Another Step Toward New Compacts in California

Late last week, the California state Senate approved the new compacts for five tribes. (We discussed the politically fraught nature of those discussions in our April 9th post.) The compacts now will go before the Assembly, where labor unions and the horse-racing industry will continue to lobby for deals that protect their interests.

As one analyst put it, any result will "make somebody mad. The question [for state legislators] is, which very powerful well-monied, extremely influential interest are you willing to take on?" Whose interests will win out? We'll keep you posted.

Read more on the deal here. For more info on California's state legislative process, click here.

Stevens Re-Elected as NIGA Chair

Ernie Stevens, Jr., will serve a fourth two-year term as the chairman of the National Indian Gaming Association.

With close to 200 member tribes and numerous gaming industry affiliates, NIGA serves as a lobbying group for tribes and tribal interests, particularly at the federal level. It also collects and disseminates information about Indian gaming and serves as a fulcrum for intertribal communication.

Kathryn’s Quoted in the Miami Herald

Kathryn provided background and commentary on tribal-state revenue sharing in the April 8th edition of the Miami Herald. Click here to read the article.

Gaming is lucrative in Florida –- in excess of $1 billion –- and includes casino-style games at racinos in Broward County as well as tribal gaming by the Seminole Tribe. The Seminoles believe they’re entitled to operate Class III games given what’s otherwise allowed under state public policy. The state in the past has contended otherwise.

Recently elected Gov. Charlie Crist seems willing to provide the tribe some form of concessions, but perhaps only in return for diverting a cut of tribal gaming revenue to the state treasury. Given what’s currently happening in California, Kathryn may indeed be correct that revenue sharing is on the table pretty much in every state where there’s Indian gaming.

Charitable and Civic Contributions in Minnesota

The Shakopee Mdewakanton Dakota Community reports it gave over $18 million to charitable and civic organizations in fiscal year 2006. The tribe made contributions to other tribes, education and youth programs, and various charities.

"As Dakota people, we have a long tradition of sharing with others so it is important for us to give back to the larger community. Before Indian gaming, our community had dirt roads and many of us lived in poverty and struggled to survive. . . . Now we are able to help others," said tribal Chairman Stanley R. Crooks.

Various forms of charitable and/or civic contributions are fairly common, if under the radar, for tribes across the U.S. The Indian Gaming Regulatory Act lists charitable contributions as one of several specified uses for gaming revenue by tribal governments. The National Indian Gaming Association reported in 2005 that tribes had donated approximately $100 million across the U.S. in the prior year.

Will There Be a Major Gaming Expansion in California?

California lawmakers return from spring recess and on Tuesday will begin to consider a major expansion of casino-style gaming through proposed compacts that could change the political and economic fortunes of many throughout the state.

The compacts, if approved, would triple the number of slot machines from 10,000 to 32,500 for the Agua Caliente Band of Cahuilla Indians, the Morongo Band of Mission Indians, the Pechanga Band of Luiseno Indians, the San Manuel Band of Mission Indians, and the Sycuan Band of the Kumeyaay Nation.

At stake are the political fortunes of Gov. Arnold Schwarzenegger, who struck the compact deals with five highly successful southern California tribes, Democratic and Republican state legislators whose constituents have strong preferences one way or the other on the proposed compacts, and tribes throughout the state who have tethered lobbying efforts and political contributions to the compacts’ success.

Also at stake are the economic fortunes of the state, expected to take in as much as $500 million annually in revenue sharing – what Schwarzenegger has long-called its “fair share” of gaming profits, localities in which hundreds or even thousands of new jobs would be generated for non-tribal members and, of course, the gaming tribes and their members.

Of concern to some is that the proposed compacts don’t require an independent audit of tribal books, account for a potential regulatory hole created by an October 2006 federal appeals court’s decision that the National Indian Gaming Commission lacked regulatory authority over most casino-style gaming, or provide protections similar to those in several 2004 compacts negotiated by Schwarzenegger for workers attempting to unionize.

This is going to be an intriguing case study of how influential state politics can be in setting the terms of tribal gaming – and how willing tribes are to give in return for get.

Click here for April 8th L.A. Times coverage.

Good Faith Compact Negotiations in South Dakota?

South Dakota's unwillingness to negotiate additional slot machines in tribal casinos has been challenged in federal court as violating the state's duty to negotiate in good faith under IGRA.

The Flandreau Santee Sioux Tribe, which owns the Royal River Casino and Hotel, filed a lawsuit in federal court accusing Governor Mike Rounds of bad faith for his refusal to consider additional slot machines at Royal River.

According to this recent article in Indian Country Today, commercial casinos in Deadwood operate more than 3,000 slot machines while tribal casinos, operated by eight tribes in the state, have 2,000 gaming devices. Additionally, there are more than 8,000 video lottery machines in small commercial casinos across the state. Indian Country Today reports that during a Western governors' conference held two years ago, "Rounds allegedly told the other governors that as long as the state had video lottery with millions of dollars in revenue, the tribes would not be allowed to have more slot machines."

Lobbying: It’s All Relative, Isn’t It?

In the last year, USA Today reports here on March 31, the gaming industry lobbied Congress to the tune of $25 million. The American Gaming Association, which represents commercial casino interests, spent $900,000. With friends in high places, the AGA’s president, Frank Fahrenkopf Jr., expects the industry to have success in the coming year. Senate Majority Leader Harry Reid, R-NV, has been a long-time supporter of commercial gaming (for obvious reasons); House Rep. Charles Rangel, D-N.Y., chairs the House Ways and Means Committee, and Rep. John Conyers, D-Mich., heads up the House Judiciary Committee. Opponents of a 2006 ban on Internet gaming are lining up to see it reversed.

Yet it’s telling that Fahrenkopf’s group feels unfairly tarred by the Jack Abramoff scandal. "Even though we didn't have anything to do with it, we all tend to get labeled," he said.

The Indian gaming industry, of course, has taken the real heat from Abramoff’s transgressions vis-à-vis a small number of tribes. Although Abramoff bilked them out of millions of dollars, tribes – not the commercial industry – have been scrutinized for their attempts to lobby and influence the political process.

Tribal gaming interests have pulled back in the wake of the Abramoff scandal, as evidenced by a significant drop in spending on lobbyists. In the last year, tribes lobbied at the federal level to the tune of $16 million –- a 25% drop over the prior year.

We predicted this outcome in our July 2006 article in the Gaming Law Review. We discuss that and more in “The ‘Tribal Loophole’: Federal Campaign Finance Law and Tribal Political Participation After Jack Abramoff,” Gaming Law Review 10 (2006): 230-39.