U.S. Approves California Tribes’ Expanded Gaming

A decade after Indian tribes began operating video gambling machines in California without state or U.S. government permission, reservation gambling with Nevada-style slot machines finally won formal federal approval Friday.

The classic one-armed bandits may be arriving in California within weeks, according to tribal officials.

And with the floodgates open, California is expected to be host within a year to dozens of new or lavishly upgraded casinos on reservation lands, from the outskirts of San Diego to downtown Palm Springs to the redwood country of Northern California. Under the terms of the recently approved Proposition 1A, Nevada-style gambling is available only on Indian reservations, remaining off limits in the state’s card rooms and to other non-tribal entities.

Casino operating guidelines, called compacts, have been signed by 58 California tribes and Gov. Gray Davis. And with the March passage of Proposition 1A, only the blessing of the U.S. Department of Interior was still needed. That came Friday when Bureau of Indian Affairs head Kevin Gover in Washington placed his signature on each of the compacts.

Gover said his approval “helps bring to a close a long and difficult phase” in implementing federal Indian gaming laws in California.

In recent years, some tribal casinos have been raided by law enforcement officials, and others have been threatened with federal closure because they offered hybrid video machines that authorities said were illegal. The tribes fought back in court and at the ballot box.

“For 12 years the tribal governments of California have diligently moved forward, through some extremely difficult and trying times, to secure their rights of self-determination through tribal government gaming,” Gover said in a prepared statement. “Today, they have redeemed their rights.”

Aggressive Building Plans

The signing means tribes will now quickly develop posh facilities for gamblers, said Mark Macarro, chairman of the Pechanga Indians near Temecula and spokesman for two statewide campaigns to win voter approval of reservation gambling.

“We’ve been operating for years in a temporary facility, because we were cautious about financially committing ourselves to a project that was in a gray [legal] area,” he said. “Now we can really improve the quality of these facilities--make them top-notch--because we finally have a sense of security over their future.”

Throughout California, tribes are aggressively pursuing plans to renovate their casinos or build new ones. Several tribes have signed management agreements with Nevada companies to build $100-million facilities on their lands. A small tribe near Palm Springs has signed a casino management agreement with Atlantic City, N.J., casino mogul Donald Trump.

Daniel Tucker, chairman of the California Nations Indian Gaming Assn., said he couldn’t be “more excited and more happy.”

“It’s been a long battle since the process [to legalize tribal casinos] began in 1988 with the passage of the federal Indian Gaming Regulatory Act,” Tucker said. “There’s been one disappointment after another, but finally we’ve gotten to this point, and it seems surreal.”

Tucker is also vice chairman of the San Diego-area Sycuan tribe, whose casino was raided in the early 1990s by local law enforcement officials intent on shutting down its video gambling operations. But federal judges ruled that local sheriffs had no authority over reservation casinos, and the issue of their legality--especially since California operates its own lottery--remained mired in various federal courts for years.

Finally, in March, California voters approved Proposition 1A by 64.5% to 35.5%. The measure, placed on the ballot by Davis, the Legislature and the tribes, amended the state Constitution to grant tribes the exclusive right to conduct most types of Nevada-style gambling in California.

The proposition allowed implementation of the state-tribal compacts that Davis and the tribes signed in September, laying out casino operation guidelines and the level of state oversight.

All that remained was the approval of the federal government, which came Friday. The last formality: publication of the compacts in the Federal Register, probably within a week.

At that time, the tribes can legally introduce to California the the same kind of slot machines that are ubiquitous in Las Vegas and that serve as the most lucrative money-makers in most casinos. The tribes also will be able to offer such casino-banked card games as blackjack, poker and pai gow. Roulette and craps will remain illegal in California.

Throughout the 1990s, despite flare-ups with government authorities, some tribes operated card games, bingo, off-track wagering and, most profitably, video gambling machines that were similar to the Nevada-style slots.

