Could hurt plans by governor to close budget gap
A Senate bill could hurt California’s attempts to use money from Indian casinos to fill its budget gap.
Sen. Ben Nighthorse Campbell, R-Colo., is pushing a measure that would limit or prohibit agreements that require tribes to share gambling revenues with states.
Campbell, the Senate’s only Indian member, said the original intent of the Indian Gaming Regulatory Act of 1988 was to help pull tribes out of poverty.
“Now we find when states have budget deficits, they look to tribes to bail them out,” he said at an Indian Affairs Committee hearing Wednesday.
California and other states want to renegotiate those agreements in hopes of getting more revenues from Indian casinos.
Gov. Arnold Schwarz-enegger wrote a letter to the committee Tuesday criticizing the bill. Schwarzenegger wants to renegotiate and sign new tribal agreements that he hopes could bring in as much as $500 million from tribal casinos.
“The sole purpose of this amendment appears to be to limit the ability of the state to ensure its fair share of the revenue generated by the tribes’ gaming operations,” he wrote. “You face my strong opposition to this measure.”
Twenty-four states have signed gambling compacts with tribes, according to Judy Zelio, a gambling analyst at the National Conference of State Legislatures. Seven — Arizona, California, Connecticut, Michigan, New Mexico, New York and Wisconsin — get some portion of the casino profits, she said.
The bill has yet to pass the Senate committee. It then must clear further Senate votes, as well as approval by the House and the president before becoming law.
Legally, states cannot tax Indian casinos, said George Skibine, a Bureau of Indian Affairs official. But they can negotiate a revenue-sharing deal in exchange for offering tribes exclusive rights to gambling in geographic regions, he said.
States have been negotiating increasingly higher revenues from tribal casinos recently, he said. Some contracts require revenue sharing as high as 20 percent.
His agency wants Congress to set specific limits on how much states can charge tribal casinos. When pressed, Skibine said the agency would like to cap revenue sharing at 10 percent.
Tribes want Congress to stop states from trying to use Indian casinos to pay off state budget deficits.
“Some state governors are attempting to hold Indian tribes hostage in the compacting process in order to unfairly squeeze revenues from … tribal gaming operations,” said Ernest Stevens Jr., chairman of the National Indian Gaming Association. “Indian tribes use gaming just as state governments use lotteries — to rebuild community and government infrastructure and provide essential services for their citizens.”