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Bits and Pieces from Indian Country - March 2004

15 June 2004

California continues to make Indian gaming news. Governor Schwarzenegger seems to be getting closer to an agreement with some of the tribes. Cache Creek has just opened a $200 million expansion and appears to be willing to share for the opportunity to get as many slots as the market will bear. If the tribes and the governor hesitate, the voters may approve one of the initiatives that is scheduled to appear on the ballot in November. The most significant of the initiatives would allow slots operated by non-Indians at racetracks. It is too soon to know for certain how either the negotiations or the initiatives will go, but tribes will certainly not give up their monopoly easily.

A group of California tribes and Gov. Arnold Schwarzenegger are near agreement on a deal that could immediately deliver $1 billion or more to the state while lifting the lid on slot machines for Indian casinos. The emerging agreement would generate a large, one-time payment as a bond issue financed with increased revenue from the tribes, according to several sources close to the negotiations. In exchange, tribes could have unlimited slot machines as long as they were willing to pay graduated fees of up to $25,000 a year per machine, sources said. Their existing 20-year tribal-state gambling agreements, or compacts, would be extended. But a number of the state's most successful gambling tribes have balked at the terms and are pondering other options for themselves, which could include a battle in the Legislature, where any new compacts must be approved. James P. Sweeney, Copley News Service, San Diego Union-Tribune, 3-31-04

In less than 20 years' time, the Rumsey Band of Wintun Indians has gone from lending a hand in the building of its Capay Valley bingo hall to overseeing the opening of a full-fledged resort. On Monday, April 5, at 10 a.m., the tribe will open the doors on part of a $200 million expansion -- the Cache Creek Casino Resort -- which more than doubles the size of its existing casino. By June 3, when a 200-room hotel and health spa is complete, with its 27 suites and swimming pool, the tribe will have added eight restaurants and a nightclub. Cory Golden, Davis Enterprise, 3-29-04

A California gambling authority told a group of satellite wagering representatives Monday that he believes a racetrack-sponsored slot machine initiative has little or no chance of passage should it qualify for the state's November ballot. "The main impact of that initiative is it gives Governor (Arnold) Schwarzenegger a hammer to hold over the Indians' head," said I. Nelson Rose, author of a syndicated column, "Gambling and the Law," and a tenured professor at Whittier Law School in Costa Mesa, Calif. …"He'll make a deal with the tribes for, I'd say somewhere between 5 and 10 percent (of their net casino profits). He's already put into his (state) budget that he's expecting half a billion dollars for that. Then he'll come out against the initiative and say we know longer need it," Rose predicted. Jack Shinar, Blood Horse News, 3-23-04

The other major initiative is from an Indian tribe and seeks to due an end run around the governor and the compact negotiations.

A state senator who received $1.3 million in campaign money from tribes sent out two million letters asking voters to support a proposed initiative that would expand gambling in the state. Republican Sen. Jim Battin of Palm Desert, in mailers bearing his letterhead, urged voters to sign a petition to place an initiative proposed by the Agua Caliente Band of Cahuilla Indians on the November ballot. The Palm Springs tribe's initiative was proposed in response to demands by Gov. Arnold Schwarzenegger that tribes with casinos pay more revenues to the state. Under the initiative, tribes would pay as much as corporations - but only if they can operate roulette and craps, games prohibited under current state law. San Diego Union-Tribune, 3-24-04

Governor Schwarzenegger had best hurry. Not only are the Agua Caliente coming around the end, but Congress is threatening to change the playing field and the dialogue is fast growing outside his sphere of influence. Congress has been holding hearings on tribal recognition, Indian gaming, tribal-state revenue sharing and the National Indian Gaming Regulatory Act. It is more than possible that Congress will codify maximum limits on revenue sharing, and those are not likely to exceed ten percent. California wasn't the only state with a budget crisis last year, nor was it the only state to look to Indian gaming to help solve the problem. That caused some at the federal level to think it was time to put some restrictions on the process. As one might guess, Arnie is not pleased.

