Tribes prepare for challenge on slots monopoly

By: EDWARD SIFUENTES - Staff Writer | Sunday, January 18, 2004 10:13 PM PST ∞

State voters may soon be asked to settle the fate of California's gambling future.

Since the state's Indian tribes were granted the right to operate gambling casinos in 2000, state and local officials have been calling for a larger share of the betting profits. Card club and race track owners have clamored for the right to operate slot machines, which give Indian casinos most of their profits.

Now a group of card club and racetrack owners are proposing an initiative that would challenge tribes' monopoly on the so-called one armed bandits.

Tribal leaders gathered at Palm Springs last week prepared for a counterattack.

"The tribes have come to the conclusion that the initiative has to be opposed," said Jacob Coin, executive director of the influential California Nations Indian Gaming Association, a trade organization. But Coin and other leaders at the conference Thursday said little about how tribes would mount the challenge.

Secretary of State Kevin Shelley is expected to approve the language of the measure soon. It would require some 600,000 valid signatures to qualify for the November ballot.

A spokesman for the racetrack and card clubs said the initiative is intended to create funding for the public safety and education programs in light of the state's budget troubles.

"The initiative speaks for itself," said spokesman Greg Larson. "Its about providing funding streams for public safety and education."

The ballot initiative would require that all tribes with gambling casinos help the financially strapped state or let 16 betting establishments, including Oceans 11 in Oceanside, operate up to 30,000 slot machines. It would require that tribes share 25 percent of their profits with state and local governments.

There are about 47,000 slot machines being used at 61 tribal casinos. Five casinos are in North County at the Pala, Pauma, Rincon, San Pasqual and La Jolla Indian reservation.

However, tribes, who pride themselves on being separate, sovereign governments, resent the idea of being lumped together in a pile. Leaders want Gov. Arnold Schwarzenegger, who asked for $500 million from tribes, to approach each individual tribe.

Schwarzenegger criticized gambling tribes as "special interests" in campaign ads, and quickly named former state appeals court Judge Daniel Kolkey, an aide to Gov. Pete Wilson, as his top gambling negotiator.

Squeezing more money from tribes will not be easy.

John Currier, chairman of the Rincon Band of Mission Indians which operates a large casino at its reservation near Valley Center, said his tribe is willing to negotiate, but only if a new compact will benefit Rincon.

"The reality is that there are certain economics that are going to work for tribes, or they are going to go out of business," Currier said. "They are all in different stages of maturity. We don't want 3,000 machines, and we may never need 3,000 machines."

After voters approved Proposition 1A allowing casinos on Indian lands four years ago, tribes signed 20-year agreements with then-Gov. Gray Davis. The compacts, as they are called, allow up to two casinos and a maximum of 2,000 slot machines for each tribe.

Under terms of the agreement, tribes are required to pay relatively little money into two trust funds ---- one for profit-sharing with poor and nongambling tribes; the other offers money to deal with off-reservation effects of their casinos and pay for regulation and for gambling addiction programs.

Tribes pay a total of about $130 million year into the two funds.

Most tribes say they are happy with their agreements. About a dozen operate the maximum number of machines allowed, and only a handful could use more slots, leaders say.

The Pechanga Band of Mission Indians in Southwest Riverside County owns one of the largest Indian casinos. Pechanga Chairman Mark Macarro said his tribe could probably use twice as many machines, but would only go so far to negotiate for them.

"What's motivating tribes about negotiating is an opportunity to help the state and get more machines," Macarro said. "We are willing to help, but there are limits. We can live with our compact for the next 16 years."

Macarro said the threat of the initiative "has not created any pressure to negotiate at all."

Nevertheless, tribes are preparing to fight it either by challenging the measure in court, fighting it through a media campaign, or by offering their own counter-initiative, leaders said.

"We should always conduct ourselves as good neighbors and citizens, willing to listen and talk but always willing to defend our fundamental beliefs, principles, economic interest and overall cultural identity," said Anthony Miranda, a member of the Pechanga tribe and chairman of the Indian gambling trade group.

One local card club manager, said his business could use slot machines and they are willing to give the state a third of what the machines take in. That money could be used by local governments for education, police and fire protection.

"I do not think there should be a monopoly (of slot machines) by any special group," said Bob Moyer, manager of the Oceans 11, a card club in Oceanside. "We're willing to give 33 percent in taxes."

Moyer said his business has slowly started to recover after dipping by about 20 percent when Indian casinos first opened. He attributed the resurgence in attendance to popular televised poker tournaments.

"We are already regulated by the state. Card clubs have operated for over 100 years. It makes sense that they'd be given something," Moyer said. "As Americans we have a right to compete against the people who have a monopoly."

Tribal leaders say the people of the state and the courts have given them exclusive rights to operate the machines.

A federal appeals court upheld California's tribal gambling law in December, ruling that it violates no federal law even though it gives tribes special privileges to operate casinos.

The 9th U.S. Circuit Court of Appeals in San Francisco upheld the July 2002 decision by U.S. District Judge David F. Levi in Sacramento, who ruled against four San Francisco Bay area card clubs trying to stop an Indian casino in San Pablo.

The Associated Press contributed to this report.

Contact staff writer Edward Sifuentes at (760) 740-5426 or esifuentes@nctimes.com.