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Legislators Scrutinize Gaming Deals

Legislators Scrutinize Gaming Deals

Rincon Tribe Sues to Stop Pacts Signed By Three Local Tribes

BY BRAD GRAVES

Deals that would expand the number of slot machines at five California casinos , including those at the Viejas, Pauma, and Pala reservations , were up for scrutiny at the state Capitol last week.

Lawmakers split their time between evaluating the gaming compacts recently inked by the Schwarzenegger administration, and weighing the complexities of the new state budget. Neither job was finished by midday July 1, as this newspaper was going to press.

Leaders of the three San Diego County tribes, plus two Northern California bands, cut new deals with Gov. Arnold Schwarzenegger. The tribes promised to pay off a $1 billion bond issue benefiting the state, plus send the state a fixed amount of slot machine revenue every year. In return, the state promised to lift the ceiling of 2,000 slot machines per tribe.

The deals, which address a variety of other matters, need approval from the Legislature and the U.S. Department of Interior.

Meanwhile last week, attorneys for San Diego County’s Rincon tribe filed papers in U.S. District Court, asking a judge for a temporary restraining order to bar the five tribes’ compacts from taking effect.

A hearing was set for July 2.

The Rincon tribe, which is limited to 2,000 slot machines, said the state has not negotiated fairly with them, and that expansion at neighboring casinos will hurt its business. Harrah’s operates the hotel and casino on the Rincon reservation.

“These new gaming compacts will create a number of mega-casinos that could put smaller tribes like Rincon out of business and force many of our tribal members back on public assistance,” said tribal chairman John Currier in a prepared statement. Currier was unavailable for comment.

Rincon leaders commissioned a study saying aggressive casino expansions in northern San Diego County and southern Riverside County could cut Rincon’s gross gaming revenue by 38 percent.

The study said Rincon’s annual gross gaming revenue of $185 million would fall to $114 million if the Pala, Pauma, and Pechanga casinos were to get more slot machines. The three latter casinos are closer to Interstate 15 than Harrah’s Rincon.

Rincon’s contractor, Business Research & Economic Advisors of Exton, Pa., said the Valley View Casino would take a similar hit from the anticipated expansions. The San Pasqual band runs Valley View, which is a few miles south of Harrah’s Rincon.

In all, San Diego County has nine tribes that run casinos. Deutsche Bank estimated that in 2003, San Diego County had 14,200 slot machines and 350 table games at its Indian casinos, bringing in revenue of $1.64 billion.

The six San Diego County tribes that are not a part of the Schwarzenegger compact are taking different approaches to the situation. For example:

– The Sycuan band is asking Schwarzenegger to begin negotiating with it and four other tribes on a compact that would lift the 2,000-slot limit, but have different provisions.

“We don’t want the same compact thrust on us,” said Sycuan spokesman Adam Day.

Day said the tribes brought the proposal to the governor in early May. “We have yet to hear a substantive response from the governor,” he said.

The deal promises the state $1 billion, “immediate and in full, without the delays and uncertainties surrounding a bond issue,” said a statement issued by Maurice Lyons, chairman of Morongo Band of Mission Indians in Riverside County.

Vince Sollitto, a spokesman for Gov. Schwarzenegger, said the compacts negotiated with Pala, Pauma, and Viejas came together after months of “intense negotiation,” and provide protections for both Indian tribes and the state. The proposed Morongo/Sycuan compacts do not provide similar protections, he said.

If Sycuan were given permission to go above 2,000 machines, it would grow slowly, Day said.

– The Barona band, which has 2,000 machines and a resort near Lakeside, will stick with the compact it has, said spokesman David Baron.

Baron noted the new deals had only been public a week. “We have not seen how it’s going to work,” he said.

– The Rincon band has sued Schwarzenegger, Attorney General William Lockyer, and the State of California over the compacts now before the Legislature.

At several points the lawsuit says the state did not negotiate fairly with Rincon. It finds fault with both Schwarzenegger and his predecessor, Gray Davis.

Sollitto countered that the state has met with Rincon representatives and has negotiated in good faith.

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