New Mexico committee approves latest offer for new gambling compact

Deborah Baker

Tuesday, Feb. 8, 2000 | 9:42 a.m.

SANTA FE, N.M. - A new version of proposed Indian gambling compacts would slash future casino revenue-sharing payments tribes would owe New Mexico by nearly half - if the tribes paid up the millions of dollars they owed under the old compacts.

And it would penalize one tribe that dropped out of the compact negotiations.

The Legislature's Committee on Campacts approved the compact proposal Monday and sent it to Gov. Gary Johnson and to the tribes for their consideration. The panel inserted the proposal to restrict Pojoaque Pueblo after that tribe's withdrawal.

Negotiators are trying to come up with a new compact that lawmakers can vote on before the Feb. 17 adjournment.

Most of the 11 tribes with casinos want to sign new compacts to replace agreements they signed in 1997, which require them to pay the state 16 percent of slot-machine proceeds. The tribes contend that rate is illegally high and most are not paying it.

The new proposal includes a revenue-sharing rate of 8.5 percent of slot proceeds and requires tribes in arrears to pay up in full before they could sign up. If all tribes paid the arrears, the state would receive $67 million.

As for Pojoaque, the committee inserted a provision Monday to deter the state Racing Commission from allowing the Downs at Santa Fe to reopen. The racetrack is owned by Pojoaque, which is negotiating to sell it to a Nevada company. Star Entertainment Group would then reopen the track with slot machines.

But under the provision approved Monday, if the closed track were licensed, that would end the obligation of Indian casinos within 75 miles - including the big money-makers near Santa Fe and Albuquerque - to pay the state any slot-machine revenue.

The Racing Commission likely would not license a track if that gutted casino payments to the state, the lawmakers theorized.

Racing Commission chairman Billy Blackburn, reached for comment, said commissioners want no part of the tribal compact fray. He didn't rule out licensing the track, declining to predict what commissioners would do, but agreed licensing would be a longshot.

"I know that it would personally weigh heavily upon each racing commissioner's conscience as to whether or not to grant a license to a racetrack if the final decision would be tied into decreasing revenues to the state," he said, but added: "Giving a license to a racetrack ... should be based upon on what's in the best interest of horse racing in New Mexico and not based upon what's in the best interest of taxable revenues."

Pojoaque recently announced it no longer supported efforts to design new compacts. Tribal Gov. Jacob Viarrial said the terms under consideration were unacceptable, and the tribe "can no longer trust the state."

"They've elected not to participate in the process, and I'm not sure they should be a beneficiary of this process," said Sen. John Arthur Smith, D-Deming, vice-chairman of the Committee on Compacts.

Some committee members said the racetrack penalty would make it tougher for Gov. Johnson and the tribes to agree with the latest offer.

Sen. Billy McKibben, R-Hobbs, objected because the compact proposes a better deal to tribes than state law requires of racetracks and veteran or fraternal clubs with slot machines.

"We've cut their (tribes') obligation in half. The others are still at 25 percent," McKibben said, criticizing "the inequity of it."

The new agreement also requires tribes to pay annual regulatory fees of $100,000 apiece, which would increase by 5 percent a year, replacing the current fee schedule of $25,000 a year per casino, $1,200 per slot machine and $3,000 per table.

The new compacts would run until June 30, 2018, unless the state requested a renegotiation in 2013.

Supporters hope new compacts will resolve the longstanding dispute between the state and the tribes over casino payments. Attorney General Patricia Madrid has said if the dispute is not settled during this legislative session, she will take the tribes to federal court to force them to pay.