5 Tribes, Gov. Sign Gaming Compacts

Gov. Arnold Schwarzenegger on Monday signed agreements with some Indian tribes extending their exclusive right to operate slot machines in California, but sharply scaled back estimates of what the tribes would pay the state in exchange.

Under the deals, signed amid fanfare at the ornate Memorial Auditorium three blocks from the Capitol, Schwarzenegger agreed to grant five of California’s 107 tribes the right to expand casinos on their own land.

The accords, which require approval by the Legislature, would be valid until 2030.

The tribes would be required to pay the state $1 billion in the coming year, which they would obtain by financing a bond. The $1 billion would be used for transportation projects, the governor said. In addition, tribes would pay ever-larger sums for new slot machines beyond the current 2,000-slot cap imposed by Gov. Gray Davis in 1999.

“This is a fair deal for the tribes and for our state,” Schwarzenegger said, appearing with leaders of the five tribes, his top aides and several labor and business leaders.

“This moment is absolutely historic,” Anthony Pico, chairman of the Viejas Band of Kumeyaay Indians, said as he prepared to sign the compact.

The compacts, which run more than 30 pages, plus side agreements that cover many more pages, would expand the right of unions to organize workers at tribe-owned casinos. In exchange, unions would have to promise that they would not strike at the casinos.

“It is a bow to the tribes’ sovereignty,” said Jack Gribbon, California political director of the Hotel Employees and Restaurant Employees International Union. Gribbon said that although the deal was “not perfect by any stretch,” the union planned to lobby for its passage.

The accords also include detailed provisions that require tribes to adopt ordinances that mimic state environmental law and civil law that allows patrons who are injured to have their claims arbitrated.

Tribes would also agree to submit to binding arbitration when they have disputes with local government -- a provision lauded Monday by local government officials and decried by some tribes.

After signing the deal, Schwarzenegger -- draped in an ornamental blanket that tribes had presented him -- departed the stage. He did not answer questions about the agreement.

The cumulative size of the tribes’ annual payments is unclear. At a briefing last week, senior administration officials, speaking on the condition that they not be named, pegged the annual payments at $275 million. On Monday, Schwarzenegger placed the payments at $150 million to $200 million, depending on the number of new slot machines installed by the signatories.

The governor’s legal secretary, Peter Siggins, explained the difference as a math error.

“We were trying to pencil out at the time what we estimate those payments to be,” Siggins said. “It was a very preliminary discussion and we have since had time to look at those numbers.”

Schwarzenegger repeated his vow to campaign against two gambling-related initiatives on the November ballot. A Palm Springs tribe is pushing one initiative to gain unlimited expansion rights on Indian land. Card rooms and racetracks are backing a competing measure that could end the tribes’ monopoly and permit 30,000 slot machines in the tracks and card clubs. If either measure passes, the new compacts will become void.

The five participating tribes are the Viejas, Pauma and Pala bands in San Diego County, and the Rumsey Band of Wintun Indians and United Auburn Indian Community in the Sacramento area. The deals signed Monday would replace compacts the tribes signed in 1999 with Gov. Gray Davis, who forged gambling agreements with more than 60 tribes; those were ratified by the Legislature and voters.

The Davis pacts, negotiated when the state was flush with a multibillion-dollar budget surplus, required participating tribes to pay $130 million a year into two state funds, most of which is for tribes with no casinos or small gambling operations.

The Davis deal gave tribes the exclusive right to operate slot machines and various “banked” card games, including blackjack. The Schwarzenegger agreement reaffirms the tribes’ monopoly on Nevada-style gambling in the state and says one of its main goals is to “enhance” that exclusivity.

Tribes would pay from $12,000 to $25,000 for each new slot machine, depending on the total number of machines in each casino.In addition, after 18 years when the $1 billion bond is fully repaid, the five tribes would continue paying the state the larger of either $100 million or 10% of their “net win,” the amount earned by casinos after paying off jackpots, for the final seven years of the compact.

The five tribes also agreed to pay $2 million each to tribes with no casinos or small casinos.

Although various experts estimate that Indian gambling generates profits of between $4 billion and more than $6 billion, the exact size of the industry remains unknown. Tribes do not reveal their profits.

The state has agreed to arrange the bond deal in a way that “does not require public disclosure of tribal or tribal business enterprise, financial information or business information not currently in the public domain.”

Among the most notable provisions of the new compacts are clauses ensuring that tribes would retain their exclusive rights to operate slot machines by defining their territorial rights.

The three San Diego County tribes that signed the deal would have territorial rights that extend into Los Angeles, Orange and Riverside counties. Territorial rights for the two Sacramento tribes would include the San Francisco Bay Area.

Attorney Howard Dickstein, who represents three of the tribes that signed deals Monday, said that if non-Indian-owned card rooms or racetracks were to gain even one slot machine within any of those territories, tribes no longer would have exclusivity and no longer would be required to abide by the compact’s terms, including making payments to the state.

The compact grants tribes the right to sue to block non-Indian card rooms or racetracks from obtaining slot machines.

Several tribes with large casinos continued to balk at the governor’s new deal.

“We respect the sovereign right of other tribes to negotiate with the state,” said Adam Day, public affairs director for the Sycuan Band of Kumeyaay Indians, outside San Diego, which has one of the Davis pacts. “We would simply appreciate it if the state respected our tribe’s sovereignty by negotiating a compact that reflects our tribe’s different circumstances.”

Sycuan and other tribes have offered the state $1 billion, plus 10% of their net win, the amount earned after casinos pay jackpots -- only to be rejected by the Schwarzenegger administration. Tribes that have declined to sign deals with Schwarzenegger cite an array of problems.

Mark Macarro, chairman of the Pechanga Band of Luiseno Indians, criticized the provision of the new pacts that would authorize outside arbitrators to decide disputes between tribes and local government.

“The state would never hand over its sovereign decision-making power to an arbitrator in its dealings with other governments,” Macarro said in a statement.

“To agree to this condition would be an abrogation of our tribal sovereignty.”

Before entering public office, Schwarzenegger tried to invest in a new casino in Las Vegas. The deal did not materialize. The governor also reported to the state last year that he had holdings in International Game Technology, a major slot machine manufacturer. Since being elected, he has placed his holdings in a blind trust.

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Times staff writers Peter Nicholas and Robert Salladay contributed to this report.