Schwarzenegger Signs Tribal Gaming Agreement

By: Associated Press
By: Associated Press

Gov. Arnold Schwarzenegger signed new Indian gambling compacts with representatives of five California tribes Monday in a deal that’s estimated to bring in at least $1 billion for the current budget and annual payments afterward of at least $250 million a year.

The new deal also allows the tribes to increase their casinos’ number of slot machines beyond the current 2,000-per-tribe cap. Those extra machines are expected to help pay the $1 billion this year and the annual payments until 2030.

To pay the money to the state, the tribes will sell bonds that will generate the $1 billion and then the annual payments for 18 years, until the bonds are paid off. Then the tribes will make direct payments to the state until the end of the compact period.

The agreement also allows Schwarzenegger to fulfill a campaign promise to have tribes pay a greater share of their income to the state.

Schwarzenegger’s budget plan incorporates the higher fees from tribes with casinos, and administration officials have said much of the money will go to repay money borrowed from the transportation trust fund.

The tribes are the Pala Band of Mission Indians, the Rumsey Band of Wintun Indians, the United Auburn Indian Community, the Viejas Band of Kumeyaay Indians and the Pauma Band of Mission Indians.

Under the new deal, they’ll get to add thousands of new slot machines to their casinos. The last compact, signed by then-Gov. Gray Davis in 1999, limited tribes to 2,000 slot machines.

Schwarzenegger hopes to have new agreements with as many as a dozen Indian tribes, but not all are receptive to the reworked deals.

The Rincon Indian Tribe in San Diego County sued earlier this month to block Schwarzenegger from reworking the compacts. The tribe said the new deal would cost them millions if the caps are lifted for some tribes, but not others.

Another tribe, the Aqua Caliente Band of Cahuilla Indians, has sponsored a ballot initiative that would expand Indian gaming in return for tribes paying the state 8.8 percent of their net income.

Schwarzenegger is seeking more than that, and opposes that initiative and another ballot measure that seeks to tax tribes 25 percent and could allow card rooms and racetracks to operate slot machines.

The other would tax tribes 25 percent, but also could allow racetracks and card rooms operate slot machines.


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