Tribes survey changed casino landscape
By: EDWARD SIFUENTES - Staff Writer
Pechanga wastes no time rolling out new slots after victory at the ballot box | ∞
Just days after voters approved a huge expansion of American Indian gambling for four tribes, officials with the Pechanga band in Temecula said Thursday that they had already begun installing nearly 400 additional slot machines at their casino.
That represents a fraction of the 7,500 machines allowed under the agreement for Pechanga that voters approved Tuesday. But it brings the band's number of Las Vegas-style slot machines to nearly 2,400.
Propositions 94-97 grant the four Southern California tribes, including Pechanga and Sycuan in East County, a total of 17,000 machines in exchange for giving a larger share of their revenue to the state.
North County tribal officials who opposed the agreements responded to the outcome of the election with a mix of resignation, concern and resentment. But the full effect of a nearly 30 percent increase in tribal gambling is still unclear.
Divisive campaign?
The ballot campaign was one of the most expensive in state history, costing nearly $150 million, with over $100 million in support. It also proved highly divisive for California's tribes.
The effects of the bitter campaign were still being felt last week. One tribal official said he blamed Gov. Arnold Schwarzenegger for choosing to negotiate with a small group of wealthy, influential tribes over others.
"Our position is that the governor has done nothing but create divisions among the tribes," said Bo Mazzetti, vice chairman of the Rincon Band of Mission Indians in Valley Center.
The Rincon tribe, which owns a casino near Valley Center, published a newspaper ad a few days before the election opposing the agreements.
Mazzetti and other tribal leaders say the new gambling compacts, which provide up to 25 percent of gambling revenue to the state, are unfair to tribes whose casino location is less favorable than that of tribes like Pechanga.
That is partly why Pala, which owns a casino near Pechanga, contributed millions to the campaign challenging the agreements, Pala leaders say.
They and leaders of other tribes who opposed the compacts said they were concerned that allowing neighboring casinos to expand would suck business from them.
Pechanga's new agreement enables its casino, on prime real estate near Interstate 15, to grow into one of the largest in the country with a total of 7,500 machines.
By comparison, the huge Foxwoods Resort & Casino, owned by the Mashantucket Pequot tribe in Connecticut and advertised as the world's largest casino, has 7,200 machines.
Thus far, the Pechanga tribe has not said whether it will add all the slot machines allowed under the compact, or even expand its casino's footprint. The tribe's officials have said they will act quickly but methodically to implement the agreement.
However, if Pechanga and the three other tribes are going to keep their promise of paying the state $9 billion over the next two decades, those new machines will need to start turning a profit in short order, gambling analysts say.
Quick start
Alan Meister, an economist who conducted a study funded by the tribes that favored the agreements, said some of the tribes may begin installing some slot machines quickly without significant changes to their casinos.
Meister's study estimated that the agreements would generate about $10 billion for the state over the 22-year span of the deals, provided that they begin installing some of the machines by next month and fully implement all the machines by 2017.
Jacob Mejia, a spokesman for the tribe, said Pechanga will gradually phase out about 1,400 bingo machines and replace them with Las Vegas-style slot machines.
Anyone outside the casino will not notice the difference, Mejia said, adding that the tribe plans no changes to the building's exterior.
That's significant because under the agreement, the tribe is required to negotiate with governments, including the city of Temecula, if there is a significant expansion or remodeling of the casino.
Temecula Mayor Mike Naggar said tribal and city officials met last year to begin negotiations but suspended the meetings until after the election. Naggar said Thursday that the negotiations had not resumed and no agreement had been reached.
Mejia said negotiations with the city will continue.
In a corner?
The compacts could set the stage for a new round of negotiations between tribes and the state, said Professor I. Nelson Rose, who specializes in gambling law at Whittier Law School.
That's because most tribes in the state operate under an agreement negotiated in 1999 with then-Gov. Gray Davis. The agreement set a limit of 2,000 slot machines per tribe and a statewide cap of 62,000 slot machines, all of which are in use at tribal casinos.
After Davis was recalled in 2003, Gov. Schwarzenegger was elected largely because of his promise that he would make tribes "pay their fair share."
