Davis offers tribes increased gaming - with major strings attached

Brendan Riley

Wednesday, Sept. 1, 1999 | 8:55 a.m.

SACRAMENTO - Indian tribal leaders objected Tuesday to key elements of Gov. Gray Davis' plan to allow expanded Indian gambling in California and insisted on changes as negotiations continued behind closed doors.

Davis offered a plan that could more than double the number of slot machines. But tribes would have to agree to share 25 percent of their gross profits with other tribes, as well as allow labor union activity in the gambling halls.

After the plan was presented early Tuesday to about 300 people representing 64 California tribes, Davis was urged to revise it. But late in the day, Davis spokesman Michael Bustamante said the governor's negotiators weren't budging.

Another round of talks was scheduled Wednesday, and one top tribal spokesman made it clear something must give.

"After today, it was such a shock that we feel compelled to move forward with our initiative," said Richard Milanovich, tribal chairman of the Agua Caliente Band of Cahuilla Indians.

The initiative is another version of Proposition 5, the statute change approved by voters last year but knocked down last week by the state Supreme Court as unconstitutional. Tribes have been collecting signatures to qualify another initiative that essentially duplicates Prop 5 but amends the constitution to exempt tribes from the state ban on Nevada-style gambling.

The Davis administration wants the Indians' latest ballot plan scrapped and in its place favors a legislative plan that also revises the constitution but would include the provisions opposed by many of the tribes.

That legislative proposal would have to be approved by lawmakers before they adjourn late next week. Voters would have final say in March. Absent an agreement, the tribes expect to submit signatures next week qualifying their amendment for that same ballot.

While Milanovich said only part of the Davis plan is acceptable, Mark Macarro of the Pechanga Band of Luiseno Indians held out hope for an agreement before the Legislature adjourns.

"We're still talking," he said. "It's a long stretch before we get to any sleep here.

"There's a sense that all the possible ingredients for a deal are near at hand."

Critics of the 25 percent clause argued that when gross is reduced to net profit - by making payrolls, paying utility bills and covering other costs - the Indian casinos would be sharing 40 to 60 percent of their net.

Proposition 5 included a profit-sharing measure the required gambling tribes to deposit 2 percent of their net winnings from gambling terminals into a fund for non-gambling tribes.

The labor activity provision, while not specific, suggests that casino employees would have to be given collective bargaining rights. Some tribal representatives consider this an unwarranted intrusion into Indian casino management. The Hotel Employees and Restaurant Employees union fought Proposition 5 and filed one of two lawsuits challenging it in state court.

The tribes' counterproposal was submitted to Davis' negotiating team, led by William Norris, the governor's special counsel for Indian gambling and a former federal judge.

Norris presented the Davis plan to about 300 people representing 64 of California's 107 tribes. Emerging from the closed-door session, he declined to comment.

Under the Davis plan, tribes now operating about 15,000 slot machines - and non-gambling tribes that want to jump into the lucrative business - could add as many as 15,000 machines.

The plan also would allow for Nevada-style games, in addition to slots, but with a compact limiting future casino expansion.

Under a 1988 federal law, Congress set up a framework for tribal-state regulation of gambling as a way to pump up economies on Indian reservations.

Former Gov. Pete Wilson negotiated compacts with 11 Indian tribes, and sought to limit the number of slot machines to just under 20,000. Proposition 5 had no curbs on the number of slot machines.

Davis would allow the tribes with the 15,000 existing machines to expand that number to nearly 20,000. Non-gambling tribes could operate as many as 350 machines each, going up to almost 500 machines after five years.

If 20 non-gambling tribes sought machines, that could boost the numbers by another 10,000, for a total of 15,000 new machines.