Davis Holds Summit on Indian Casino Issue

Gov. Gray Davis, legislative leaders and tribal officials met Wednesday on the future of Indian gambling, trying to reach an agreement to allow tribes to keep operating casinos despite an adverse court ruling.

Davis summoned two dozen tribal leaders to Sacramento and told them he favors “a modest expansion” of gambling in response to Monday’s state Supreme Court decision that held the controversial Proposition 5 unconstitutional. Voters overwhelmingly approved that initiative last November.

“I want to get you back in business and allow for reasonable expansion,” the governor told the tribes’ representatives as they sought a legislative solution before lawmakers adjourn Sept. 10.

Assembly Speaker Antonio Villaraigosa (D-Los Angeles) described the afternoon meeting as “extremely productive.” He said, “I’m very optimistic that there’s good faith on all sides to come up with a constitutional amendment that meets judicial requirements.”

The two-hour session did not produce immediate agreement on a measure for lawmakers to put on next year’s ballot, but the participants said they intend to hold more face-to-face negotiations in coming days.

Leaving the meeting, Mark Macarro, chairman of the Pechanga Indian Reservation and the chief spokesman for Proposition 5 backers, said he is confident an agreement among the tribes, Davis and the Legislature can be reached, provided all three are “on the same page.”

“I think the ingredients are all there,” Macarro told reporters.

The aim of the negotiations is to allow the Indians to continue to operate their casinos, possibly adding extra gambling machines, and permit non-gambling tribes to enter the multibillion-dollar industry.

If a deal can be struck, lawmakers would place a proposed constitutional amendment on the ballot next March, presumably allowing Indians to drop plans for their own initiative and avoiding a replay of last year’s initiative fight that cost almost $100 million. It was the most expensive initiative campaign in U.S. history.

While receptive to the governor’s overture, Indian representatives said they are not ready to abandon their initiative.

State Senate Leader John Burton (D-San Francisco) concurred that there are potential stumbling blocks to a compromise. “Every tribe would like to have maybe twice the machines” they currently operate, Burton said.

Still, he said “there’s a shot” at a deal. “It’s basically up to the tribes. We’re trying to see if there’s a way legislatively to stop a lot of contention. If there is, great. If there isn’t, nothing ventured, nothing gained.”

Burton said the biggest burden is on the 60 or so tribes that would need to sign off on a compromise. “The real decision is among the tribal leaders and their members as to what road they want to take,” said Burton.

Burton is the author of the proposed constitutional amendment that would contain the compromise, if one emerges. He said a legislative solution would be preferable to and cheaper than another high-spending campaign.

Davis, Burton and Villaraigosa all have accepted campaign contributions from a variety of gambling interests. In what was widely trumpeted as a big victory for Las Vegas casinos, the state’s high court Monday ruled 6-1 that the video gambling devices played at many Indian casinos are actually slot machines, which are banned by the state Constitution because they are “Nevada-style” games banked by the casino rather than by the players.

In advance of that ruling, a federal judge had already told certain major Indian casinos to unplug their video machines within 45 days of any state Supreme Court rejection of Proposition 5.

Throughout California, federal prosecutors have served notice that they intend to shut down Indian casinos that are in conflict with federal gambling rules, but have held off from doing so while the issue was in court.

At the meeting on Wednesday, Davis suggested that he wants the issue resolved at the state level without intervention from the federal Department of Justice.

“We are working with U.S. Atty. Gen. Janet Reno,” aides said Davis told the meeting. “We are trying to solve this issue in Sacramento and would appreciate her cooperation in allowing us to do that.”

In a related issue, legislators and their legal advisors were trying to sort out whether the Supreme Court’s decision would also apply to the 152 licensed card clubs in the state and if they would be protected in any final agreement with the Indians.

State Sen. Don Perata (D-Alameda), chairman of the Senate Governmental Organization Committee, which acts on gambling bills, said legal experts have told him that the court’s Proposition 5 decision appears to affect card club gambling, a California fixture that dates to the Gold Rush.

If further legal review confirms this view, Perata said, some California cities that rely heavily on revenue from card rooms would be “wiped out.” This likely would require state taxpayers to bail them out with millions of dollars, he said.

Perata said his interpretation of the Supreme Court ruling was that certain table games, such as the wildly popular pai gow, qualified as casino-style banked games.

He said a close reading of the opinion showed the justices went beyond ruling on only the Indian gambling issue and reached into card club gaming as well. “It is a real unintended, unexpected result,” Perata said.

A spokesman for Atty. Gen. Bill Lockyer said lawyers were still reviewing the court ruling and could not yet comment.

Whittier Law School professor I. Nelson Rose, an expert on the law and gambling, disagreed with Perata’s conclusion. Rose said he believes card clubs will not be affected because the dealer, or bank, rotates in the clubs’ pai gow games.

In Bell Gardens, George Hardie, founder of the Bicycle Club, said he could not yet assess the ruling’s impact on card clubs. But he added: “If they can’t have a rotating bank, it would devastate the card clubs.”

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Times staff writer Maura Dolan contributed to this report.