For five years the Rincon Band of Luiseno Mission Indians has been negotiating with the Schwarzenegger administration for an extra 900 slot machines at their casino in California. Other tribes have accepted state payments in exchange for gambling expansion but the Rincon have refused to share their gambling profits, maintaining that the state’s demand is an illegal tax.

The Indian Gaming Regulatory Act (IGGR) enacted in 1988 prohibits direct or indirect taxation. Section 2710 (d)(4) of the IGRA states: nothing in this section shall be interpreted as conferring upon a State or any of its political subdivisions authority to impose any tax, fee, charge, or other assessment upon an Indian tribe or upon any other person or entity authorized by an Indian tribe to engage in a class III activity.

A federal judge in San Diego has ruled in favour of the tribe, deciding that Governor Schwarzenegger has negotiated in bad faith for an amendment to the 1999 compact. Federal Magistrate Judge William McCurrine Jr. said that exclusive rights to slots was an insufficient return for demanding money for the state’s general fund from tribes wanting new deals. He said that if the tribe and state failed to reach a new deal within 60 days he would appoint a mediator.

Harrah’s Rincon Casino and Resort has 1,600 slot machines at present. For the additional 900 machines under the Schwarzenegger plan the state would receive an annual US$38 million while the tribe would only benefit from US$1.7 million. The tribe contributes US$1.3 million each year to a state fund for non-gaming tribes and this amount was not going to rise under the state’s plan.
(E-05.01.08)

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