BIA Says Judges Ruling Against California Reflects BIA Policy

Paula Hart, director of the BIA's Office of Indian Gaming Management, which reviews tribal-state gambling agreements, or compacts, testified yesterday that a federal judge's ruling that California cannot demand more gaming revenue in exchange for allowing San Diego County's Rincon band to expand its casino reflects a long-standing policy of the Bureau of Indian Affairs.

“Whenever we see a revenue-sharing provision in a tribal-state compact, it sends up a red flag,” said Hart.

Although The Bureau of Indian Affairs has not formally weighed in on the litigation, its endorsement of the April 29 ruling appears to add significant new weight to Rincon's case and could make it more difficult for California to negotiate lucrative new Indian gaming deals.

Federal law bars states from imposing “a tax, fee, charge or other assessment upon an Indian tribe” to engage in Nevada-style gambling, Hart told the Senate Governmental Organization Committee.

The key word in that passage is “impose,” Hart said. With that in mind, she said the BIA looks for “meaningful and significant concessions” from a state in exchange for gaming revenues for purposes other than regulatory costs.

In the Rincon case, the tribe sued the state nearly four years ago when negotiations broke down on a compact amendment that would have allowed Rincon to expand from 1,600to as many as 2,500 slot machines at its North County casino. The 650-member tribe refused to pay a larger percentage of revenue, up to 15 percent of the net win on the added slot machines that the governor sought.

U.S. Magistrate Judge William McCurine Jr. ruled that “the state's fee demands constitute an improper attempt to impose a tax on Rincon.”

Hart yesterday said the judge's reasoning could have been lifted from an advisory the BIA sent some time ago to Oklahoma tribes.

“When I compared the two, it looked like the court had looked at our letter,” she said.

Nearly 60 compacts that the state negotiated in 1999, including Rincon's existing agreement, provided a significant concession in the exclusive right to offer conventional slot machines and Nevada-style, house-banked card games. Voters later embedded the tribal monopoly in the state constitution.

The state's offer of a modified form of that exclusivity, additional slots and an extension on the length of Rincon's compact did not warrant the amount of revenue sought for the state's general fund, Judge McCurine ruled.

“We believe we negotiated in good faith and offered meaningful concessions to the tribe,” said Aaron McLear, the governor's press secretary. “We stand by our negotiations.”

The judge has put a temporary hold on his order that the tribe and state try to negotiate a change to the gambling pact. The governor's attorneys are asking him to make it permanent.

But Rincon's attorneys say the tribe will be hurt financially if they can't add slot machines while an appeals court rules on the case.

On Monday, the lawyers asked the judge to order the state to put up a $101.3 million bond if it is not ordered into negotiations.

They figure adding 900 machines to the 1,600 the tribe now operates would net an additional $38 million a year, and the appeals process could take nearly three years. The governor's lawyers haven't responded to that motion.

Full Article:
http://www.signonsandiego.com/uniontrib/20080611/news_1n11gamble.html