Tribes Reject State MIC’s – Litigation Likely

Up until a couple years ago the National Indian Gaming Commission enforced guidelines on gaming tribes that covered cash handling and counting, audits, surveillance and the games – from technical standards to how often decks of cards should be changed.

That all ended in the 2006 federal court decision which concluded that the national gaming commission did not have the authority to regulate the Indian casinos.

This became a major sticking point last year for Assembly Democrats during a long deadlock in which they refused to ratify the amended compacts for five big Southern California gaming tribes.

The Tribes and the governor then were opposed to renegotiating the compacts to address this issue and instead looked for a possible proposal by the California Gambling Control Commission to substitute state oversight for the lost Federal oversight.

After over a year of negotiations, the issue appears to be headed for court.

At stake would be whether the state can set a benchmark for internal casino security as well as whether and under what conditions it could unilaterally impose regulations on the industry.

In the eight years since California citizens voted to legalize Indian casinos, this issue has seemed to be slowly heating up and now it’s finally reached its boiling point.

Dean Shelton, chairman of the California Gambling Control Commission told tribes at a hearing late last month that, like it or not, the state will establish and begin enforcing minimum security standards in tribal casinos. Many tribes, whose gaming commissions spend millions each year on security, believe the state does not have that authority.

“Turn us down if you wish. Take us to court,” Shelton said. “I'm not threatening you. I'm being honest with you.”

“If he wants to run headfirst into litigation, that's fine. He'll lose,” said Scott Crowell, an attorney for the Rincon band in North County.

Last year, during the heated battle in the legislature over the amended compacts, the gambling commission began drafting a state regulation that would have replaced the federal regulations.

In the last year there have been seven sessions between tribal and state representatives to try and come to some agreement that all can be happy with and the proposed regulation has been revised and rewritten several times.

The state accepted some changes sought by tribes but refused to bend on two major requests: binding arbitration to resolve disputes and a sunset clause that would exempt tribes that signed agreements with the National Indian Gaming Commission to comply with its federal guidelines.

When a final version of the state regulation went before the gambling commission for adoption late last month, representatives of 16 tribes testified – all in opposition. No tribes have endorsed it yet, state officials said.

“This is not negotiation. This turned out to be dictation,” said Michael Lombardi, a tribal gaming consultant involved in the process. “The tribes are going to reject the regulation.”

The tribes are pretty unanimous on this issue and claim that any such agreement to new regulations and rules should come from the result of amendments the gambling compacts and not just an across the board enforcement by the state.

But Shelton and the governor's attorneys say existing compacts give the state clear authority to set a minimum threshold for casino security. Tribes would have broad discretion on how they choose to comply.

It should be noted the most tribes, and state officials agree, already use and enforce the old NIGC regulations.

But Shelton said, “There are tribes out there . . . who don't have MICS and haven't adopted them.”

In a recent twist, State Attorney General, Jerry Brown, who would represent the state gambling commission, in litigation, has voted, symbolically he says, with the tribes.

Brown said he was merely attempting to foster a compromise to avoid litigation.

“I didn't think an all-out war with all the tribes made any sense,” Brown said in an interview. “That vote, it is symbolic. It doesn't stop the commission or help them.”
If necessary, Brown said he expects to defend the commission and its regulation if it does end up in court.

The commission has stated that if it is headed for court they will assess whether the attorney general's office can represent them at that time. It is possible that they could hire a private firm to represent them.

Sources:
http://www.signonsandiego.com/uniontrib/20080428/news_1n28casinos.html
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/09/16/EDDH12V1F4.DTL
http://www.signonsandiego.com/news/state/20080915-9999-1n15casinos.html