Tribes hungry for more slot machines are forced into a corner where their only options are to negotiate or sue, Rose said. The Rincon tribe has chosen to sue.
The Rincon band, which operates a 1,600-slot casino near Valley Center under the 1999 agreement, has said it would like to add more slots. But tribal leaders say the governor wants the tribe to pay too much to the state in return.
They say the governor has tried to use other recent compacts ---- with bigger, richer tribes ---- as a template for a deal with Rincon.
The Rincon band sued Schwarzenegger in 2004, saying that the fees the governor is seeking amount to an illegal tax on tribal governments. Rincon is asking the court to appoint a mediator to resolve their differences.
"As far as we're concerned, what happened (election) night changes nothing," said Scott Crowell, Rincon's attorney.
Crowell said Rincon is willing to pay regulatory fees as well as make payments to offset the effects of the casino on the surrounding areas, such as traffic.
But the tribe is not willing to make direct payments to state coffers, he said.
Room to grow
If the lawsuit fails, Rincon may have little choice but to give the governor what he wants, Rose said.
"It's better to have 75 percent of something than 100 percent of nothing," he said.
Other tribes in North County have already taken the plunge. Pala and Pauma renegotiated their 1999 agreements in 2004. Their agreement removes the 2,000 machine cap and gives them access to an unlimited number of slots.
But Pala leaders say the fees it must pay, which increase as the number of machines increases, become so high that it makes it economically difficult to ramp up gambling at their casino.
Pala Chairman Robert Smith said Wednesday that his tribe planned no immediate changes to its casino.
"We're still going to be there," Smith said. "We're not going to adjust any way, up or down."
During the campaign, opponents of the agreements said they feared a few large tribes would gobble up most of the state's gambling-market pie.
But Meister, the economist, said he is optimistic that the gambling market in California has plenty of room to grow.
And even if competition tightens in the short run, that's OK, Meister said.
"To the extent that there's competition, competition is good for the consumers," he said. "To have Pechanga and Pala compete for those dollars, that's a win for consumers."
One on one
Other tribal industry leaders also see the outcome of the election in a positive light. They said each tribe has the sovereign right to negotiate with the state or not depending on their own interests.
They saw the ballot measures as an attempt to infringe on their rights.
"Propositions 94-97 were a direct assault on the sovereign right of all tribal governments throughout the country to negotiate gaming compacts on a government-to-government basis," said Anthony Miranda, chairman of the influential California Nations Indian Gaming Association, an industry trade group.
Miranda, who is also a Pechanga tribal member, added that tribes need to make decisions about negotiations solely concerned about what's best for the tribes.
"What happens at that table is going to be negotiated between two sovereign governments," he said.
Contact staff writer Edward Sifuentes at (760) 740-3511 or esifuentes@nctimes.com.
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sick of it wrote on Feb 10, 2008 12:49 AM:Pala is so full of it. They negotiated badly and it is sour grapes.(edit)
Pick your poison wrote on Feb 10, 2008 4:00 AM:You can take out a mortgage or take a trip to the casinos. Either way - you might want to take a quick look at the odds. Life's a gamble. I like living in my gamble. Your choice depends on whether you want a short or long-term investment, your age, and your recklessness factor. I still like real estate. And I always seem to choose the real estate with strong Indian ties. ?
Ann wrote on Feb 10, 2008 7:17 AM:"The casinos spent $100 million in support of the props." Follow the money. "Pechanga could become the largest casino in the COUNTRY." and that's a good thing?
"the gambling market in CA has plenty of room to grow" and that's another good thing?
