Today, we continue with the third part of our guest series on the development of Indian casino gaming in California, by Jim Marino.  (This series originally ran in the Santa Ynez Valley Journal.)

Sometimes it seems as though the issue of gaming is an unspoken controversy that advocates of the Akaka Bill are desperately trying to avoid.  As though the fact that it is not allowed under the current version of the bill is a sufficient guarantee forevermore.  But, as today’s installment demonstrates, a state can move from no casino gaming of any kind to a flood of Indian casinos in a surprisingly short time–and with little to no real input from the public.  Those who are concerned about Akaka being the path to Hawaiian casino culture would do well to take note of California’s experience. . .

RESULTS OF I.G.R.A AND THE PASSAGE OF PROPOSITION 1A AND THE FLOOD OF INDIAN GAMBLING CASINOS IN CALIFORNIA
Santa Ynez Valley Journal
By Jim Marino, Guest Columnist
April 29, 2010

(Part 3)

The first week I discussed what led up to the enactment of the IGRA. Last week I wrote about all of the antiquated, ambiguous and contradictory aspects of federal Indian law and policy in existence, when the ill-advised Indian Gaming and Regulatory Act [IGRA] was enacted by Congress, in a feeble attempt to provide an economy for Indian tribes.

As you may recall from last week, the controversial Indian gambling law was enacted by Congress without even considering the impact the existing body of federal Indian law and policy would have. This resulted in the authorization of tax free, lawless and unregulated casino gambling by Indian tribes and related businesses in which patrons, workers and the nearby communities are, in effect, deprived of all their legal and Constitutional rights and cannot sue for injuries or damages occurring in those casinos and businesses. I also wrote of how that Act has also enabled these tiny often questionable tribes to make hundreds of millions in profits, while still collecting federal welfare and grant monies that are monies needed by real Indians still living on remote reservations and living in conditions of abject poverty.

This week’s article deals with how Indian gambling was legalized in California and some of the impacts of the IGRA and the Indian casinos it spawned in California, has had on nearby non-Indian communities.

To give Congress the benefit of the doubt, Congress created the only method that States had available to them in order to control and regulate Indian casino gambling under the IGRA. That mechanism was the requirement that prior to engaging in Class III gambling casinos the tribe and state government would have to enter into a compact (or contract). They did this by including section 2710 d.(3) in Title 25. Under that provision, Indian tribes seeking to engage in class III casino gambling were required to negotiate and have the affected state approve, a compact. If the state lawfully approved a compact, then it was lawfully in effect according to State law.

Following the enactment of the IGRA in 1988 many bands of Indians in California, some with only one or two members, began operating class II Bingo games with unlimited money pay-offs. The Santa Ynez Chumash built a cinderblock building as a “Bingo casino” funded at least in part by the Las Vegas singer Wayne Newton and other Las Vegas gambling investors and apparently did so under questionable circumstances. It soon closed down amongst rumors and controversy, but with a view toward reopening in the future.

Class II “Bingo” gaming under the IGRA does not require a tribal-state compact, only a license from the National Indian Gaming Commission [NIGC] and is in effect unsupervised gaming beyond licensing and annual audits. Before the Supreme Court struck down the provision in the IGRA, giving the tribes the right to sue the state when they claimed the State was not negotiating in good faith, California tribes threatened the State with several suits if the State did not negotiate compacts for full-scale Class III casino gambling. The California Constitution Art. 4, Section 19, prohibited full-scale casino gambling including slot machines, blackjack, craps, roulette and so forth.

Because slot machines generally make up 85 percent of the revenue any casino brings in, the tribes were threatening lawsuit if the State would not negotiate for slot machines and banked card games like blackjack. (Remember the Cabazon case discussion earlier. The State had the absolute right to refuse to allow all forms of gambling by any Indian tribe, as long as those types of games were also prohibited for everyone else in the state to operate.) Slot machines had been illegal in California for years and use, possession or transport was a violation of the California Penal Code.

One lawsuit brought by Indian tribes in the 1990s claimed the lotto terminals the State had licensed to bars and cocktail lounges all over the state were, in effect, state run “slot machines.” Therefore, the tribes claimed they had a right to install slot machines in their casinos. The court denied that assertion but was highly critical of the definition of “slot machines” set out in the California Penal Code. As a result, the state pulled all these machines from bars all over the state and stored them in a warehouse, where I believe they still sit today.

