Tribes With Casino Profits Averse to Aiding Strapped States

An increasing number of cash-strapped states are vying for shares of the profits from booming, multibillion-dollar Indian gambling interests, representatives of the industry told a Senate panel Wednesday.

Members of six tribal nations spoke at a hearing before the Senate Committee on Indian Affairs, held to examine the impact of the state-tribal compacts established through the 1988 Indian Gaming Regulatory Act. In California, Indian tribes and Gov. Gray Davis are debating whether their revenue can be used to help ease the state’s $38.2-billion budget shortfall.

Davis had sought $1.5 billion annually from tribes earlier this year, during the only period for renegotiations set by the state’s 20-year compacts. The 61 tribal compacts in California, which has the largest Indian gambling industry in the nation, do not require that any gambling revenue go to the state. The agreements include provisions to share profits with tribes without casinos. They also establish a fund to help communities lessen the negative effects of tribal gambling enterprises, such as increased traffic and environmental concerns.

“There was no consultation,” testified Brenda Soulliere, chairwoman of the California Nations Indian Gaming Assn. Soulliere said California’s Indian casinos took in $2.9 billion in 2001, although Davis’ office has put the figure between $5 billion and $6 billion. The governor has since whittled his request to $680 million.

“I don’t think that’s going to work either,” Soulliere said. Negotiations, which might have raised the limit of 2,000 slot machines per tribe or the statewide cap of 62,000, have stalled, Soulliere said. “It really gets old being looked at as a cash cow.”

Amber Pasricha, a spokeswoman for the governor’s office, said meetings with tribe members are “going on right now.”

“The governor’s main goal in negotiations is to see an increase of cooperation” between local governments and tribes, she said.

Compacts established between tribes and states through the 1988 legislation vary widely. Connecticut’s Mashantucket Pequot tribe gives 25% of slot machine revenue to the state; money from the two Indian casinos there comprises 3% of the state’s $13-billion annual budget.

“States should not balance their budgets on the backs of Indian governments. It’s patently unfair,” testified Pedro Johnson, the executive director of public affairs for the Mashantucket Pequot, who said he is happy with the arrangement in Connecticut. “When my tribal nation was raising hogs and tapping maple trees, nobody cared about our revenue.” The Connecticut revenue-sharing agreement, considered generous, was one of the first of its kind.

More states started seeking a portion of Indian casinos’ profits for their coffers after a 1996 Supreme Court ruling in favor of Florida over the Seminole tribe in compact negotiations. The Department of the Interior subsequently adopted a loose standard for revenue sharing with states: Tribes must have “substantial exclusivity” over the local gambling industry.

“The law allows [states] to demand excess money,” said Sen. Ben Nighthorse Campbell (R-Colo.), chairman of the Committee on Indian Affairs, at the hearing. “There’s no statistical basis for revenue-sharing policy; no broad regulation that guides the Department [of the Interior] either.”

The Pojoaque Pueblo near Santa Fe are embroiled in a legal battle over how much of their profits to share with New Mexico.

“Revenue sharing has become a smokescreen for extortion,” Jacob Viarrial, governor of the Pojoaque, told lawmakers. However, tribal leaders did agree on the importance of gambling in Indian communities. The 1988 legislation “has become the only successful economic engine of Indian tribes across this country,” Viarrial said.