Awesome wrote on Feb 10, 2008 8:12 AM:I hate walking into the casino and having to search for or wait for a machine to play. More machines will be great. I hope they add lots of poker and blackjack machines too.
anotherview wrote on Feb 10, 2008 9:30 AM:Thanks to Mr. Sifuentes for his straight reporting on the tribal casino expansions the voters recently supported. Yes, in 2004, the Pala Indian Reservation leadership negotiated with the state to amend its tribal-state gaming compact. Now, we hear this complaint: "Pala leaders say the fees it must pay, which increase as the number of machines increases, become so high that it makes it economically difficult to ramp up gambling at their casino." Assuming the terms of the Pala compact remain unchanged from then, a fair observer could ask, Why did the Pala leadership negotiate and agree to this new compact with its apparently unacceptable terms? The Pala leadership could have negotiated a better deal. In turn, a fair observer might also ask, Why would another gaming tribe later want to copy this Pala compact with its restrictive terms? Besides, even if the Pala compact contained better terms, each gaming tribe may negotiate a compact from its own interests, as the news report notes. The 4 gaming tribes that prevailed in the recent statewide election did so. The Pala leadership should stop complaining of the results of its own flawed negotiations. Further, the Pala people may wish to consider a change in their leadership, to prevent such future fiascos.
Yikes wrote on Feb 10, 2008 11:09 AM:I watched a live news feed from Pechanga Casino where the tribal members gathered to watch the results. They interveiwed an elder and asked her about the pending results that was a sure victory for Pechanga. This is somewhat her response. "This is great for me" and continued on how this is going to make her alot of money without really coming out and saying it. Not once did she mention anything about how the victory may help the economy, help schools and the State of California decrease the deficit. It was all about her getting richer. Her comments made me sick!
Temecula Resident wrote on Feb 10, 2008 1:16 PM:Anotherview views nails it right on the head. Pala's leadership negotiated a bad deal. Live with it.
A bad deal all around wrote on Feb 10, 2008 2:27 PM:Slot machines are never a good gamble --huge losers longterm-- but Indian casino machines have horrible odds compared to those in Vegas. A few years back a friend who works in the machine maintenance dept at Pechanga told me they had about a 75% payback rate, compared to over 90% in Vegas. Either way you lose your money, but a whole lot faster at the Indian casinos. Now with the state demanding a cut of the pie, think those payback rates won't go down even further? So the state is now taking a direct role in the growing gambling problems of its residents. (Of course it already did with the lottery, so I guess this is just digging a little deeper in our pcokets.) Anyone who plays slots (or lottery) might as well just save themselves the gas and flush their money down the toilet, or toss it in the fireplace and get a little heat from it.
BMC wrote on Feb 10, 2008 2:49 PM:When I was a child, in school I somehow learned about cowboys fighting indians. All we see now is indians fighting other indians. Pala should get over it and live with the compact they have. From my perspective, I don't see any tribe with a casino going broke. When Gray Davis was recalled (which I voted against), who out there realized how pro-casino expansion Gov. Schwarzenegger would be. If Davis was still governor, the tribes would still be stuck with their low slot limits. They should feel fortunate for what they got, and stop complaining.
San D'LasVegas wrote on Feb 10, 2008 7:15 PM:Yet another reason to leave here. Go live in Valley Center for a few weeks, and there's your glimpse into the future of California. If you've lived in Vegas and liked it, come on down. If not, learn to like it or find a more desirable place to live, and watch peacefully from a distance as the value of properties in San Diego County dwindle.
Thanks, Governator, for helping turn this once beautiful state into another greed seeking, money-glutting Sodom and Gomorrha.
You Can Help The Budget Crisis Too wrote on Feb 10, 2008 7:23 PM:Wow, I can feel the State budget crisis easing already! For those of you wondering about how tribes like the Pechangas become so successful, here is the secret: (1) Be located in the heart of an affluent region, (2) Be located minutes from a major freeway, and (3) be granted a business monopoly that operates on the exploitation of weaknesses and carnal habits of society. If you got the exclusive distribution rights for marijuana, you could ... be rich beyond your wildest dreams, and you, too, could throw some pocket change at Sacramento.
Here we go again... wrote on Feb 10, 2008 11:46 PM:"You Can Help The Budget Crisis Too" is beating the old dead horse theory that Indian gaming begets prostituition and a legalized drug culture. PA-LEEZ, Stop with your rediculous fear campaign. I am sick of all the "sky is falling" people out there who prey on people's fears. Get over it. Live your life, and stay away from the casinos if you are so frightened by them or what they "influence." I like to go to Pechanga and catch a show or a boxing match, a good meal and some hours of entertainment playing games. Leave me alone. I'll enjoy my world, and you go bury your head in your ideal world, but stop imposing your will over me. The votes are in and the majority agree with me...live and let live.
