article.