The Rincon Band of Mission Indians have long been at odds with the state of California and its latest lawsuit, involving the claim that the state is illegally requiring tribes to pay fees that amount to a tax, is just one more dispute. Under federal law states are not permitted to tax tribal governments. The Rincon Band has been negotiating for more slot machines for over four years and now wants a court appointed mediator to settle the matter.

In 2004 the tribe filed a lawsuit in federal court claiming that new gambling agreements under negotiation would ‘destabilise the Indian gambling market’ by allowing some tribes unlimited slot machines but not others. In the lawsuit the Rincon Band also complained that they had spent over US$12 million to build a temporary facility to house the slot machines and then the state did not enforce the one-year deadline to open the tribal casinos by May 2001.

In July 2005 a San Diego judge ruled in favour of the Rincon Band and prevented the San Diego County Treasurer from collecting taxes on Harrah’s Rincon Resort and Casino. That dispute arose as the county had argued that it was taxing a Nevada-based corporation and not the tribe. The facility opened in 2002, operating under a 1999 compact with 1,600 slot machines. The Rincon Band wants to expand that number to 2,500 but California is demanding millions of dollars for its general fund.

State officials claim that the payments demanded are legal because it is a reciprocal agreement with the tribe getting more machines and the exclusive right to offer casino gambling. The tribe counters that the exclusive right is part of California’s constitution and not part of any bargain. Under the state’s demands it is estimated that the Rincon Band would get little extra profit from the extra machines but the state would benefit from over US$37 million annually.

As the lawsuit questions the legality of state compacts it will be extremely difficult for it to prosper. The California Governor is asking for the case to be thrown out, the tribes say that he is negotiating in bad faith and are asking for a mediator to decide between the last offers of both sides. Whatever the judge decides, there is almost certain to be an appeal. After hearing arguments from both sides yesterday, the judge did not issue a ruling. (E-08.14.07)

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