Luiseno Pechanga wrote on Feb 11, 2008 9:53 AM:I guess now that the Props have passed you will be helping your own blood out . Please Pechanga enroll the children who have been waiting on your endless moritorium. If you can abide by the State of California's rules why can't you abide by your own rules and stop the moritoruim.They deserve to be part of their own tribe.
Luiseno Pechanga wrote on Feb 11, 2008 10:01 AM:I voted YES on Prop.94. Even though I have been in the moritorium for 10 years. I will always support my tribe even though they do not support me.I did it for the future, for my kids maybe one day the new leaders will see the future better than the ones who are there now.
interested wrote on Feb 11, 2008 10:38 AM:You know, Pala was claiming that Pechanga and the other 3 casino's were being greedy with these new compacts. But now other tribes and the governor are looking to renegotiate thier old compacts. Doesn't sound like much of a monopoly. ... Then they try thier hardest to keep other tribes from getting a new compact because thiers wasn't as good. The "Big 4" didn't sign a compact making it so other tribes couldn't sign on and benefit (the governor is alreadu talking to other tribes). But it seems like Pala takes every chance it can to keep other tribes down for thier own benefit.
Fooled by Indians wrote on Feb 12, 2008 8:35 AM:We know it's too much to ask for truthful politics, as that by nature is an oxymoron. But we never cease to be amazed that blatant deception in politics cons the voters so often.
The backers of the Indian gaming propositions take the prize this year, for the claim the measures would provide $9 billion for state government.
"Wow!" many voters apparently thought. "That would take a big chunk out of that $14.5 billion state deficit we keep hearing about!"
Well, no.
The deficit isn't a one-time thing ? the state spends billions more than it takes in each and every year. But the $9 billion in casino revenue is a sum ? the maximum the state could get over the 22-year life of the compacts.
That's a messy little detail that just didn't get mentioned somehow: The $14.5 billion deficit is this year; the $9 billion is over the course of 22 years.
The propositions actually pledge the four involved tribes to pay just a bit over $120 million each year. Any increase in revenue to the state above that would come from increased profits the tribes would realize if they added the 17,000 slot machines that were approved Tuesday.
And for the state to get that $9 billion that was bandied around, those machines would need to have been placed on Wednesday, and gamblers would have to be working them 24 hours a day by now.
The state won't get the $9 billion because the tribes aren't going to invest in the equipment until ? and if ? there's the demand.
Sometime around 2030 the 17,000 extra slot machines might be in place, in which case the state will be raking in something under a half-billion bucks annually.
And in a few years, the same people who can't understand why approving the Lottery back in 1984 didn't solve funding problems for schools will be befuddled why approving the gambling compacts didn't eliminate the state's budget deficit.
In both cases, too many people didn't read the fine print. Neither the Lottery nor the gaming compacts made any pretense of solving their particular problem, if you read the ballot. A casual voter couldn't have known that from just watching the television ads, and apparently there are a lot of people such as that.
The bad thing about this year is we get three chances to be deceived. There'll be propositions in June and November that won't be what they claim to be. It's up to voters to see that doesn't happen, and a lot of them won't make the effort.
How ugly can this get?
Fools for believing the propaganda by ... Pechanga & their friends.
PA-LEEZ Get The Point wrote on Feb 12, 2008 9:59 AM:You're off on a tangent. The point is how much money can be gained by being allowed to capitalize on a market that others are prohibited to exploit. It's called a monopoly. If you want to truly fix the budget, open up the market to everyone. In the meantime, people like you shouldn't think for a moment that the money you spend at Pechanga is doing anything for anyone's budget, except for the Pechangas.
to Fooled by Indians wrote on Feb 12, 2008 1:03 PM:Are you kidding me? The YES ads ALL mentioned that the $9 billion would be OVER THE LIFE of the compact. No deception. There have been numerous accounts that the $9 billion would be realized if all the 17,000 machines are ADDED by 2017!! Not tomorrow as you say. Again, no deception. Every newspaper article pointed out that these 4 deals would help the ailing state budget by donating about $200 million per year. Again, no deception.
