Casinos Thriving, Tribes Suddenly Have a Role in Davis’ Budget

Michael Lombardi came up through the ranks of California Indian gaming the traditional way, such as it was.

He started in the 1980s by setting up charity bingo games at community centers and Indian reservations around Southern California. By the end of the decade he was general manager of what had become an 1,800-seat bingo hall at the Morongo reservation outside Palm Springs.

He was still there a few years later when a handful of tribes graduated from bingo and pull-tabs to more sophisticated gambling devices that the California attorney general and local sheriffs regarded as illegal slots. The tribes, insisting that these devices fell into a nebulous area, to this day describe them as “gray machines.”

Lombardi was thus a witness to the string of events -- police raids, lawsuits, resounding Indian victories in two public referendums, more lawsuits and begrudging negotiations by two governors -- that led to what he now calls “the prairie fire that became the California Indian gaming revolution.”

Lombardi first regaled me with this oral history a few weeks ago at the Pechanga Casino in Temecula, where a gathering of Indian casino leaders was in progress. A 54-year-old Berkeley graduate who claims Creek heritage on his mother’s side and works as a private consultant, he was sporting an extravagant ponytail of black hair that reached to the back of his knees. More to the point, he was demonstrating his remarkable command of the policy issues that swirl around Indian gaming in California.

A few minutes earlier he had delivered a keynote speech to the conference that traced tribal history back to the state’s 19th century bounties for Indian body parts and through a century and a half of abrogated treaties and other abuses. “The California Indian holocaust has been concealed from the public,” he told the crowd. “But California Indians are back.”

Indeed, they are -- at least as a commercial force. When voters passed Proposition 1A in 2000, essentially legalizing Indian casinos in California, most people thought they’d do well. But it’s doubtful anyone expected the tribal casino movement to change the state’s political and economic dynamics as dramatically as it has in the last two years, a period in which Indian casinos have been one of the few sectors showing heady and steady growth.

The byword most commonly heard at gatherings like the Pechanga conference is “sovereignty.” The term covers everything from the tribes’ refusal to be bound by state -- rather than federal -- environmental impact laws, to an insistence that Sacramento deal with them on a respectful government-to-government basis. The casino business has given tribal leaders the money to make this position stick for the first time in their history.

“You get the justice you can afford,” says Victor Rocha, a Pechanga member. “We can finally afford justice.” To get a sense of their newly found stature, one needed only to count the number of Sacramento politicians truckling for podium time at the Pechanga conference.

It’s not necessary to visit Pechanga to understand the scale of Indian gaming, but it helps. The brand-new resort consists of a 500-room hotel and a very busy casino floor featuring 2,000 slot machines, the limit per tribe embodied in the 20-year compacts that Gov. Gray Davis signed with the Indians in 2000. The tribes also agreed to contribute a total of about $1 billion over 20 years to funds assisting non-gaming California tribes and mitigating off-reservation environmental impacts.

These provisions are at the heart of the ongoing tension between the tribes and the state. Things should begin to come to a head in March, the only point in the next 18 years when the compacts can be reopened to reconsider the slot limit.

Davis fired the first shot in the coming confrontation during his budget message last month, when he announced that he wants $1.5 billion a year in revenue sharing from the tribes to raise the limit, based on his estimate that they’re already making more than $5 billion annually from slots alone.

At the Pechanga conference, a long line of Indian speakers stepped up to the podium to give their opinions of the governor’s proposal. Space is too tight to repeat the comments here, but they all could be summed up in the phrase: “Nice try, Poindexter.”

Among other things, the tribes dispute Davis’ estimate of annual revenues. (They’re willing to cop to something around $3 billion.) Although some Indian leaders say they may be willing to increase the tribes’ contribution to the state’s coffers, everyone expects lengthy negotiations over not only the actual amount of revenue sharing but also the formula through which it’s calculated. The tribes are wary of any percentage-based formula, especially one without a ceiling.

The renegotiations also are likely to underscore an important truth about the maturing of the tribal gaming industry here: Although the tribes are still speaking with a single voice on most issues, their individual interests are starting to diverge.

The sharpest differences are emerging between tribes with big casinos and those with little ones. To say that some Indian casinos aren’t constrained by the 2,000-slot limit is like saying Shaquille O’Neal wouldn’t feel cramped inside a pillbox hat. One of the most amazing things I heard about Pechanga came from the casino’s manager, Dual Cooper, who told me that the weekend wait for an available slot machine at his club runs up to two hours. “I could double in size right now,” he says.

But other tribes are perfectly content with 750 or 1,000 machines. They’re unlikely to think kindly of Pechanga or Morongo cutting precedent-setting revenue-sharing deals with the state in return for more machines.

Some observers say that a greater threat to Indian solidarity comes from tribes trying to curry favor with their local communities. “We’re afraid of the deal at Cache Creek,” says Rocha, referring to an agreement the Rumsey band struck last year with Yolo County.

The accord allows it to expand its casino outside Sacramento in return for payments to local government totaling $190 million over 18 years, along with an acknowledgment that the county could take the tribe to state court to resolve disputes over the compact. That, notes Rocha, is viewed as a breach of sovereignty.

The local tensions over Cache Creek’s expansion underscore the equivocal nature of casinos as economic development tools. Gaming may be the only sure-fire way Indian tribes have found to raise themselves out of poverty, but as an industry it inescapably carries a lot of baggage.

Most California tribes, which tend to occupy land in rural or suburban precincts, are sensitive to this. For example, some are decidedly uneasy about the Lytton band’s application to open an urban casino in San Pablo, just across the bay from San Francisco, for fear that it could rouse public antipathy and stir the competitive juices of non-Indian card clubs, some of which are barely hanging on in urban centers as it is.

In short, most tribes understand just how much they have at stake.

Lombardi, whose wife and daughter are enrolled members of the Morongo tribe, likes to draw a contrast between life on the reservation in earlier times, when two-thirds of the residents were on welfare, and today, when a stipend is supposed to be paid to all adult members and casino revenues fund college scholarships and medical care.

“In the old days you could expect to get a call in the morning if you had a car that started, because someone nearby would need a jump,” he says. “The highlight of the month was the arrival of the commodities truck -- the truck that carried USDA giveaways. Know what? The commodities truck doesn’t come to Morongo anymore.”