New Mexico panel makes final recommendation for gambling agreement

Deborah Baker

Wednesday, March 8, 2000 | 9:16 a.m.

SANTA FE - A legislative committee has made its final recommendation for new gambling compacts: 18-year agreements with a revenue sharing rate starting at 8.5 percent and eventually dropping to 7.5 percent.

The proposal now goes to Gov. Gary Johnson and Indian tribes. They could agree to the changes the lawmakers made or refuse them.

Either way, the final version of the proposal heads to the Legislature for an up-or-down vote - perhaps during a special session that Johnson is expected to call soon.

"My intention is to get this thing to the floor (of the Legislature)," said Rep. Jerry Sandel, D-Farmington, chairman of the Committee on Compacts.

Once the committee gets a response from the governor and the tribes, it has 30 days to meet. But Sandel said he will call a meeting quickly, perhaps the day before a special session would start.

Some lawmakers want to know how much revenue they could count on from new compacts as they write a budget for next year, their biggest job in a special session.

Under the proposal approved Tuesday, tribes that owe the state money would have to make full back payments before they could sign new compacts.

Those payments would be at the rate of 16 percent of slot machine proceeds. That rate is required under existing compacts signed in 1997, but the tribes say it's illegally high and most are not paying it; they are pushing for new compacts with a lower rate.

The newest proposal requires tribes to pay 8.5 percent of their slot machine proceeds until they comply with certain requirements for state oversight - making sure their casinos' computerized reporting systems can be read by the state, for example, and providing financial and audit statements.

Sandel estimated a tribe could comply within a year; at that point, the revenue sharing rate would decrease to 8 percent. The 8 percent would remain in effect until June 30, 2012; then it would drop to 7.5 percent until the compact expired on June 30, 2018.

Tribes had wanted a maximum 7.5 percent revenue sharing rate and 22-year compacts. But Sandel said he hoped they would give serious consideration to the latest proposal.

At least one committee member said 18 years is too long, and some legislators might vote against new compacts on that basis.

"I just don't see being able to sell something like this," objected Rep. Larry Larranaga, R-Albuquerque. "It's going to give a lot of us cold feet."

The committee agreed on a provision that says if a tribe doesn't pay revenue sharing or the required regulatory fees - $100,000 a year for each tribe, with 5 percent increases annually - it would have to shut down its casino after 30 days unless arbitration was invoked.

The committee also agreed that a casino's revenue sharing obligation would end if a new race track was permitted within 75 miles of the casino, or if slot machines were allowed anywhere within 75 miles except at veterans' or fraternal clubs.

Reversing its earlier position, the committee decided that the closed Santa Fe Downs, owned by Pojoaque Pueblo, should not be considered a new track if it were to reopen - and therefore wouldn't jeopardize revenue sharing from casinos within 75 miles.

The tribe is trying to sell the track, and a lawyer from Santa Fe told the committee he is trying to put together a group of horse owners and breeders and other investors to buy it.

Ray Besing, a horse owner who consults on telecommunications issues, said the group should be ready to approach Pojoaque Pueblo in a couple of weeks.

Besing said it didn't appear that a Nevada company, Star Entertainment Group, was aggressively pursuing its earlier-announced plan to buy the Santa Fe track.

"It's a shame from an economic standpoint" to let the track remain idle, Besing said.