The YES side aired no ads or no news articles that were not 100% fact. However, the no side aired ads that were about 90% FALSE LIES. Here are a few examples:
1) No revenue sharing amongst non-gaming tribes? LIE. Revenue sharing was written into the agreements that would provide at least the same amount of contributions to the non-gaming tribes as under the Davis compacts.
2) No worker protections? LIE. The compacts have labor agreements in place that allow workers to unite if they so desire. Worker protections are fully in place under these deals, otherwise you wouldn't have seen approval of these agreements from the pro-labor Democrats who voted for them.
3) No environmental protections? LIE. These agreements strengthen environmental protections asking these 4 tribes to provide CEQA standard environmental reports and protections for any building or expansions. This is no less than any individual or business in California is required to do.
Let's all examine who the real deception campaign come from. You are something else...really!
Here we go again... wrote on Feb 12, 2008 1:12 PM:to PA-LEEZ. Who cares what the Indians get? Good for them. As I mentioned...I go for my own entertainment. I enjoy my time at Pechanga. Pechanga is a business. Their job is to entertain. I pay them to entertain me. Seems like America to me. Pechanga has paid me back in slots and also in my entertainment value.
I never expected my entertainment dollars to pay to fix the California budget. My YES vote was not made "to fix the budget." I don't think for a moment that the money I spend at Pechanga fixes the California budget, but it does help. Your NO vote did nothing to help the California budget. NOTHING!!
I hope the Pechangas thrive! They offer a product I enjoy, so kudos to them for making a buck on my enjoyment. And kudos to them for choosing to share some of my money with California.
No Side Deception Continues wrote on Feb 12, 2008 2:11 PM:"Fooled by Indians" says the YES side was deceptive with their message of adding $9 billion to the state over the next 2 decades.
Every ad I saw on TV or every newspaper accounting, or even my voter information guide STATED VERY CLEARLY that these agreements will "provide hundreds of millions for the state government each year, totaling $9 billion over the next 2 decades."
What is deceptive about that? Pay attention and stop spreading your deceptive lies. Stick to facts and stop misleading people. Shame on you.
Sickening wrote on Feb 12, 2008 3:20 PM:9 Billon is deceptive & very overly optimistic. The state must rely on the "greedy 4 tribes"(Pechanga)to be honest & audit themselves PLEEZE! Indepentent analysts agree that 9 Billion is a strech. I won't even go any further as the casino backers have tunnel vision on their ever growing PER-CAPITA checks & will say anything they want as they are soverign. They act & feel as though they are above the law. Way to go California!!!! As Pechanga is laughing all the way to the bank. Another is a joke too.
More deception from Sickening wrote on Feb 12, 2008 3:57 PM:There is yet another LIE from the No campaign.
(The tribes will audit themselves and decide what money the state gets?) WRONG!! Another LIE!! Fact: The compact agreements REQUIRE INDEPENDET FINANCIAL AUDITS of the tribes' revenues to be given to the state. These audits can occur at any time the state desires. That is a FACT.
Again, read the language in your voter information pamphlet, or in the compacts themselves. "Sickening" is continuing to spread the lies and deception that the No campaign was built on. This person has it out for Pechanga because of sour grapes. Peroid. Ax to grind, vendetta. Whatever you want to call it, you are extremely transparent and have no beef with any of the other 3 tribes or the deals they got with California. You just want to see a loss for Pechanga. Get over it, buddy. Nobody is saying "anything they want" as you put it, here but you. You are saying what you want, and you know what, you have been exposed as a liar. That's a fact.
