Tribes Rap Gov.’s Call to Share Profit

While saying that California Indian tribes reap $4 billion annually from their casinos, the chairman of the gambling tribes’ trade group on Wednesday called Gov. Arnold Schwarzenegger’s request that they pay their fair share to the state “amusing and troubling.”

Anthony Miranda, chairman of the California Indian Nations Gaming Assn., stopped short of rejecting Schwarzenegger’s opening bargaining position that tribes pay at least $500 million annually to the state.

But Miranda and others, gathered here for an annual convention and trade show, criticized the Republican governor and raised questions about his understanding of the legal and historical relationship between state and tribal governments.

“Tribes are governments,” Miranda said. “Governments don’t tax other governments.”

Miranda’s comments, made in a speech and in interviews, came as tribes face what many of their leaders see as serious political perils. In addition to Schwarzenegger’s request, card rooms and racetracks are pushing to place an initiative on the November ballot that could end tribes’ monopoly on Nevada-style gambling in California.

The measure would authorize five tracks and 11 card rooms to have a total of 30,000 slot machines, the most lucrative game at any casino, and would pay $1 billion a year to state and local governments. Currently, 53 Indian tribes operate about 55,000 slot machines in California.

Miranda’s statements and those by others at the conference amount to the tribes’ first concerted response to Schwarzenegger’s position and come as they set about organizing a campaign to defeat the initiative.

“From our perspective,” Miranda said, “the governor’s concept of ‘fair share’ is amusing and troubling. It clearly shows that he doesn’t understand a very simple fact: that the state does not pay a single dime in compensation to the tribes. Nothing.”

Miranda explained afterward that, while state and local governments do provide a variety of services used by all Californians, tribes by custom and treaty deal most directly with the federal government.

Mark Macarro, chairman of the Pechanga Band of Luiseno Mission Indians, who have a new casino in Temecula, criticized Schwarzenegger’s comments during the recall campaign, and since his election, that tribes should “pay their fair share” to the state.

“That should never come out of the mouth of any candidate for governor,” said Macarro, who appeared on television advertising campaigns for ballot measures legalizing gambling on tribal land, and most recently during the recall campaign.

Macarro called for an effort in public schools to teach children about Native American history and what he called a “fourth branch of government” -- tribal governments.

Schwarzenegger spokesman Vince Sollitto would not respond directly to criticism delivered at the conference. But he called the coming negotiations between the administration and the tribes a “high priority” for the governor.

“The governor is seeking a win-win for the tribes and the state that will provide California with its fair share of Indian gaming revenue,” Sollitto said. A “stable, positive and long-term relationship” will be in the tribes’ best interest, he said.

Schwarzenegger has not taken a stand on the ballot initiative. However, the prospect that he might embrace it could be used as leverage in coming talks with the tribes.

Consultants working on the measure are among the governor’s closest political advisors. The initiative’s backers are expected next week to start gathering roughly 1 million signatures of registered voters needed to put it to a statewide vote.

The rift between the tribes and Schwarzenegger began during the recall race, when several tribes backed Lt. Gov. Cruz Bustamante to replace Gray Davis as governor. Schwarzenegger responded by describing tribes as special interests and airing television ads calling on them to share gambling revenue with the state.

Although individual tribes keep their revenue confidential, Miranda, extolling the benefits of tribal gambling operations, said revenue from Indian casinos is $4 billion a year. Outside experts have put the figure closer to $5 billion, perhaps more. The $4 billion represents the take from slot machines and does not include profits from cards and other games, said Michael Lombardi, a consultant to several tribes.

Under a compact negotiated by Davis and the tribes in 1999 and ratified by voters in 2000, casino tribes pay about $130 million into two funds to assist tribes with little or no gambling income, and to help cities and counties defray costs associated with casinos.

Under that deal, which is supposed to remain in effect until 2020, individual tribes cannot have more than 2,000 slot machines. About 15 tribes are at or near that cap. About a dozen, mostly in the Palm Springs area and in San Diego, San Bernardino and Riverside counties, believe their profits would increase if they had more machines.

The prospect that tribes could lose their exclusive privilege to operate casinos already is having an impact, said Lombardi, the tribal consultant. He said some lenders have begun raising the cost of borrowing for casino expansion. Tribes with track records are getting financing, albeit at higher interest rates.

The challenge to the Indian gaming monopoly has, however, “dried up capital for smaller tribes,” Lombardi said.