Many tribes like the Santa Ynez Chumash simply ignored the law prohibiting slot machines and the requirement of a tribal-state compact in 25 USC 2710 d (3) requiring such a compact before Class III gambling could be allowed. Then one night in 1995, the Chumash moved more than 600 slot machines into the cinderblock former Bingo casino and began illegally offering slot machines to the public and position player backed blackjack games. The installation of these slot machines also constituted a violation of the Johnson Act, a federal law prohibiting the unlawful transportation, use, procurement and possession of slot machines. After all, the delaying litigation was exhausted in 1997. The State Attorney General and federal authorities including the F.B.I. informed the illegal casino tribes like the Santa Ynez Chumash that they intended to raid them, seize the slot machines, all monies and other illegal fruits of the illegal gambling operations and even arrest the operators. The tribes then launched a public initiative-drive entitled Proposition 5 in 1998.

Proposition 5 was an initiative to amend the California Government Code to allow Indian tribes to operate slot machines on Indian lands in California. Besides sponsoring that initiative the tribes, many of whom were operating illegal casinos with slot machines at the time, like the Santa Ynez Chumash, pumped millions of dollars into an advertising campaign to depict pictures of poverty-stricken Indian tribes self-sufficient.

In addition to this advertising campaign, these casino Indians pumped millions into the campaign coffers of Grey Davis, a career politician who was running for Governor in 1998. In November 1998, Proposition 5 was approved by the voters and Grey Davis was elected Governor. Commencing in 1999, Gov. Davis began negotiating gambling compacts with California Indian tribes, all of which was done behind closed doors. None of the traditional power groups in California such as local governments, taxpayers groups, law enforcement organizations, environmental groups, trial lawyers, workers compensation and consumer lawyer groups, women’s rights groups, union and others were allowed the opportunity to participate in the discussions and influence the terms of these tribal-state class III gambling compacts.

As a result, the compacts Gov. Davis agreed to were weak, giveaway compacts with many provisions so poorly written that they were virtually unenforceable. These compacts provided no revenue at all to the state and made no provisions to mitigate the significant negative impacts the flood of Indian casinos that resulted would have, and subsequently did have, on local communities.

In the meantime, Proposition 5 was challenged in a lawsuit and in August 1999 the California Supreme Court ruled that Proposition 5 was unconstitutional because it only amended the Government Code not the State Constitution, which contained the prohibition on casino gambling like slot machines and house banked card games in Art. 4, sec. 19.

Undaunted by the Supreme Court’s striking down Proposition 5, Gov. Davis executed some 59 of these giveaway tribal state compacts and then had the State Legislature approve them in September and October 1998. He made no effort to determine if the tribes he was negotiating with, and granted gambling compacts to, were lawfully created Indian tribes or if the land on which their casinos or proposed casinos were to be sited were legally “Indian Lands” eligible class for III gambling under federal law. In fact, many of these questionable Indian tribes were on land or acquired land that was clearly not eligible to build and operate any class II or class III gambling casinos under the IGRA.

To remedy the fact that these compacts were executed and approved when there was no longer any legal authority to do so, the Legislature put a “Legislative initiative” on the ballot for March 2000 the following year at Gov. Davis’ behest, some 6 months after they were executed and approved. That initiative, called Proposition 1A, by its language proposed to amend the California State Constitution Art. 4, sec. 19, to authorize the Governor to negotiate future compacts with California Indian tribes. The voters were never informed that a vote in favor of Proposition 1A would, in effect, retroactively ratify the 59-weak giveaway, virtually unenforceable compacts that Gov. Davis has already signed without legal authority and which were approved at his instance by the State’s Legislature. It is not coincidence that so many State legislators also received hundreds of thousands of dollars in campaign contributions from these casino tribes, often funneled throu gh campaign committees and PAC’s with unassuming names. My favorite was the one calling itself “The California Native Peace Officers Association.” That PAC was funded by $5,000,000 million entirely from the Pechanga Indian Casino and the State Correctional Officers Union and was distributed to key politicians in Sacramento. The use of PACs is one of the ways politicians use to disguise receipt of gambling monies by disguising them through innocent-sounding groups. Once legalized in 2000 by Proposition 1A, the onslaught of Indian casinos in California began.

NEXT TIME: PART 4, THE EXPANSION OF “INDIAN CASINO GAMBLING IN CALIFORNIA AFTER PASSAGE OF PROPOSITION 1A AND THE NEGATIVE IMPACTS ON LOCAL GOVERNMENTS AND COMMUNITIES.”