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Schwarzenegger seeks revenues from gaming tribes
Wednesday, January 7, 2004

Declaring "respect" for tribal sovereignty, California Gov. Arnold Schwarzenegger (R) on Tuesday said he would appoint a negotiator to seek a greater share of Indian gaming revenues.

During his first State of the State speech, the actor repeated a familiar theme of his controversial campaign, in which he shunned tribes as special interests and attacked rivals for accepting tribal donations. He said the state deserves its "fair share" of the money made at more than 50 tribal casinos.

"I respect the sovereignty of our Native American tribes and I believe they also respect the economic situation that California faces," Schwarzenegger said.

Beyond those words, Schwarzenegger offered no concrete plan for working with tribes. He only said he would name the negotiator in the coming days.

But his aides have pointed to Connecticut as a model. Under compacts negotiated nearly a decade ago, two tribes with casinos share 25 percent of their slot machine revenues with the state. Last year alone, the deal netted the state upwards of $400 million.

Facing a budget shortfall of $15 billion, Schwarzenegger isn't the only state official turning to Indian gaming for help. Nationwide, a total of seven states have some sort of revenue-sharing arrangement with tribes, although none as lucrative as Connecticut's.

In California, a new compact could change that landscape. Tribes there brought in an estimated $5 billion last year, helping propel the Indian gaming nationwide to a $14.5 billion industry.

The numbers, though, are sketchy -- before he was removed from office during the recall, former Gov. Gray Davis (D) said tribes could contribute up to $1.5 billion to the state. He later revised the figure to $680 million before apologizing to tribes for even suggesting to renegotiate the compacts.

During the recall campaign, tribes were offended by their portrayal as special interests and were critical of ads that portrayed their governments as tax dodgers. But they are willing to work with Schwarzenegger, according to the head of an influential inter-tribal organization.

"California's Indian gaming tribes are eager to meet with the negotiator to be appointed by the governor so that we can discuss gaming issues," said Anthony Miranda, chairman of the California Nations Indian Gaming Association (CNIGA).

Miranda said he agreed with Schwarzenegger's emphasis on jobs, pointing out that California tribes have created 42,000 new jobs. "Indian gaming has been the only job sector to grow in dramatic fashion," he said.

"Jobs add revenues to the state budget. Jobs give stability to our society. Jobs. Jobs. Jobs. The more jobs the better," Schwarzenegger said during his speech.

If the timeline sticks, Schwarzenegger will have named a negotiator in time for CNIGA's 9th annual Western Indian Gaming Conference. More than 1,000 tribal leaders, gaming executives, and federal and state officials are expected to attend the event, which is being held next week in Palm Springs. CNIGA, which represents 59 tribes with and without casinos, will hold is annual membership meeting on Friday following the conclusion of the conference.

Under 20-year compacts approved by the Clinton administration in 2000, California tribes contribute about $140 million to the state. Before leaving office, Davis negotiated agreements with some tribes that require 5 percent revenue-sharing rate. Some tribes also make hefty contributions to local governments for law enforcement, traffic, fire, safety and other impacts.

The compacts impose a 2,000 slot machine limit per tribe. Schwarzenegger has said that "everything is on the table" when it comes to gaming, indicating that he would consider lifting the restriction.

Relevant Documents:
State of the State Address (January 6, 2004)

Relevant Links:
California Nations Indian Gaming Association - http://www.cniga.com
Gov. Arnold Schwarzenegger - http://www.governor.ca.gov/state/govsite/gov_homepage.jsp

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