Congress should limit the amount of casino revenue tribes can give to states because large payments can constitute an illegal tax, an Interior Department official said Wednesday. George Skibine, director of the Bureau of Indian Affairs' Office of Indian Gaming Management, said at a Senate Indian Affairs Committee hearing that tribal payments should be capped at 10 percent of revenue. …The committee hearing was to consider a bill to amend the Indian Gaming Regulatory Act, including the addition of various conditions required for tribes to share revenue with states. …The Indian Gaming Regulatory Act has not been amended since its passage in 1988, despite previous attempts. Erica Werner, Associated Press, Los Angles Times, 3-25-04

A Senate bill could hurt attempts by cash-strapped states to use money from Indian casinos to fill in budget gaps. Sen. Ben Nighthorse Campbell, R-Colo., is pushing a measure that would limit or prohibit agreements that require tribes to share gambling revenues with states. Campbell, the Senate's only Indian member, said the original intent of the Indian Gaming Regulatory Act of 1988 was to help pull tribes out of poverty. "Now we find when states have budget deficits, they look to tribes to bail them out," he said at an Indian Affairs Committee hearing Wednesday. Doug Abrahms, Gannett News Service ,Arizona Republic, 3-25-04

Gov. Arnold Schwarzenegger has weighed in with pointed opposition to proposed amendments to a landmark federal law that set the legal boundaries for Indian gaming. Schwarzenegger registered his criticism in a letter to Sens. Ben Nighthorse Campbell, R-Colo., and Daniel Inouye, D-Hawaii, on the eve of a hearing on legislation to rewrite the Indian Gaming Regulatory Act. "This bill . . . shifts the balance unfairly in favor of the Indian tribes and undermines the ability of the state to adequately protect its own citizens from the adverse consequences of tribal gaming," Schwarzenegger wrote. James P. Sweeney, Copley News Service, San Diego Union-Tribune, 3-24-04

Congress is taking an interest in another area related to Indian gaming, lobbying. It seems some tribes have been forking over some pretty large sums to lobbyists and that makes some in Congress wonder why.

Washington lobbyist Jack Abramoff received $10 million in previously undisclosed payments from a public relations executive whom he recommended for work with wealthy Indian tribes that operate casinos, congressional investigators have determined. Abramoff, one of Washington's best-connected Republican lobbyists, this month was forced out of his firm, Greenberg Traurig, after revelations that he and the executive -- Michael S. Scanlon, a former spokesman for House Majority Leader Tom DeLay (R-Tex.) -- had persuaded four newly wealthy tribes to pay them fees of more than $45 million over the past three years. That amount rivals spending on public policy by some of the nation's biggest corporate interests. In a letter sent to Abramoff late yesterday, Sen. John McCain (R-Ariz.) said investigators on his staff "have recently learned that Michael Scanlon or organizations with which he was in some way associated . . . recently paid you approximately $10 million." Susan Schmidt, Washington Post, Yahoo! News, 3-30-04

In Wisconsin the issue of Indian gaming is in the courts, as opponents try to prove that gaming is constitutionally forbidden. Not every one agrees, in fact, not everyone in Wisconsin thinks Indian gaming is a bad thing. The Mayor of Milwaukee would like to have an Indian casino in the downtown, claiming it would be good for business and development in Milwaukee.

The state Supreme Court deadlocked 3-3 Tuesday over whether casino gambling is legal in Wisconsin and kicked the case back to an appeals court for further consideration. …Tuesday's decision means the lower court will now have to hear the case, which was filed by Kenosha's Dairyland Greyhound Park against the state in 2001. Dairyland argues that a 1993 amendment to the state constitution banned all casino gambling in Wisconsin. Patrick Marley, Milwaukee Journal Sentinel Knight Ridder/Tribune Business News, 3-24-04

Acting Mayor Marvin Pratt and County Executive Scott Walker on Thursday announced an initiative to determine whether the Potawatomi Bingo Casino should move downtown, an idea tribal leaders greeted cautiously. While acknowledging some steep hurdles would have to be cleared for such a move, advocates said it would fuel a surge in downtown development and spending and create thousands of new jobs. It may also spur an expansion of the Midwest Airlines Center and downtown hotels, according to six neighborhood and business groups calling for the review. Steve Schultze, Milwaukee Journal Sentinel, 3-26-04

In a point-counter point spirit, Kansas City does not want a casino downtown, and has support from the state attorney general and the National Indian Gaming Commission.

