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Pala gaming deal with state near at hand
Landmark compact stirs controversy among tribes

James P. Sweeney and Chet Barfield
COPLEY NEWS SERVICE | STAFF WRITER

08-Feb-1998 Sunday

Gov. Pete Wilson and leaders of a small San Diego County tribe are completing a landmark agreement that for the first time would define the scope and volume of American Indian gambling to be allowed in California.

The compact negotiated by the Pala Band of Mission Indians could be announced within days, or at most a few weeks, sources close to the talks say. But it is not expected to end a bitter, 10-year standoff over what is legal in more than 30 tribal casinos already scattered around the state.

Instead, it could transform the simmering stalemate into a high-stakes political donnybrook.

The Pala compact was to be a prototype for the state, but it has split California's more than 100 tribes. Many of those with casinos fear it will cripple them financially.

Bracing for war, tribal attorneys last week filed an initiative that would legalize the lucrative games that Wilson and the courts contend are illegal.

The compact, however, figures to give Wilson the political high ground while turning up the pressure on federal prosecutors to move against tribes that continue to offer legally suspect games. That could include Viejas, Sycuan and Barona, all of whom operate successful casinos in San Diego County.

The negotiations have dragged on for 15 months in unusually strict secrecy. Reliable sources say the emerging document is comprehensive -- more than 140 pages at last count -- and clearly designed to serve as a model for the state, if not the nation.

"It will be historic," one source predicted. "It will be the most comprehensive compact ever signed in the nation and it will also be the most progressive."

A share of the wealth

For the first time, all of California's more than 100 tribes -- not just those with gambling operations -- would be guaranteed a share of the wealth.

The compact would impose caps on the number of video gambling devices permitted statewide and then divide that pool equally among all California tribes, sources said. Tribes that are too remote or have no desire to build a casino could lease their allotments to others.

There also would be a limit on the number of machines that any single tribe or casino may operate.

One source said caps under negotiation ranged from 20,000 to 25,000 video terminals statewide and 750 to 1,000 per tribe. The statewide figures would provide an allotment of 150 to 200 machines per tribe. Those figures, however, could not be confirmed.

Elsewhere, Pala -- a nearly 12,000-acre reservation north of Escondido -- has agreed to abide by certain state environmental, planning and labor standards, sources said. Tribes historically have argued their sovereign status exempts them from all such state or local regulation.

The video game sanctioned by the agreement is a "lottery device" technically already legal in the state, sources say.

A 1988 federal law that set the broad parameters for Indian gaming restricts tribes to those games already allowed in a state. But California tribes imported video slot machines that Wilson, Attorney General Dan Lungren and a series of court rulings have declared illegal.

The video game Wilson has approved may not be as fast or as profitable as the video slots that generate more than 80 percent of the profits at many existing casinos.

The game would be connected to a central computer that runs multiple lotteries simultaneously, sources said. Players could join any one of the ongoing games.

"There are so many lottery games going on at one time to which your terminal is connected that it will look and feel a lot like a traditional video slot machine," a source said. "You're able to join the games so frequently and because there are so many . . . there is the instantaneous quality to it."

It's unclear whether any such games exist yet, although at least one tribal attorney said they are in development.

"There were two games being negotiated," said John Winkelman, an attorney for Viejas. "One game people saw and hated. . . . It was commercially unviable. Now there's a second device, more like a lottery device, that nobody's seen, at least nobody I know of.

"They've got some engineering people working on it, and I understand they're very competent. But the bottom line is the state is requiring the tribes to design a new device that does not exist in the marketplace today."

Federal response?

Regardless, the Pala compact could prompt federal authorities to force gaming tribes to adhere to its edicts. Absent federal action, Pala and any other tribe that installs the new machines would be at a competitive disadvantage against neighboring tribes that continue to offer conventional video slots.

Only U.S. Attorney Nora Manella in Los Angeles has taken the gaming tribes to court. U.S. Attorney Alan Bersin in San Diego and his counterparts in San Francisco and Sacramento have been awaiting the outcome of the Pala negotiations.

But a federal official said representatives of Bersin's office and the U.S. attorneys from San Francisco and Sacramento met recently with Wilson's staff.

"We understand the Pala negotiations are wrapping up and we are expecting to hear about a compact in the next week or so," the federal official said. "There was a meeting . . . to discuss what is going to happen next.

"In essence . . . there is sort of an unwritten agreement that once Pala is finalized, the other tribes are going to be given an opportunity to sign on. If they do, fine. If not, the U.S. attorneys are going to pursue legal action against them."

Bersin announced in September that he would take no further action against San Diego-area tribes until the Pala compact was done and the state provided a framework to get other tribes to the bargaining table. Bersin was unavailable for comment late last week.

Legal fight looming

The swarm of attorneys, lobbyists and political consultants monitoring the Pala negotiations expect another legal fight before any compact is ratified.

Last year, pressure from gaming tribes forced state lawmakers to strip from a gaming regulatory bill language that expressly authorized the governor to execute an Indian gaming compact.

While it is questionable whether the governor needed that authority, the gaming tribes wanted to preserve the legal window through which they could challenge the compact in court.

Such litigation, however, could hinge on what appears to be the final sticking point in the arduous negotiations -- how much latitude the governor will give gaming tribes to convert to the terms of the Pala compact.

The target of a recent tribal advertising blitz, Wilson has steadfastly refused to negotiate with tribes he says are operating illegal games.

Late last week, Pala tribal Chairman Robert Smith said intense negotiations were still under way. He said he expects an agreement within a few weeks.

While the Pala tribal council is authorized to negotiate a compact for the 835-member tribe, a final document would have to be approved by the general membership, Smith said. No meeting for that purpose has been set.

Viejas tribal Chairman Anthony Pico, a high-profile advocate for California's gaming tribes, said the widespread ramifications of the Pala compact are uncertain.

"All we've ever heard is that the thing isn't any good," he said. "But we don't know."

Expressing an overriding objection to the process, Pico said Pala has no right to negotiate concessions for other tribes.

"How could you take one compact and say this sets the standard for the rest of the state?" he asked. "(Wilson) is dealing with Pala. He's not dealing with Viejas. We're not even at the table."

Pico said he is unfamiliar with the lottery-style device under consideration, but has heard it would be far less profitable than the video games it would replace.

"What's good for Pala may bankrupt Viejas," he said. "We have a significant capital investment, 1,600 employees and capital projects we've already underwritten."

Clashes among tribes

Attorney George Forman, who represents several tribes including San Diego's Sycuan band, said any system requiring tribes to pool or barter a finite number of machines will cause a host of problems.

"Our `free-market' governor would create an artificial shortage of a commodity, and then pit one tribe against another to scramble for this commodity," he said.

"It creates enormous potential for the very kinds of things that tribes have worked so hard to keep out of the tribal gaming industry, namely the possibility of corruption. It creates . . . potential internal divisions within the tribes as well as between the tribes."

But Forman said the larger problem is that "a model is being negotiated to which the other tribes are having zero input and getting no feedback.

"The state of California would not blindly accept something the state of Colorado negotiated," he added. "Tribes are sovereign, and they're perfectly happy to have Pala make a deal that Pala is happy with. . . . But don't make it a straitjacket for all the others."


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