Gov., Tribe in Talks Over Slots, 3rd Casino

Gov. Arnold Schwarzenegger plans to announce a deal today to permit one of the state’s richest tribes to open a third casino in the Palm Springs area, a pact that could open a new round of gambling expansion in California.

Top Schwarzenegger administration officials said Monday that the governor and the Agua Caliente Band of Cahuilla Indians were expected to sign a deal that would permit the tribe to have up to 5,000 slot machines.

The Palm Springs-based tribe, which in recent years has been one of the governor’s main antagonists, currently is authorized to have a total of 2,000 slot machines in its two casinos.

Administration officials spoke on the condition that they not be identified, noting that the deal remained unsigned and negotiations were confidential.

But the tribe’s representative acknowledged that there was a tentative agreement.

“The tribe would not be signing a deal ... if we weren’t happy with this,” said Nancy Conrad, Agua Caliente’s press secretary. “I think it is a good deal on several different fronts.”

The administration and several other tribes are in talks that could result in additional deals. All gambling compacts require ratification by the Legislature.

Agua Caliente, among the most politically active tribes in the nation, has spent $17 million on state campaigns since 2004. By striking a deal with Agua Caliente, Schwarzenegger may be ensuring that the band will not spend any of its millions to unseat him in November.

“I would imagine that had something to do with his thinking,” said Alison Harvey, executive director of the California Tribal Business Alliance, a consortium mainly of tribes that struck compacts with Schwarzenegger in 2004.

And Agua Caliente leaders “could be thinking he was more prepared to deal,” Harvey said.

The arrangement would require that Agua Caliente increase the payments it makes to the state to $81.9 million a year, up from the roughly $14 million it now pays. The compact would remain in place until 2030. The payments would come in two chunks:

* The tribe would pay $23.4 million annually on its existing 2,000 machines. The payment represents 10% of the tribe’s profit from slot machines in 2004 and 9% in 2005, administration officials said. That means the tribe earned roughly $234 million from slots in 2004 and about $260 million in 2005.

* The tribe would pay 15% of its profits on the additional 3,000 slots -- or $58.5 million, based on estimates that the tribe would earn $390 million a year on the 3,000 new machines.

Agua Caliente now pays $11.9 million into one fund intended to help local government, and $2 million into a second fund to assist tribes that have small casinos or no gambling operations.

The tribe no longer would pay into the fund that benefits municipalities affected by its casinos.

Instead, Agua Caliente would be expected to enter into separate agreements directly with local governments establishing payments to them.

But the accord omits pro-labor language that had appeared in previous compacts with other tribes. Unions sought that provision as a means to organize casino workers. Agua Caliente, the prime target of a union organizing campaign, fought the clause.

“If it doesn’t include labor, that would be a huge betrayal on the part of the governor,” said Jack Gribbon, an executive with Unite-Here, the hotel workers union that has been seeking to organize workers at California’s Indian casinos.

David Quintana, the tribal business alliance’s political director, said his organization’s members -- several of which have large casinos --”congratulate” Agua Caliente leaders for “doing what they think is the best thing for future generations.”

But Quintana added that he was a “little disappointed” that the governor’s aides failed to give the alliance an advance briefing.

The tentative deal comes less than two years after Agua Caliente spent $13.7 million campaigning unsuccessfully for Proposition 70, an initiative that would have allowed the tribe the right to unlimited gambling on its land.

Schwarzenegger, joined by the hotel workers union, campaigned against the 2004 initiative, saying he should strike bargains with the state’s Indian tribes.

During the 2003 recall campaign, candidate Schwarzenegger repeatedly called on casino tribes to pay their “fair share” to the state, a number he suggested would be 25% of their winnings.

Agua Caliente repeatedly has shown sway in the Legislature, suggesting that it can win ratification of its deal before the legislative session closes at the end of this month.

Recently, Agua Caliente Chairman Richard Milanovich led opposition to Schwarzenegger’s compacts with the Los Coyotes Band of Cahuilla Indians in a remote part of San Diego County and the Big Lagoon band, which has land in an environmentally sensitive part of Humboldt County.

Those deals would have allowed the bands to open casinos in Barstow, far from their reservations.

Agua Caliente also opposed the Quenchan Indian band’s plan to open a casino on its land in the California desert west of Yuma, Ariz.

All three deals have stalled in an Assembly committee.