California halts tribal compact talks

May 29, 2001 9:52 AM


A federal lawsuit challenging the constitutionality of Indian gaming in California has prompted Gov. Gray Davis to halt all negotiations for new Indian gaming compacts.

In a letter mailed recently to at least nine tribes, an attorney for the Governor’s Office said formal negotiations for the federally mandated compacts would not resume until a decision is reached in the lawsuit.

The suit, brought by four card clubs in the San Francisco Bay area, seeks to overturn the constitutional amendment allowing the state’s Indian tribes to operate house-banked slot machines and card games. The amendment was approved overwhelmingly by the state’s voters last year. The clubs say the measure gives tribes an unfair monopoly on Nevada-style gambling in the state.

The letter suggested that the suit poses a serious threat to the state’s burgeoning Indian casino industry. "This litigation has the potential to extinguish the constitutional foundation" for Indian gaming as it currently exists, said Shelleyanne Chang, the governor’s chief deputy legal affairs secretary.

Sixty-one tribes have gaming compacts with the state. The compacts have resulted in a boom in casino construction on Indian lands. Currently, 47 Indian casinos are up and running, with each casino permitted up to 2,000 slots. Revenue from the one-arm bandits is expected to hit $5 billion in the year ahead, ranking California second only to Nevada in annual slot win.

At the same time, however, the growth of Indian gaming has dealt a severe financial blow to the state’s card rooms. Four years ago, the state licensed 454 clubs. That number is down to 100, according to a trade group representing the clubs.

Spring in Colorado

Gaming win in Black Hawk, Colo., increased 7 percent in April over the same month a year ago, pacing the state to a 6.4 percent increase in monthly gaming win.

Revenues hit $38.3 million in Black Hawk, whose 20 casinos generate more than 70 percent of state gaming revenues. Cripple Creek’s 19 casinos reported $10.9 million in April win. Central City’s five casinos reported $5.3 million in win.

Combined, state revenues were up from $51.3 million in April 2000 to $54.6 million.

Locals casinos limited

The Nevada Assembly has approved a bill making it more difficult to build neighborhood casinos.

The bill requires a three-fourths majority plus one vote before a county or municipal government could issue a casino permit. The bill also extends the distance between a casino and a residential area from 500 to 1,500 feet and from 1,500 to 2,500 feet between a casino and a church or school.

The bill, already approved by the Senate, now heads to Gov. Kenny Guinn for his signature.

Arizona wants share

Arizona officials have launched negotiations with 17 gaming tribes in hopes of getting a share of the millions the tribes are raking in from casinos.

The state is looking for a 7 percent cut of revenues from the tribes’ $800 million-a-year gaming industry. The state’s 10-year compacts with the tribes expire in 2003, at which time new agreements will be struck.

Currently, the state gets nothing from Indian casinos beyond fees to run the state Department of Gaming.

Tough month

Mississippi casino revenues fell 9 percent between March and April, and industry officials blame it on a weakening economy and higher heating and gasoline prices.

The state’s 30 casinos took in $222.2 million in April, up from the $218.3 million reported in April 2000 but down from March’s revenues of $234.2 million.

In an interview with The Associated Press, Andy Bourland of the Mississippi Gaming Association said, "What you are seeing is that the Mississippi market, as a regional market, is dependent on repeat business. Many of our patrons who have gone two or three times may have reduced that to once or twice. That has a significant impact on the overall revenue numbers."

Year-to-date revenues statewide are up about 1 percent over 2000. Revenues on the Gulf Coast have increased 5.7 percent over last year. Along the Mississippi River and in the northwestern Memphis market, revenues are down about 1 percent.

Tracks seek slots

Three South Florida harness and greyhound tracks have collected enough voter signatures to get the state Supreme Court to review a ballot initiative that would allow gaming machines at the tracks.

The Hollywood and Flagler dog tracks and the Pompano harness track want to get the initiative on the ballot in 2002. Voters would have to

approve the measure to amend the state Constitution to allow casino-style games.

The tracks said they have 200,000 signatures, well in excess of the 10 percent of voters in the affected counties required to force a legal review of the initiative. The tracks must collect about 488,000 signatures to get the measure on the ballot.

State Attorney General Bob Butterworth, a gambling opponent, has said the language of the initiative is too vague to pass legal muster.

No vote, no games

A Louisiana state judge has ruled that parishes that voted out video poker in 1996 cannot hold their own referendums to bring back the games.

The ruling was issued in response to a lawsuit by the town of Farmersville, which sought to approve video machine gambling in spite of a decision by Union Parish voters to ban it. Such referenda could only be held if the state Legislature OKs them, the judge said.

Thirty-three parishes voted out video poker under the terms of a 1996 state constitutional amendment giving voters the final word on the machines.

Emerald sues board

Emerald Casino is suing the Illinois Gaming Board, claiming the state regulatory body illegally denied it a license renewal so it could build a riverboat casino in the Chicago suburb of Rosemont.

Emerald has held a gaming license in the state since 1992. The company sought to transfer the license to Rosemont after the company shut down its riverboat operations in Jo Daviess County in 1997.

Municipal officials in Rosemont approved the license transfer in 1999 and construction was begun on a casino in the affluent Chicago suburb only to be halted when the Gaming Board refused to renew Emerald’s license in early 2000.

Emerald’s suit claims that state gaming law obliges the board to renew the license.

Ameristar expands

Ameristar Casinos has broken ground on a $110 million expansion of its riverboat casino complex in St. Charles, Mo.

The company has contracted with J.S. Alberici Construction Co. for completion of the facility, which includes two new gaming vessels, a 550-seat buffet, a steakhouse and an entertainment lounge. The gaming boats would contain 2,400 slot machines and 60 table games in 70,000 square feet of casino space, 25,000 square feet more than the existing facility.

Opening is scheduled for mid-2002.

Wisconsin windfall

Wisconsin lawmakers voted unanimously last week to spend $52 million derived from a tax on Indian casinos.

A joint budget committee of the Legislature has earmarked the money for several purposes over the next two years, like $5 million for Milwaukee to improve traffic flow and $1.5 million for the state’s environmental fund.

Some tribes have protested the expenditures, saying not enough was spent for tribal economic development.

Spreading the wealth

Atlantic City’s casinos may be looking to spend some of their money in places other than the seaside resort.

According to a report published last week in the Newark Star-Ledger, New Jersey’s casino operators are looking around the state - Newark, New Brunswick, Camden and the Meadowlands Sports Complex were mentioned - to make major investments under pending legislation that provides tax credits in exchange for spending on developments outside Atlantic City.

The paper mentioned Park Place Entertainment and Tropicana specifically, saying both are looking in Newark.

The legislation allows casinos to use the credits to offset the cost of expanding their operations in Atlantic City.

A state agency, the Casino Reinvestment Development Authority, would oversee the spending. The authority collects about $50 million a year from a 1.25 percent tax on casino revenues.

A dog’s life

As if competition from casinos wasn’t enough, the nation’s greyhound tracks have a new enemy.

"All across America, there is a mounting cry to end the killing and cruelty of dog racing," said Carey Theil in announcing the formation of GREY2K USA, a Massachusetts-based group devoted to banning greyhound racing.

The group was formed after a referendum to close the tracks was defeated last year by Bay State voters.

GREY2K has launched a national advertising campaign and is lobbying for greyhound bans in Oregon, Massachusetts and New Hampshire and has joined a legal challenge to a voter drive to place slot machines in Florida’s racetracks.