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Let the games begin; California; Re-fighting an old battle

New York: Catskill casino for an Oklahoma tribe?

Someone much wiser than I once said, "Those who do not learn from history
are destined to repeat it." He may well have been talking about Arnold
Schwarzenegger, California's Republican governor, who is preparing to fight
a battle already waged in Oklahoma two years ago.

In a Nov. 4 letter, one of Schwarzenegger's minions, attorney Peter
Siggins, informed the Morongo Band of Mission Indians and Pechanga Band of
Luiseno Indians that both tribes were in violation of their gaming compacts
because they had too many slot-machine-like devices in play at their
casinos. If the "extra" machines are not returned to their manufacturers
within 60 days, the Associated Press reported that Siggins threatened "to
take appropriate action under the terms of the compact."

Under their current compacts, the bands are allowed 2,000 Class III slot
machines each. Both bands already have this number in play, and are
required by compact to pay Sacramento up to 13 percent of their gross slot
revenue. The tribes say that the additional machines that Schwarzenegger is
upset about are video lottery terminals (VLTs). These are Class II machines
and are thus not subject to compact limits. According to the Associated
Press, the Pechanga have 1,671 VLTs and the Morongo 2,025.

Evidently the confrontational Terminator-turned-governor has been too busy
putting his foot in his mouth ("The Indians are ripping us off," he told an
audience in San Diego in October) to bother learning the difference between
VLTs and traditional slots.

In September 2003, the National Indian Gaming Commission issued guidelines
specifically delineating the sometimes-fuzzy boundary between the two
classes. The distinction, NIGC said at the time, is whether or not the game
is played in "real time." This means that, in the case of bingo-like games,
numbers are drawn as the game progresses; players cover their numbers and
compete against each other - not the house - to win. Such machines are
considered "electronic aids" and considered Class II.

If, however, a machine plays the game internally when the player enters his
wager and then spits out the result, that machine is a facsimile of the
game and not an aid to playing that game. Thus the player is playing
against the house, not other players, making the machine a Class III
entity.

Thus it matters not that VLTs "are virtually indistinguishable from slot
machines," as Siggins claims in his Nov. 4 letter. What matters is how the
game is played internally - not what the game looks like. (See Indian
Country Today Vol. 23, Iss. 25, "Guidelines make Class II gaming more
attractive" and "Let the games begin - Court rejection clarifies Class II",
Vol. 23, Iss. 39.)

Regular readers of "Let the Games Begin", which Gov. Schwarzenegger and
barrister Siggins are obviously not, will remember that Oklahoma went
through a similar debate in 2002 when MegaNanza, an electronic game machine
manufactured by Multimedia Games Inc. of Austin, Texas, became the center
of a Class II v. Class III controversy.

In June 2002, NIGC ruled that MegaNanza, an electronic version of bingo
(bingo is a Class II game), was a facsimile - not an electronic aid. At the
time, Class III gaming was prohibited in Oklahoma. A federal judge
eventually dismissed Multimedia's subsequent lawsuit against NIGC and the
company developed a Class II version of the game, called ReelTime Bingo.

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In December 2003, I reported that Multimedia believed that California
tribes were "prime candidates for our new generation of Class II games."
According to a Nov. 7 report in the San Diego Union-Tribune, the machines
in question are believed to be Multimedia machines.

If Schwarzenegger and Siggins would only read Indian Country Today, they
would know better than to waste their time on battles already fought. Too
bad for them - it's their loss.

FINALLY, A CATSKILL CASINO?

Activity on the Indian casino front in New York has been quiet in recent
months. But Republican Gov. George Pataki broke the silence on Nov. 12 by
signing what could be a landmark agreement with the Seneca-Cayuga Tribe of
Oklahoma. This deal, if it comes to fruition, could set a precedent for
tribes seeking to cross state lines for gaming purposes.

The deal calls for the Seneca-Cayuga to give up its portion of the $247.9
million settlement awarded in 2001 in the Cayuga land claim case (which
remains under appeal). In return, the tribe gets rights to one of three
Indian casinos authorized for the Catskill region of New York state, which
is nowhere near the land claim area. Revenue sharing provisions call for
the tribe to pay 25 percent of its net profits to Albany; the Seneca-Cayuga
will also collect state sales taxes on goods and services sold to
non-Indian customers.

The Seneca-Cayuga also agreed to give up gaming rights elsewhere in the
state. The tribe faced legal action from surrounding municipalities when it
announced plans to open a bingo hall on land it acquired within the claim
area.

This agreement marks the third time that Catskill gaming rights seemed to
have been awarded, only to see things collapse. In May 2003, the St. Regis
Mohawk Tribe appeared to have the inside track but their Memorandum of
Understanding with Pataki fell apart shortly after its announcement when
tribal voters replaced the government that signed it. Then, this past June,
the Cayuga Nation of New York forged a Memorandum of Understanding with
Albany, only to see the state try to alter its terms. The New York Cayuga,
also party to the land claim, have insisted that the Seneca-Cayuga have no
legitimate gaming interests in a state that their ancestors left in the
late 18th and early 19th centuries.

The Seneca-Cayuga deal is nowhere near a certainty. It still needs approval
from the New York Legislature, as well as the federal government, and will
likely face challenges from local opponents and anti-Indian groups in other
parts of the state.

Up until October 2003, Pataki insisted that he would not deal with "out of
state" tribes. Although the Seneca-Cayuga are descended from Indians who
once lived in what is now Upstate New York, they are federally recognized
in Oklahoma, where they operate a casino and other business ventures. But
Seneca-Cayuga willingness to collect state sales taxes, something New York
tribes have flatly refused to even consider, was likely a crucial factor in
sealing the deal.

It remains to be seen if the land claim can actually be settled without the
consent of the Cayuga Nation, which under this scenario would get the
entire land claim award, but would still have negotiate its own gaming
compact with Albany.

As we've said many times before, stay tuned. This one's not over yet.