Pechanga, San Manuel sign new gambling agreements

By: EDWARD SIFUENTES - Staff Writer | Tuesday, August 29, 2006 10:21 PM PDT ∞

Under new gambling agreements signed by Gov. Arnold Schwarzenegger and announced on Tuesday, the Pechanga Band of Luiseno Indians near Temecula could more than triple the number of casino games it offers.

The two agreements, or compacts, would allow Pechanga and the San Manuel Band of Mission Indians in San Bernardino County to operate as many as 7,500 slot machines each. In exchange, the tribes agreed to pay up to $14.2 billion combined to the state over the life of the compacts, which expire in 2030.

"These compacts are a great deal for the state, the tribe and the local communities," Schwarzenegger said in a statement on the agreements.

However, it is still up to the Legislature to approve the deals. The state Assembly turned down a similar agreement with the Agua Caliente Band of Cahuilla Indians in Palm Springs after labor unions lobbied heavily against it, because they said it did not guarantee the casino workers the right to organize.

More than 60 tribes have state gambling compacts, which are required by federal law in order to build casinos on reservation lands. Most of the state's compacts were negotiated in 1999, but they required tribes to contribute little to the state.

Since he was elected, Schwarzenegger has insisted that in order to amend the agreements, tribes must pay more money to the state.

Schwarzenegger's legal affairs secretary, Andrea Hock, said each amended agreement is negotiated separately. But most agreements negotiated under Schwarzenegger have similar features, including environmental, customer and local community protections.

Labor rules have been a sore spot for some unions, such as the Agua Caliente agreement.

The Pechanga and San Manuel agreements require the tribes to resolve all disputes with employees, visitors and surrounding communities through binding arbitration, state officials said. State law will govern any personal injury or damage claims and the tribe will provide liability coverage.

In a statement regarding the new compact, Pechanga officials said its regulations give unions access to employees and allow employees the right to choose or reject union representation through a ballot election.

The Pechanga band opened a modest casino on its reservation near Temecula in 1995. The tribe opened its $262 million Pechanga Resort & Casino in 2002 and expanded the gaming facility in 2004. It employs about 5,000 people.

Under the 1999 compact it signed with Gov. Gray Davis, Pechanga is limited to 2,000 slot machines. Officials could not be reached for comment Tuesday on whether the tribe plans to expand its casino or build another facility.

The San Manuel band announced in a statement that it would gradually phase in the new allotment of slot machines into its casino near Highland.

State officials said the new compact requires Pechanga to pay $42.5 million each year for the tribe's current 2,000 slot machines. If the band adds more slots to its casino, it would pay 15 percent of its revenues on machines 2,001 to 5,000 and 25 percent on machines 5,001 to 7,500.

The state Department of Finance estimates each agreement could generate as much as $7 billion over the life of the compacts if the tribes choose to operate all 7,500 machines.

Unlike the 1999 compacts, which funneled the money to two trust funds, the new agreements send the money directly to the state's general fund giving the state greater spending flexibility.

It also means Pechanga and San Manuel will no longer have to pay into the state's Special Distribution Fund, which provides money for casino regulation, problems at local communities, problem gambling programs and grants for non-gambling tribes.

Both tribes agreed to pay $2 million each to the state's Revenue Sharing Trust Fund. It allocates about $1.1 million each year to tribes with no casinos, or tribes that have casinos with less than 350 slot machines.

The two agreements bring the total negotiated by the administration to 17. The compacts must be approved by the state Legislature, which has held up the past five compacts negotiated by the governor's office. The Legislature adjourns for the year Thursday.

Schwarzenegger spokesman Darrel Ng said the governor will work with the Legislature and the tribes to pass the agreements whether it's in this Legislative session or the next.

The Associated Press contributed to this story.

-- Contact staff writer Edward Sifuentes at (760) 740-3511 or esifuentes@nctimes.com.