9th Circuit Court Rejects Gov's Request - New Slot Licenses to be Distributed Monday

Yesterday the 9th U.S. Circuit Court of Appeals rejected a request by Gov. Arnold Schwarzenegger to hold off issuing new slot licenses until his appeal of an August ruling is heard. The result is that new slot licenses, up to 10,549 statewide, will be distributed by the California Gambling Control Commission on Monday.

The court said it would bump up the appeal date to February, which is much sooner than normal. A Schwarzenegger spokesman said that they are confident that the court will see things their way at that time.

In their decision to allow the new slots, the court rejected a claim by state lawyers that the additional machines would cause irreparable problems such as increased traffic and crime.

Tribes will have to pay $1,250 for each slot license they get.

The San Pasqual Indian band, which operates Valley View Casino in Valley Center, will stand to receive 478 new slots to max out at 2000. Stephen Warren Solomon, a lawyer for the San Pasqual Indian band stated, “We'll put them in use as soon as possible. We're building a hotel, and we're ready to go.”

Harrah's Rincon will add 400 slots to the 1,600 it operates to reach the 2000 max limit as dictated by terms of their compact with the state.

These compacts were struck in 1999 by then-Gov. Gray Davis and required tribes to pay into a pair of funds for tribes with small or no casinos or for community impacts, and to hold good-faith negotiations with local governments.

Compacts negotiated after Schwarzenegger took office called for much bigger payments directly to the state's general fund. They also required deals with local governments.

Cheryl Schmit of Stand Up for California commenting on the addition of more slots to the tribes with the 1999 compacts said, “This is not good. There's no renegotiation to protect local government or surrounding communities. Each machine adds to traffic and crime in surrounding areas. The state loses, the citizens lose, and the tribe gains a financial benefit.”

Others say that due to the recession, casinos are actually cutting down on the number of machines they are using. Since the ruling it is estimated that only about half of the 10,549 licenses have been requested.