GAMBLINGCOMPLIANCE: US Congress Takes Aim At California Tribal Casinos

4TH MAY 2016 | WRITTEN BY: CHRIS SIEROTY

A federal bill challenging the ability of the North Fork Rancheria of Mono Indians to build a casino on property the tribe has in federal trust in central California is being called “a shameful attempt at the 11th hour to stop competition,” according to the tribe’s chairwoman.

House Bill 5079, sponsored by California Republican Rep. Doug LaMalfa, says that “certain off-reservation” tribal casinos defeated in a state referendum or not approved by the state legislature cannot be approved by the federal government.

The bill, known as the California Compact Protection Act, amends the Indian Gaming Regulatory Act (IGRA) “to require that, in California, certain off-reservation gaming proposals shall be subject to the full ratification and referendum process established by California state law.”

The legislative effort to curtail tribal casino growth has also been supported by at least one of California’s two senators.

Senator Dianne Feinstein, a Democrat, has caught tribal leaders off guard in the past by introducing legislation to stop what she calls “reservation shopping.”

As of Tuesday, the senator was said to be considering her options when it comes to introducing new legislation in an election year.

LaMalfa’s bill targets the planned North Fork casino project and the Enterprise Rancheria casino in Yuba County, which is about 55 miles north of Sacramento, California.

The bill was co-sponsored by Republican Rep. Raul Ruiz, and Democrats Reps. Jeff Denham, Paul Cook and Jared Huffman. All lawmakers represent districts in California.

Kevin Eastman, LaMalfa’s legislative director, did not respond to requests for comment on Tuesday. He told Law360 on Friday that the legislation was in reaction to two recent federal court decisions.

In February, a federal judge in California ordered the state to negotiate a new gaming compact with the Enterprise Rancheria, while another federal court judge in November ordered California to reach a gaming compact with the North Fork.

In their rulings, both judges found the state had failed to negotiate in good faith.

“Despite its name, the bill has nothing to do with protecting compacts or tribes,” said Maryann McGovern, chairwoman of the North Fork Rancheria of Mono Indians.

“It is simply an attempt to establish two classes of tribes in California – rich tribes that have long enjoyed the benefits of gaming using their wealth to stop landless tribes from ever participating in casino gaming,” said Maryann McGovern, chairwoman of the North Fork Rancheria of Mono Indians.

McGovern told GamblingCompliance the tribe has worked for more than a decade to comply with every requirement of federal law. She also described the bill as a “jobs killer” that undermines the tribe’s long-term partnership with Madera County.

The Madera casino compact was the subject of a ballot proposition in 2014 — Proposition 48 — through which 61 percent of voters decided to overturn the tribe’s compact. The North Fork project had been supported by Governor Jerry Brown and the state legislature.

Meanwhile, the Enterprise Rancheria compact was supported by the governor but never taken up by the state legislature.  Glenda Nelson, tribal chairwoman, was unavailable for comment.

Under federal law, the tribes can still seek approval from the federal government whether or not the state approves.

Both projects are under consideration by the U.S. Department of the Interior.

McGovern said LaMalfa’s bill opens up the IGRA in a manner that could seriously affect not only tribal gaming but also tribal rights and sovereignty. IGRA was approved by Congress in 1988 to regulate gaming on tribal lands.

But not everyone believes HB 5079 will do serious damage to California’s lucrative tribal gaming market, or to sovereignty rights of tribes.

“Stand Up (California) is supportive of any legislation that protects the will of the voters of California and ensures that the tribal state compact process treats all tribes equally and fairly,” Cheryl Schmit, director of Stand Up California told GamblingCompliance.

Schmit said it was important to note that Section 20 of IGRA, which provides the exemptions for gaming on “after-acquired” lands, does not have a legislative history.

“There was never a committee hearing and never a debate on the exception or development of definitions for the exceptions,” she said. “Certainly this section of IGRA should be amended so that it resembles a balance between tribes, states and the federal levels of government.”

The North Fork tribe and partner Red Rock Resorts, formerly Station Casinos, want to build a casino-resort with 2,000 slot machines, 40 table games and a hotel on 305 acres along Highway 99 just north of the city of Madera.

The casino site is 36 miles from the rancheria’s traditional reservation and some 240 miles north of Los Angeles.

Enterprise Rancheria broke ground on its 140,000 square foot Yuba county casino last month. The $170m first phase of construction will include the casino, restaurants, bars and conference rooms.

The casino is scheduled to open in about a year as a Class II gaming facility with bingo, electronic games and non-banked (no house) card games. A compact would allow for Class III Las Vegas-style gambling.

The Enterprise Rancheria went to mediation on Monday with state officials after failing to negotiate a gaming compact within 60 days of the court’s ruling. Both sides will report back on July 1.

One other off-reservation casino has been approved in California, but the tribe has yet to begin construction. The Fort Mojave Indian Tribe near Needles, California, some 256 miles northeast of Los Angeles, received approval in November 2008 for a casino about three miles from Needles.

Tribal gaming is big business in California, with gaming revenues having increased 4.4 percent in fiscal 2014 to $7.29bn, up from $6.99bn in FY2013, according to the latest revenue figures by the National Indian Gaming Commission.

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