As their casinos expanded, the tribes became one of the most dominant political forces in the state.

$100 Million Spent on Campaigns

Since 1998, the tribes have spent $100 million--more than any other interest group in the state--to win passage of state ballot measures and the election of supportive officeholders, including Davis and many state legislators.

“There is too much money, too much influence for [the Interior Department] to say no,” said Assemblyman Bruce Thompson (R-Fallbrook), one of the few legislators who oppose expanded gambling.

Four Northern California card rooms are considering a suit to block the compacts. In a letter last month to Gover’s boss, Interior Secretary Bruce Babbitt, the card rooms cited the federal Indian gaming law that says tribes can conduct only those games of chance permitted in the rest of the state. The card rooms complained that Nevada-style games remain off-limits to them.

A Bureau of Indian Affairs spokesman rejected their argument, saying Friday that the passage of Proposition 1A extended exclusive casino rights to the state’s tribes.

“Like other Californians, we support Indian self-reliance,” card room officials said in a statement Friday. “But we are concerned that the compacts could be only the first step in an unforeseen expansion of gaming in California, in particular, through tribes purchasing land in urban areas for use as full-scale casinos.”

With the state on the brink of a new era of gambling, Davis has yet to appoint members of the California Gambling Commission, which will have some authority to oversee aspects of the tribal gaming operations. The commission, for example, will review the backgrounds of vendors who sell slot machines to the tribes.

Tucker said the tribes, perhaps within 10 days, will apportion among themselves the number of slot machines each will operate. The compacts allow each tribe to operate a maximum of 2,000, based on a convoluted formula that hinges in part on the number of video slot machines each tribe currently operates. The state will have no role in the apportionment.

The specific compact language is ambiguous on the number of slot machines. Davis has said he endorses a “modest” expansion of gambling in California and that the compacts allow 45,000 slot machines--up from the current 19,000 video slots. Others, including the legislative analyst’s office, say ambiguous wording in the compacts could allow tribes to have as many as 113,000 slot machines.

Of the 107 federally recognized tribes in California, 38 operate casinos. A state consultant predicts that 52 tribes will ultimately have casinos and generate $4.7 billion in revenues, about triple the amount that the 38 current facilities now generate.

Among them are two tribes in San Diego County--the Barona and Viejas--that were termed a single tribe by the U.S. 9th Circuit Court of Appeals in a ruling in December. Each group is part of the Capitan Grande Band of Diegueno Mission Indians, whose reservation was split in 1932.

The court concluded that even though each group ended up with its own reservation, they remained a single tribe. However, the two, along with Davis and the Interior Department, disagree, and each will be allowed a maximum of two casinos and 2,000 slot machines.

“By history and tradition, these bands have existed separately,” said Sacramento lobbyist and political consultant Richie Ross, who represents both groups. “The U.S. government placed them as separate entities. . . . It’s a little absurd for people to come back now and say they are one.”

Richard M. Milanovich, chairman of the Agua Caliente Indians, who operate a casino in downtown Palm Springs and plan to construct another one near Rancho Mirage, said Friday’s historic event was bittersweet for him.

“We feel a great sense of accomplishment,” he said, “especially because we’ve won the backing of the people of California,” who supported Proposition 1A and its similar predecessor, Proposition 5--which was approved in 1998 but later held unconstitutional.

“The voters recognized that tribes have the right to self-reliance and to develop tribal government gaming facilities on their homeland,” he said. But he said the resulting negotiations with Davis in implementing Proposition 1A were not wholly satisfactory, leaving tribes with less than they sought, including limits on the number of slot machines.

“I don’t want to be too critical, but we had to agree to some terms that we’ll have to live with for years, that some of us are not very happy about,” he said.

Davis spokeswoman Hilary McLean said Friday that the negotiations were fair to all. “We think these are good compacts that were negotiated in good faith.”

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Morain reported from Sacramento, Gorman from Riverside.