The Wyandotte Tribe of Oklahoma can't run its downtown Kansas City, Kan., casino, the National Indian Gaming Commission has determined. Kansas Attorney General Phill Kline, Carol Marinovich, mayor of the Unified Government of Wyandotte County and Kansas City, Kan., and Matt All, the governor's chief counsel, announced the commission's decision at a news conference Thursday. Word came in a letter to the government agencies and the tribe dated Wednesday. "This is a tremendous victory as it relates to the enforcement of the rule of law in gaming activities in the state of Kansas," Kline said. "The position of my office throughout all of this is that the rule of law be enforced. Heather Hollingsworth, Associated Press, Topeka Capital Journal, 3-26-04

A federal judge on Tuesday rejected a temporary restraining order sought by the Wyandotte Tribe of Oklahoma for its casino in downtown Kansas City, Kan. The tribe had sought a restraining order after the National Indian Gaming Commission ruled last week that the casino was illegal. Associated Press, Lawrence Journal World, 3-27-04

Authorities shut down a tribal-owned casino in the city's downtown Friday morning, and were preparing to remove more than 150 gambling machines. …The warrants were served around 6 a.m. Friday morning by police and agents from the Kansas Bureau of Investigation. Associated Press, 4-2-04

And in Oklahoma another tribe bought a racetrack. It would appear Oklahoma is friendlier to Indian gaming than Kansas, at least for Oklahoma tribes. Many Oklahoma tribes were forced into Oklahoma in the 19th century by federal Indian policy, now they think it is time to own and open a casino.

The Cherokee Nation approved buying Will Rogers Downs horse racing track this week. "(Gaming) is the trend of the world," Cherokee Councilman Johnny Keener said. "Everyone in the state of Oklahoma would have it if they could have the (sovereign) land." The deal will make the Cherokees the second Oklahoma tribe to buy a horse racing track. The Choctaws bought Blue Ribbon Downs in Sallisaw for $4.25 million in November. Las Vegas Sun, 3-24-04

The Seneca-Cayuga Tribe of Oklahoma has its eye on more than building a high-stakes bingo hall in Aurelius. The tribe is also seeking local political support to gain a Class III gaming compact to construct and operate a full-scale casino on an undisclosed site in the Cayuga Indian land-claim area around the northern end of Cayuga Lake. Scott Rapp, Syracuse Post-Standard, 4-6-04

Congress is reviewing National Indian Gaming Regulatory Act; the governor of California is reviewing the compacts; courts in Wisconsin and New York are reviewing compacts, but the tribes are not sitting around and waiting for permission. In Florida, New York, Kansas and other states, tribes are pushing the envelope. In casinos, sales tax and diversification, American Indian tribes are breaking new ground.

Television bingo may be a sign of things to come, just as Internet wagering may be. Gaming may move from the casino floor into every home, hanging out in the television set or on the computer screen just waiting for people to finish dinner, the dishes or mowing the lawn so they can play the games. That may be the future, but it isn't here quite yet. The NCAA, John McClain and others in Congress, regulators, law enforcement officers and Reverend Gray and the anti-gambling forces have not given up yet. They all promise to fight this battle until the end. And while they fight poker, bingo and Donald Trump have a found a home on television.

But now, that is simply my opinion, isn't it?

Ken

Ken Adams

Ken Adams is the principal in the gaming consulting firm, Ken Adams and Associates. Formed in 1990, Ken Adams and Associates specializes in information, analysis, and strategic planning for Indian tribes, casino operations and gaming manufacturers.

Ken spent over 20 years in the hotel-casino industry, prior to founding Ken Adams and Associates. He held the positions of: Director of Casino Operations, Casino Manager, and Keno Department Manager. During this time, he developed numerous innovative marketing and customer development programs and systems for evaluating casino performance. Some of those programs, such as slot clubs and tournaments, have become industry standards.

Ken is also actively involved in gathering and disseminating information that is important to the gaming industry. He is editor and publisher of and the Adams' Report, a monthly newsletter specializing in identifying trends in casino gaming, regulation and manufacturing, the Adams Daily Report, an electronic newsletter that provides electronic links to the key gaming stories of the day, and the Adams Review, a special report distributed by Compton Dancer Consulting that provides editorial commentary on gaming trends.
Ken Adams
Ken Adams is the principal in the gaming consulting firm, Ken Adams and Associates. Formed in 1990, Ken Adams and Associates specializes in information, analysis, and strategic planning for Indian tribes, casino operations and gaming manufacturers.

Ken spent over 20 years in the hotel-casino industry, prior to founding Ken Adams and Associates. He held the positions of: Director of Casino Operations, Casino Manager, and Keno Department Manager. During this time, he developed numerous innovative marketing and customer development programs and systems for evaluating casino performance. Some of those programs, such as slot clubs and tournaments, have become industry standards.

Ken is also actively involved in gathering and disseminating information that is important to the gaming industry. He is editor and publisher of and the Adams' Report, a monthly newsletter specializing in identifying trends in casino gaming, regulation and manufacturing, the Adams Daily Report, an electronic newsletter that provides electronic links to the key gaming stories of the day, and the Adams Review, a special report distributed by Compton Dancer Consulting that provides editorial commentary on gaming trends.