Davis, Tribes OK Accords to Allow More Gambling

SACRAMENTO —  In an extraordinary ceremony after days of roller-coaster talks, Gov. Gray Davis and 57 Indian leaders signed accords Friday to significantly expand gambling operations on reservations and allow them to include Nevada-style slot machines and card games.

At the same time, lawmakers approved with little dissent a proposed state constitutional amendment that would help implement the compacts by affirming Indians’ right to operate casinos legally on tribal land. That right was contained in Proposition 5, passed by voters last fall, but the state Supreme Court struck the measure down last month.

Davis said the compact “honors my commitment to allow for a modest expansion of gaming” in California.

“It balances the interests of the Indian people and the other people of this great state,” he said. “And for those tribes that adopt it, this compact offers security and economic promise.”

For the deal to take effect, voters will have to approve the amendment, which will appear on the March ballot. Odds are considered good that the measure will pass.

Davis and most of the Legislature say they will support it. And Indians proved their ability to finance a campaign when they spent a record-shattering $63 million and won landslide passage of Proposition 5. The proposition set no limits on casino expansion.

Friday’s agreement produced 20-year compacts with each tribe granting them exclusive rights to operate Nevada-type gambling houses in California. It provides for state regulatory oversight, aimed at ensuring that the casinos are not infiltrated by criminals.

The accord allows individual tribes to own two casinos and to expand until they have a total of 2,000 slot machines, about the number of slots in most large casinos on the Las Vegas Strip. The gambling tribes will pay about $100 million a year in state taxes.

Any California tribe that doesn’t open casinos will nonetheless be allowed to share in the profits, with individual non-gambling tribes receiving $1.1 million a year. There are about 105 recognized tribes in California, 40 of which have casinos. The 105 tribes have about 32,000 members.

“For too long,” Davis said, “California’s Indians have been denied the respect and dignity they deserve. That sad chapter in our history ends today.”

With one major exception--the Agua Caliente band of Palm Springs--California’s largest gambling tribes and most of those with small casinos agreed to the deal early Friday morning after 18 days of often fractious negotiations with the Davis administration and key lawmakers.

Then, more than 50 tribal leaders filed into the governor’s conference room. One by one, they and the governor affixed their names to individual compacts.

The deal came as U.S. law enforcement authorities maintained their threat to shut down Indian casinos unless the tribes signed compacts with the state to legalize their operations.

The deadline is in mid-October--and Davis predicted that the U.S. Justice Department will take legal action against tribes that have casinos but no compacts.

“This is a proud day,” said Anthony Pico, chairman of the Viejas band in San Diego County. The compacts, he said, “will finally allow California Indian tribes to achieve the self-reliance that we have long been seeking.”

However, the leader of the Agua Caliente band was pressing ahead with plans to put an initiative on the March ballot. The proposition would, in effect, compete against the ballot item Davis advocates.

Unlike Davis’ measure, the Agua Caliente initiative is similar to Proposition 5 and would grant tribes almost unlimited rights to expand their casinos and operate them as they see fit.

Agua Caliente Chairman Richard Milanovich plans to make a final decision Monday, after he briefs his full tribe, on whether to proceed with his ballot measure. He called the deal offered by Davis “an intrusion on free enterprise.”

“We live in America,” he said. “We believe in free enterprise.”

The Agua Caliente band has 1,150 slot machines at its Palm Springs casino and plans to build a 105,000-square-foot facility.

Predicting that gambling will grow in California, Milanovich said: “We need to ensure ourselves the broadest flexibility.”

Although Friday’s deal would permit such card games as blackjack, the talks focused on the number of slot machines to be allowed.

The reason: They generate the most money. Industry experts say that on average each slot machine produces $100 to $300 a day for the casinos. A 2,000-machine casino could generate $73 million to $219 million a year from slots alone.

Altogether, the deal would permit California’s Indians to own and operate about 45,000 slot machines. That’s about a fourth of the number now in Nevada. Still, it represents a significant jump for California, which for most of its modern history has sought to limit gambling.

Spokesmen for the Indians say the 40 tribes that now have casinos own 23,500 machines--up from last year’s estimate of roughly 15,000.

About 65 recognized tribes in California have no casinos. Under Friday’s deal, each of those would start out with the right to operate 350 machines--or about 23,000 if all tribes exercise their option. Any slot machine rights they do not use could be sold to other tribes.

Davis’ compact is richer for the tribes than what his Republican predecessor, Pete Wilson, offered last year. Under Wilson’s proposal, California tribes could have had no more than 19,000 machines total, and no single tribe could have had more than 975.

“Holy cow,” Rod Blonien, a lobbyist for non-Indian gambling interests, said of the new deal.

He said that expansion of tribal casinos will force some card clubs out of business and that it further threatens racetracks, which have been struggling for years as other types of gambling have increased in California.

“This will cement that disparity into place and multiply it,” he said.

When lawmakers return in January, Blonien and other lobbyists for gambling interests intend to press for legislation granting card clubs parity with Indian casinos.

“We don’t begrudge the Indians what they are getting,” Blonien said. “But we think we should be able to have what they have, to some degree.”

A remaining issue involves unions’ desire to organize workers at Indian casinos. Indians had viewed the unions’ demands--including the right to gain access to their property and the right to strike--as violations of tribes’ rights as sovereign nations.

But late Friday, Jack Gribbon of the Hotel Employees and Restaurant Employees International union, said an accord had been reached.

“It’s finished. It’s done,” he said, adding that it represents the first time Indians have made significant compromises with labor.

Gribbon estimates that the Indian casinos have 15,000 workers. But during the 20 years that the compacts will be in place, he said, that figure could reach 50,000, roughly the number that the union represents in Las Vegas.

“We would hope that all Indian tribes across the country would take notice of this,” Gribbon said.

In the Legislature, the proposed constitutional amendment was embraced almost unanimously, passing the Senate 35 to 0 and the Assembly 71 to 3.

Key parts of the legislation were fashioned by Senate President Pro Tem John Burton (D-San Francisco). But all the legislative leaders, Republican and Democrat, were involved.

Indians have become a major force in California politics, as their casinos have grown and they have shown a willingness to spread campaign money around.

In addition to the $63 million they spent on Proposition 5, the tribes pumped almost $10 million into other state races last year, making them the single largest source of campaign money in 1998.

At least half a dozen Assembly members--most of them facing tough races next year--stood to laud the deal. One spoke against it.

“Let’s not mislead the public--this is an expansion of gambling,” said Assemblyman Bruce Thompson (R-Fallbrook). “California will never be the same. Our crime will increase. Families will be destroyed.”

Responding to Thompson, Assemblywoman Sarah Reyes (D-Fresno) called casinos a “necessary evil” that preserves Indian sovereignty. “You mentioned the bad side of gambling. But you didn’t mention the good side of what Indian gaming has done for that nation. It has allowed them to be able to build senior centers. It has allowed them to build child care centers.”