The state of California asked for too much in exchange for allowing an American Indian tribe expand its slot machine count at its North San Diego County casino, a federal judge ruled in late April.
The Rincon Band of Luise & #324;o Indians, which owns a casino-resort operated by Harrah’s Entertainment Inc., wants to expand the number of slot machines from 1,600 to 2,500.
Yet negotiations between Rincon and Gov. Arnold Schwarzenegger’s office have gone on for years without producing a deal acceptable to the tribe.
Negotiators from the governor’s office have wanted the tribe to pay tens of millions of dollars annually into the state general fund in exchange for expanded gambling.
Court documents say that in October 2006, the state asked for $37.9 million annually for the general fund in exchange for letting Rincon operate 900 extra machines. At the same time, the documents noted, the tribe would make $1.7 million from those extra 900 machines.
By that point in the negotiations, Rincon and the governor’s office were 28 months into litigation. Rincon sued Gov. Schwarzenegger and other state officials in June 2004 in U.S. District Court in San Diego alleging, among other things, breach of the entities’ tribal-state agreement (called a compact).
On April 29, U.S. Magistrate Judge William McCurine Jr. ruled that the state negotiated with Rincon in bad faith when it insisted the casino share its revenue with the state general fund.
McCurine wrote that money from American Indian gaming can go to limited purposes spelled out by the 1988 Indian Gaming Regulatory Act, known also as IGRA. (The federal act also defines “bad faith” in negotiations.)
In addition, McCurine wrote that California, in its dealings with Rincon, was essentially trying to levy a tax on another government entity , something which it may not do. Under the law, American Indian nations are considered sovereign governments.
The judge gave the state and the Rincon band 60 days to negotiate a new compact. If the parties can’t reach terms, he said he would appoint a mediator
A governor’s spokesman said May 7 that the state plans to appeal McCurine’s decision, and that during the appeal it will ask the court to stay the judge’s 60-day order. No stay had been issued as of May 7.
“We continue to maintain we negotiated in good faith,” said Schwarzenegger press secretary Aaron McLear. “We believe the court is wrong. We will appeal.”
The Rincon tribal council cheered the judge’s April 29 decision, said Vice Chairman Bo Mazzetti, adding that tribal leaders look forward to the next 60 days of negotiation.
“The level of taxation that the state demanded would have amounted to 79 percent of the profits generated under the agreement,” said Mazzetti. “That’s not fair.”