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Best of Ken Adams

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Bits and Pieces from Indian Country - October 2005

4 January 2006

Indian gaming is challenging. Regardless of whom you are or what you think is true about Indian gaming, there is a state or a time when it is not true. The governor of California is negotiating new compacts; he hopes to place more restrictions on the tribes and to gain more revenue for the state. Arnie, when he was campaigning to replace his inept predecessor, seemed to think it would be a slam-dunk to offer a few more slot machines to get a few more dollars. He did not realize that tribes do not think or act as one and that politics can always step in and make a mess of the best laid plans of either men or mice. And he certainly did not take into account the possibility that there could be a slot machine that was not a slot machine.

In a vivid display of their Capitol influence, several wealthy Inland tribes with casinos Thursday blocked for the year gaming compacts negotiated by the Schwarzenegger administration. The Inland tribes, which want to renegotiate a 2,000-per-tribe slot-machine cap included in their 1999 compacts, contended that the new deals set an unacceptable precedent of concessions to the state. They fear the governor's office will press them into similar deals…But in recent days, Inland tribes -- including the San Manuel Band of Mission Indians near Highland and the Agua Caliente Band of Cahuilla Indians in Palm Springs -- sent lawmakers strongly worded letters opposing the compacts. The tribes' lobbyists and leaders worked the Capitol. The tribes complained that the governor's office took advantage of the Yurok and Quechan tribes. The pacts force the tribes to share too much slot-machine revenue with the state, give local governments too much say over tribal decision-making, and give unions excessive power to organize casino workers, among other objections. Jim Miller, Inland Southern California Press-Enterprise. 9-9-05

Governor Arnold Schwarzenegger announced today he has completed gaming agreements with two Indian tribes to allow them to build casinos in the Barstow area. The two tribes, Big Lagoon Rancheria and the Los Coyotes Band of Cahuilla and Cupeno Indians, have joined with Michigan-based developer BarWest to build a joint casino project in Barstow, near Interstate 15, just south of the Factory Merchant Outlet Malls. "These agreements are a creative solution for avoiding the construction of a casino on California's coast and alongside a state ecological preserve, while respecting the tribes' federal right to engage in gaming," Schwarzenegger said in a release. Scott Shackford, Desert Dispatch, 9-9-05

Assemblywoman Loni Hancock, D-Berkeley, asked state Attorney General Bill Lockyer on Monday to investigate the new video bingo machines at Casino San Pablo, charging that they were nearly identical to slot machines. Carolyn Jones, San Francisco Chronicle, 9-6-05

The governor of California is not the only one that was easily confused by the concept of a non-slot machine slot machine. The state of Oklahoma so far has been fooled by the same illusion. When negotiating the compacts with the Indian tribes in Oklahoma, there was an assumption by the state that the tribes would rush to put in "real" slots (not to be confused with reel, five reel nickels or any other kind). But it seems that thus far those other games are still good enough and of course not subject to the fees imposed by the compacts. There is enough confusion over the difference between Class II and Class III games that it seems Congress is going to jump into the debate and try to create a less ambiguous definition.

State revenue from tribal casinos for games played in August dropped 16 percent…Eighteen American Indian tribes paid the state a total of $880,391 for card games and compacted electronic gambling machines...At the current rate, the state will receive about $12 million this fiscal year. State Treasurer Scott Meacham had projected $40.5 million. Meacham said two factors have caused the unexpected shortage: Vendors have been slow to deliver the compacted gaming machines. Tribes haven't felt a need to install those machines. Federal law allows tribal casinos to offer Class II games, which must be based on bingo or pull-tabs. Class III games, which include slot machines, unrestricted card games, roulette and keno, require a compact between a tribe and a state. Tony Thornton, The Oklahoman, 9-27-05

…Twenty-six of Oklahoma's 38 federally recognized American Indian tribes have signed compacts for limited Class III gambling…Under those agreements, the state receives a portion of their casino revenue. Some Oklahoma tribes, most notably the Osage Nation, have signed compacts but opted not to install the Class III machines to avoid paying the state a share…On compacted games in Oklahoma, tribes pay the state between 2 and 6 percent of the daily net-win… Anthony Thornton, Oklahoman, 9-19-05

The Bush administration is preparing legislation that would narrow the definition of Indian gaming devices that mimic slot machines, but are not subject to state controls, limits or fees. The proposal will attempt to draw a "bright line" between bingo-based and other so-called Class 2 machines and conventional slots, which may be operated only under a tribal-state gambling agreement, or compact. James P. Sweeney, Copley News Service, San Diego Union-Tribune, 9-17-05

It is easy to see how a transplanted Austrian could become confused. I become confused frequently myself. It is part of the large battle over regulation of Indian gaming on and off tribal land. There are very passionate people on both sides of battle lines, and tribal leaders across the country are gearing up to defend their position.

American Indian gaming leaders are prepping for a no-holds-barred battle with Congress over plans to open and amend the Indian Gaming Regulatory Act, officials said during the recent Global Gaming Expo at the Las Vegas Convention Center. 'We are engaged in hand-to-hand combat as we speak,' Jana McKeag, vice president of government relations at Venture Catalyst Inc., said matter-of-factly as she moderated a roundtable discussion Sept. 15 aptly titled 'Indian gaming: The coming federal battle.' At issue is whether the federal government should be allowed to revisit IGRA and make changes to the current pact. In June, U.S. Sen. John McCain, R-Ariz., head of the Senate Indian Affairs Committee, said at a panel hearing that he plans to amend the act to strengthen federal regulation of tribal casinos, restrict Indian gaming on off-reservation land and tighten a loophole that allows tribes to pay huge fees to advisers as long as they are described as consultants instead of managers. Industry leaders have balked at the idea, saying the federal government is already over-regulating Indian gaming. But McCain wants the issue addressed again, seeing that the tribal casino industry has gone from a $500 million per year industry in 1988 (when the act was passed) to a nearly $19 billion industry, according to 2004 figures. Ryan Slattery, Indian Country Today, 9-27-05

The issue of Class II games is a very important one. In fact, it is possible to say it is as important as any legal issue of sovereignty. If the tribes have a viable option for slot machines that are not subject to regulation by an individual state, then it reinforces the sovereignty of a tribe, allowing a tribe to choose, without outside interference, to pursue a casino or to enlarge a casino. It does not allow for a casino off tribal trust land, but does allow for complete authority over operations on trust land. That rates a Class II game in the rarified air of cigarette or gasoline taxes (and the original bingo hall gambling that started all of this), and places it on the same emotional battlefield.


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.