More Indian Gaming Possible if State Gets Cut

Gov. Gray Davis said Thursday that he would consider an expansion of Indian gambling operations if California’s Native American tribes agree to share more casino revenue with the state.

The governor, however, said he would not allow casino gambling to spread into urban areas as he seeks an additional $1.5 billion a year from California’s Native American tribes. If the gaming tribes reject a new compact with the state, Davis left open the possibility that he would try to strip them of their slot machine monopoly.

“My goal is this: to ensure that all gaming tribes fulfill their obligations, obey the law and pay their fair share -- both to the state and to non-gambling tribes,” Davis said in a statement after the speech.

Tribal leaders expressed concerns over the governor’s proposal, including the amount of money Davis is seeking and his failure to consult Native Americans before making the proposal last week in his 2003-04 budget.

“We haven’t had any conversations [with the governor],” said Mary Ann Andreas, vice chair of the California Nations Indian Gaming Assn. and a tribal council member of the Morongo Band of Mission Indians. “We don’t know how he arrived at the figure of $1.5 billion.”

California’s Indian gaming industry does not pay state taxes on its $5 billion in estimated annual revenue.

Twenty-eight tribes that operate casinos are required to share a portion of their revenue with non-gaming and small-gaming Native American tribes in California. They also pay the state a small percentage of earnings from slot machines in operation prior to Sept. 1, 1999, but the Legislature has yet to determine how that money -- expected to be about $90 million to $100 million a year -- will be spent.

The plan to expand the state’s share of Indian gambling revenue was the centerpiece of a speech Davis made before the Sacramento Press Club on Thursday, the latest in a series of appearances the governor has made this week to promote his proposed budget.

Davis set the stage for a formal move to reopen negotiations with Native Americans by serving notice that the state’s gaming tribes must address growing local concerns over the environmental impact of some tribal casinos. He named three people to head the team that will try to renegotiate the compacts: former California Supreme Court Justice Cruz Reynoso, retired San Diego County Superior Court Judge Anthony Joseph and attorney Frederick Wyle.

California signed 20-year gaming compacts with 58 tribal governments in September 1999. The agreements were approved by the Legislature and went into effect in 2000. The compacts allow each tribe to operate two casinos with a combined maximum of 2,000 slot machines.

The compacts allow both sides to seek renegotiation of the agreements to address environmental problems or make adjustments to the slot-machine cap or revenue-sharing trust fund.

“The compacts cannot be changed unilaterally,” said Susan Jensen, spokeswoman for the California Nations Indian Gaming Assn. “They would have to be renegotiated between the two sovereign governments.”

Renegotiating the compacts promises to be a complicated -- and potentially lengthy -- process. For instance, the 61 tribes that now have gambling compacts with the state -- only 53 of which operate casinos -- could choose to negotiate separately rather than as a group.

But Davis Rosenberg, a senior Davis advisor, said tribes seeking to expand their gambling operations and tribes seeking to go into the gambling business have considerable incentives for reaching a new agreement with the state.