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SACRAMENTO, Calif. - One of the two tribes to draw state scrutiny for their
use of video lottery terminals announced their plan to file a lawsuit
against the state of California to establish their right to use the
machines.

The Pechanga Band of Luiseno Indians said they plan to file the lawsuit in
federal court at Los Angeles.

Reuters reported that the proposed suit also seeks to allow tribes to
expand their gaming operations without permission from the state.

In a separate but related move, the Pechanga also filed suit Feb. 14
against the state Gambling Control Commission and the Division of Gambling
Control in the California Department of Justice over the commission's
finding that the video lottery terminals constitute individual devices. The
tribe argued against the finding, citing the linkage between the machines.

The court also put a restraint on the state from taking action against the
Pechanga until further hearings take place.

The Pechanga allege that the state has not gone through the proper channels
outlined in the tribal state compacts and that by doing so, the state has
altered its agreement with the tribe.

"This dispute is over the state's attempt to redefine terms in the compact
relating to gaming devices without first going through the Association of
Tribal and State Regulators as required by the compact," said Pechanga
Chairman Mark Macarro in a press release announcing the lawsuit.

The Pechanga and the Morongo Band of Mission Indians came under fire from
the state late last year for their use of the video lottery terminals.
Tensions mounted between the tribes.

The tribes argued that as separate governments, they have the right to
conduct lottery games much the same way that states do and say that
allowances for these kinds of machines are spelled out in the tribal/ state
gaming compacts. The tribes view their sovereign places in the apparatus of
U.S. governments roughly on par with the states, subservient only to the
federal government.

The state countered that even if the games were not Class III gaming
devices they were still illegal under California lottery laws.

The state threatened regulatory action against the tribes but tensions
seemed to cool in early January when the Pechanga and Morongo made separate
concessions.

Though the Pechanga did not sign an official agreement with the state, they
did announce their intention to drop the disputed machines at the time and
left open the possibility that they would try to take legal action, which
they did last week.

Morongo agreed to reconfigure their machines to make them unquestionably
Class II gaming devices, even signing an agreement with the state stating
that they would do so. Because of recent advances in technology there is
sporadic debate as what differentiates Class II from Class III machines; a
typical example of Class III devices are Nevada-style slot machines, while
Class II devices are not as tightly regulated by the state.

The state argued that the video lottery terminals were Class III devices
and in being so, the Morongo and Pechanga exceeded their agreed-upon limit
of 2,000 Class III devices. The compacts initially signed by the tribes
with the state in the late 1990s limited them to the 2,000 number, the
standard deal at the time. Class II devices, on the other hand, are not
counted toward the 2,000-machine limit.

Attorneys for the Morongo said previously they had no planned legal action
against the state.

Only some of the more recent compacts allow tribes to have machines beyond
that number, but the Pechanga and Morongo are not among them and their
current agreement still limits them to 2,000 slot machines.