State looking for compensation from tribes for casino operations

Arthur H. Roststein

Tuesday, Sept. 19, 2000 | 9:02 a.m.

TUCSON, Ariz. - A proposal by Gov. Jane Hull that would have Arizona's Indian tribes pay the state 7 percent of their gambling profits under new compacts "may overstate any potential 'negative impacts,"' tribal gambling officials say.

The Arizona Indian Gaming Association responded to Hull's proposal by letter Friday following a week of talks with her negotiators. Current tribal compacts begin expiring in 2003 and both sides have been negotiating since January in efforts to strike new deals early.

Hull spokeswoman Francie Noyes said the tribes had verbally offered to discuss giving the state money.

But they show signs of resisting a proposal that would have them give the state 7 percent for a community benefit fund doled out by an appointed panel of state and tribal representatives.

Hull said the proposed revenue split would offset expenses related to Indian gaming, such as local and state road, bridge or lighting improvements in areas where casinos have created more traffic. Money also would be used to help repay costs incurred when American Indians living off-reservation cannot pay non-reservation hospital bills.

Noyes said the 7 percent contribution amounted to "a talking point." "None of it is cast in concrete," she said.

The association said the tribes agree to Hull's proposal of a 10-year compact term - with an automatic 10-year renewal.

The association represented all but one of its 17 member tribes during the gambling summit. The Colorado River Indian Tribes, based in Parker, withdrew, rejecting the talks "as a sham."

Tribal chairman Daniel Eddy Jr. said a week ago his tribe intended to negotiate a compact renewal on an individual and sovereign basis. Each tribe's needs are different, he said, calling Hull's request for 7 percent of net gambling profits an illegal tax.

"The fact that the state has the temerity to expect to receive proceeds from any Indian enterprise is galling," Eddy said. "It appears the state expects the tribes to pay for the privilege of existing."

Last month, Hull sent the association a letter proposing exclusivity, among other things - offering to give up the Arizona Lottery's right to use video terminals in exchange for some compensation for lost lottery revenues.

Her proposal also spelled out stiffer regulations, and suggested swapping the tribes' rights to offer poker for blackjack instead, subject to betting limits. The tribes have proposed $250 betting limits on blackjack.

Hull also offered to adjust upward the number of video gambling machines per tribe - now up to 1,400, according to population - and per casino. In exchange, she wants an agreement not to build more casinos and to stay within the current authorized total of 14,175 machines statewide.

The tribes said they agreed to no immediate increases in total authorized gambling machines.

Hull said parity should be preserved between tribes, with limits on the number of devices per tribe and casino. Tribes would be allowed to transfer their video gambling rights to other tribes for fair compensation. The tribes also agreed to that concept, and said they have offered to reduce significantly the number of authorized gambling facilities - now 41.

Seventeen tribes have compacts, with 15 now operating 19 casinos and a 20th under construction. There are 7,362 video gambling machines in operation.