Court decision strikes at revenue-sharing in casino deals

A ruling from the 9th Circuit Court of Appeals contained some harsh language for states trying to seek a share of tribal gaming revenues.

The ruling said California Gov. Arnold Schwarzenegger (R) negotiated in bad faith with the Rincon Band of Luiseno Indians. He demanded a big chunk of casino revenues without making a meaningful concession, the court determined.

"It is one thing to ask the tribes to contribute funds so the state is not left bearing the costs for gaming-related expenses; it is quite another to ask the tribes to help fix the state’s budget crisis," Judge Milan Smith Jr., a George W. Bush nominee, wrote for the majority.

The Indian Gaming Regulatory Act does not directly speak to the issue of revenue sharing. But it suggests that tribes might be asked to "defray the costs" of regulating gaming and might have to share revenues "comparable to amounts assessed by the state for comparable activities."

The BIA has approved Class III gaming compacts with revenue-sharing rates as high as 25 percent of slot machine revenues. The BIA tries to determine whether the state has guaranteed some form of exclusivity to the tribe or has made other concessions.

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Rincon Decision A Dangerous Victory For US Tribes (Gambling Compliance 4/30)
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9th Circuit Decision:
Rincon Band v. Schwarzenegger (April 20, 2010)

Earlier Story:
Column: Court ruling could hurt support for tribal casinos (4/29)
Editorial: California tribes can't get free ride on casinos (4/26)
Editorial: California deserves a share of tribal revenues (4/26)
Editorial: Appeal decision on tribal compact negotiation (4/23)
Column: Tribal casino revenues no sure bet in California (4/23)
Republican nominees decided compact negotiation case (4/22)
California tribal casino sharing fund slowly losing money (4/22)
Schwarzenegger to ask for rehearing in compact lawsuit (4/21)
Rincon Band wins case on Class III compact negotiation (4/20)
Pauma Band awaits final ruling in gaming compact case (4/19)
Judge indicates he might invalidate Pauma casino compact (4/6)
Another California tribe wins case over slot machine cap (3/31)