Schwarzenegger, tribes still at odds over gambling deals

Chris T. Nguyen

Friday, Nov. 5, 2004 | 9:23 a.m.

LOS ANGELES -- Gov. Arnold Schwarzenegger may have beaten back ballot measures aimed at expanding gambling in California, but he hasn't succeeded in striking deals with a majority of casino-owning Indian tribes to share revenue.

After the divisive election, the governor and tribes remain in a standoff, with neither side willing to be the first to head to the bargaining table.

The tribes are still bitter over Schwarzenegger's campaign remarks that they were "ripping off" the state. Their demand for an apology has gone unanswered.

"Let them come to me and negotiate," Schwarzenegger said soon after the election, predicting tribes will eventually want to work out a deal.

Some tribes, however, said they don't need to bargain.

Deron Marquez, chairman of the San Manuel Band of Mission Indians, said his tribe is content with operating 2,000 slot machines -- the maximum allowed under current law.

"We can stay with the current compacts or we can wait for the governor to leave office," Marquez said. "We certainly have the leverage. The governor, if he wants to negotiate, he has to come to us. He needs us."

I. Nelson Rose, a law professor at Whittier College and expert on gambling, said tribes have the upper hand because of the ironclad casino agreements granted by former Gov. Gray Davis.

"I think Schwarzenegger was able to win the hand and he has a little stack of chips," Rose said about Tuesday's election. "But Davis gave tribes a pile of chips and unbreakable compacts. So they'll just wait it out."

Schwarzenegger, struggling to pay off California's nearly $8 billion deficit, struck deals with 10 tribes earlier this year requiring them to pay the state as much as 25 percent of their gambling revenue in exchange for operating more slot machines.

The deals were expected to bring the state hundreds of millions of dollars a year.

The two ballot measures defeated Tuesday could have doubled that amount, but Schwarzenegger feared California could turn into another Nevada.

Proposition 70 would have allowed tribes to operate an unlimited number of slot machines along with offering roulette and craps -- games that are currently banned in California. The measure was defeated by 76 percent of voters.

Proposition 68 would have let card clubs and racetracks in six counties operate a total of 30,000 slot machines. It was opposed by 84 percent of voters.

Combined spending by opponents and supporters of the measures exceeded $100 million. But in the end, the initiatives couldn't stand up to the popularity of Schwarzenegger.

On Wednesday, the governor said he was close to new gambling deals with five more tribes. Still, he has yet to reach agreements with a majority of the state's 53 casino-owning tribes.

The main dispute has been over relinquishing control.

Schwarzenegger wants tougher environmental protections, authority to audit casinos, and participation by communities in how casinos are developed. Those requirements are contained in deals already reached with 10 tribes.

Tribes contend those demands would undermine their sovereignty rights granted by the federal government.

The conflict caused some tribes, including San Manuel and the Pechanga Band of Luiseno Mission Indians, to break off negotiations with the state.

Pechanga and a few others had offered the state hundreds of millions of dollars a year, plus a one-time payment of several billion dollars, but the state refused, said Pechanga Chairman Mark Macarro.

"The insistence on relinquishing jurisdiction, that's something we won't do," he said. "We don't trade ... sovereignty for money. That's a line we won't cross."

State Sen. Tom McClintock, R-Thousand Oaks, a staunch advocate of tribal sovereignty, said revenue from the existing deals won't do much to help the state budget.

"I don't believe the state has the moral right to claim Indian money from Indian lands," said McClintock, who ran against Schwarzenegger in last year's recall election.

Professor Alfred Balitzer of Claremont McKenna College said Schwarzenegger and tribes have to respect each other before they can reach deals.

"It's going to be messy for a while. It's going to be a quagmire," he said.