Future of Arizona gaming rests with appeals court

David Kravets

Tuesday, July 9, 2002 | 9:44 a.m.

SAN FRANCISCO -- The future of legalized gambling in Arizona is as uncertain as a roll of the dice.

But there's probably one safe bet: The uncertainty will flourish for some time in a limbo-like state that will be resolved in court instead of the ballot box or statehouse.

Arizona's ever-expanding complexity of Indian gaming and dog- and horse-race wagering took center stage Monday before a federal appeals court, which is weighing whether Gov. Jane Hull had the authority to negotiate 10-year gaming compacts with 16 Arizona tribes.

Also in the mix are three competing voter initiatives that may appear on the November ballot. Supporters submitted their proposals to the secretary of state last week and said they expect them to go before voters.

The gambling controversy began last year, when a federal judge said Hull did not have power under the Arizona Constitution to sign gambling accords with the tribes in the Legislature's absence.

U.S. District Judge Robert Broomfield nullified the agreements that called for more slot machines, allowed Las Vegas-style blackjack and gave the state a cut of the take. The current compacts expire next year and, unless the courts reinstate them, the tribes are out of luck and must shutter the bulk of their gaming action.

But during 50 minutes of oral arguments, a three-judge panel of the 9th U.S. Circuit Court of Appeals suggested the Arizona Supreme Court should decide whether Hull exercised too much power to negotiate Indian gaming compacts. Federal appeals courts often remove cases before them and ask the supreme court in a state to decide an issue.

Judge Pamela Rymer suggested that the panel was "uncomfortable in resolving an issue of state constitutional law." Judge William Bertelsman agreed: "You've got a highly political issue here. Don't you think the federal court should refer to the state court in this?"

Broomfield, in a lawsuit brought by the racing industry, which is fearful of competing with expanded Indian gaming, argued that Hull exercised too much power in formulating the Indian agreements without the guidance of the Legislature.

Under Hull's proposal, the tribes would be restricted to gaming on reservation lands, maintain the state limit of 14,675 slot machines but would be allowed to offer Las Vegas-style blackjack and some poker games.

Attorneys representing the state and the racing industry urged the 9th Circuit to resolve the matter. They said the issue couldn't be decided by the Arizona Supreme Court before the gaming compacts expire in February.

A host of tribes, meanwhile, have urged the court to let the negotiated compacts become law.

"The loss of gambling revenues would be catastrophic to the nation," said David Frank, attorney general for the Tohono O'odom Nation. In briefs to the court, Frank said 100 percent of the tribe's 2.7 million-acre reservation's fire department is funded through casinos.

Scott Bales, Hull's attorney, told the court that gambling "offers the only opportunity for economic productivity and self-sufficiency" on reservations.

Judge William Canby Jr. asked racing industry attorney Neil Wake what happens to the case if some or all of the proposed ballot initiatives are approved by voters.

"There will surely be litigation," he said.

Judge Rymer scolded Wake, saying "that's not an answer."

Wake replied: "They may not go into effect even if they pass."

One ballot proposal, backed by a host of tribes, is nearly identical to the compacts Hull agreed to and would give the state 8 percent of profits. A second initiative, backed by the Colorado River Indian Tribe, would allow a wider range of table games, such as craps and roulette, and grant the state 3 percent of profits.

The final initiative, sponsored by the state's horse and dog tracks, would allow slot machines at race tracks and give the state 40 percent of the take. The measure also would require tribal casinos to give 8 percent of gaming profits to the state.

The court did not indicate when it would rule.