wow wrote on Feb 12, 2008 4:23 PM:way to go NC Times, way to not post blogs defending the NO view. You don't want to upset one of your big Advertisers(Pechanga) that don't like comments that say it like it is. I mean that oppose Pechanga Propaganda. Allowing Pechanga blogers to use inflamitory language & belittle people who speak of TRUTHS occuring at Pechanga with different FACTS, that the tribe chooses to ignore or hides behind soverignty. Remember newspapers report news not take sides,$$$$$$$$$$$$$. Pechanga is out of control & overrun by corruption& greed. Open your eyes. GOD HELP US ALL. Hunters will never go away-IT IS OUR LAND!!the real-"Original Pechanga People"
PA-LEEZ wrote on Feb 12, 2008 4:46 PM:Hey, I'm happy that you are so easily entertained. I should be so lucky as you to be content with spending one's leisure time plopping their fat butt in a chair in a neighborhood smoke-filled room feeding money into an electronic machine with hundreds of octogenarians, because these trips to "bury my head" in Hawaii, Florida, Lake Tahoe, etc. can be a bit costly. I will give you credit for being honest about why you voted YES on the Gambling Props, as I have more respect for someone who votes in the interests of personal gratification than for someone who thinks the Indian chump change will make any significant impact to offset fiscal mismanagement. If, by some miracle, you and your fellow one-armed bandit jockeys are still alive in 20 years, you can join me to see how close we are to that $9 Billion pie-in-the-sky figure. Speaking of entertainment dollars, let's get back to that marijuana proposal...
Here we go again... wrote on Feb 12, 2008 5:32 PM:Hey PA-Leez. I am 26, very athletic and am not what you represent me to be in your post. Neither are my friends who go to Pechanga and like going to the club, to shows, to good restaurants and like to play poker and gamble.
Your comments continue to cement your opinion as one that is very narrow and skewed. Go to Pechanga some Friday or Saturday night and see who the people are who are there. I think you would be surprised.
I will be around 20 years from now and long beyond. And quite frankly, I don't care about watching closely year after year to see if Pechanga gives $9 billion or not. It's their right to expand their business just as any good business would do to meet the demand of the people. And again, PA-LEEZ enough with the legalization of drugs and/or prostitution because of those lousy Indians. Seriously.
to wow wrote on Feb 12, 2008 5:36 PM:Your side has gotten plenty of ink in the NC Times and certainly in this blog space. I don't think I would ever post here if I didn't see so many lies and mistatements from your side that need to be corrected. Your apparent distain and dislike of Pechanga has been clearly stated too. MOVE ON.
wow wrote on Feb 12, 2008 5:58 PM:NOT GOING ANYWHERE, THE REZ IS OUR HOME. DEAL WITH IT. WHAT I SPEAK IS WHAT YOU TRY TO HIDE FROM THE PUBLIC(corruption). THE TRUTH YOU DON'T LIKE YOU CALL LIES. I "KNOW" I would never post here if I didn't see so many lies and mistatements from your side,PECHANGA PROPAGANDA. You fooled the people of CA. again, now go enjoy your fat per-diem check at the expense of many true Native Americans. I am praying for all of you at Pechanga. There is love for many Pechanga's.
to wow wrote on Feb 12, 2008 7:23 PM:You have me mistaken for someone else. The lies I speak of have to do with the election and the NO on the propositions side not with whatever you're talking about.
WOW wrote on Feb 12, 2008 8:03 PM:Just as I expected. Go enjoy your new slots & party it up at your favorite party place Pechanga. What I am talking about is the ongoing corruption & civil rights violations at Pechanga. Because of these actions the Tribe is hard to trust & even harder to believe. I stand by my statements. It seems to me that you may be the misenformed one on the propositions. I have been involved in Pechanga issues for over 40 years, I do know what I speak of. Too bad that the young seem unaware of history & all the information on the propositions,not just Pechanga's spin. This all seems mute as the Greedy Pechanga's won, but thanks for the opportunity to speak freely on this current topic.
PA-LEEZ wrote on Feb 13, 2008 8:38 AM:I sure had you pegged wrong. You were just a 10 year old Little Leaguer when I came to pre-casino Temecula. OK, so let's analyze who is narrow and skewed. The 3 primary vices are gambling, prostitution, and drugs. You speak of the wonderful virtues of the local gambling den of iniquity, yet you protest the idea of allowing the other two vices. Like you, millions of people could achieve personal satisfaction and entertainment with the other two, and like the casinos, the revenues generated would help the budget. I prefer none, but if you allow one, why not the other? I'm just curious why people seem to think one is fine just because they happen to personally like it, and get bent out of shape when the same justification is used to defend the others.
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