Davis and Key Gaming Tribe Reach Deal

In a move expected to avert another initiative war over gambling on Indian land, Gov. Gray Davis reached a pact Tuesday with one of California’s most ambitious gambling tribes on the future of its casino operations.

The Agua Caliente band of Cahuilla Indians became the last major gambling tribe to sign a 20-year compact with the Davis administration. The tribe agreed to scrap plans for a ballot initiative next year that would have imposed virtually no limits on gambling on tribal land.

Davis and the Indians are backing a measure approved for the March ballot by the Legislature, which, if sanctioned by voters, would give Native Americans monopoly rights to operate Nevada-style casinos in California.

Other tribes agreed to a similar deal Friday that grants them exclusive rights to operate slot machines and Nevada-type card games in California, and assures them limited rights to expand their casinos.

In a news conference Tuesday, Davis said the deal reached with the Agua Caliente band is “substantially similar” to the compact he signed with 57 other tribes.

“Indians haven’t asked for much--only that they be treated with respect and dignity,” Davis said.

By signing the compact and dropping its initiative plans, the tribe is acknowledging that the compact is a good deal for the tribes. The Agua Caliente was able to get much of what it wanted and avert a costly initiative war that it might have lost. Voters last year approved Proposition 5 to legalize Indian gambling, but the state Supreme Court struck down the measure last month.

Agua Caliente Chairman Richard Milanovich, conceding that he had been a “thorn in the side” of negotiators, said he and his tribal members did not sign the deal Friday because they needed additional time to understand its implications.

“We have been bitten in the past,” Milanovich said. “We don’t care to be bitten again.”

With their downtown Palm Springs property, the Agua Caliente may be better situated than any other tribe in California to capture a tourist trade. They have plans to build a 105,000-square-foot casino next to the current operation.

The tribe now has 1,150 slot machines, a major source of revenue for any casino. Milanovich said the deal will permit his casino to expand to 2,000 machines--the cap written into the compact--within three or four years. Many casinos on Las Vegas’ Strip have 2,000 slot machines.

The deal offered by Davis would permit tribes to own a total of about 45,000 slot machines, up from the current estimate of 23,500, and triple the estimated number from a year ago.

About 60 of California’s 107 tribes now have agreed to the compact.

The side deal struck Tuesday makes only minor changes to the compact agreed to by other tribes. Other tribes can take advantage of the modifications.

Among the changes, Agua Caliente was able to spell out more clearly a clause that applies to all tribes giving them control over who is a tribal member and can work in the casinos even, in certain circumstances, if they have criminal records. The tribe also won the right to renegotiate aspects of the overall compact if a court should declare the proposed constitutional amendment invalid.

The Agua Caliente tribe and its members control half the land in Palm Springs in checkerboard fashion. Initially, the tribe’s primary asset was the Spa Hotel, built around the tribe’s historic hot springs.

The tribe didn’t have the money to build its own hotel, but rather leased the reservation land to a developer who built and opened it in 1962.

In 1993, after the hotel fell into some disrepair, the tribe secured financing and bought it. For years, the cautious tribal council hesitated over going into the casino business.

Finally, in 1995--years after the neighboring Cabazon, Twentynine Palms and Morongo tribes opened casinos and made windfall profits--the Agua Caliente Indians opened their own casino.

Today, Palm Springs businesses and the local Chamber of Commerce credit the Spa Casino for sparking the economic recovery of what had been a struggling downtown commercial district.

But there have been some complaints as well. Because the casino is on Indian trust land, it does not have to abide by local planning and zoning laws. The Spa’s flashy, Las Vegas-esque neon casino sign--which would not otherwise be allowed in the city--is considered by some to be far too tacky for the downtown’s mellow image.

*

Morain reported from Sacramento, Gorman from Riverside.