State, Pechenga disagree on count

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SACRAMENTO, Calif. - The Pechanga Band of Luiseno Indians suffered a
setback in federal court last week when a judge refused to stop the state
of California from cracking down on multi-station games while the tribe
appealed in court.

The tribe had just won a restraining order against the state a few days
prior, but The Associated Press reported that a Los Angeles federal judge
refused to issue a preliminary injunction.

At issue is the way that the state counts multi-station games. Since all
the stations are connected to a central machine, the tribe contends that
only the central machines should be counted and not the individual player
stations.

The tribe's compact allows only for 2,000 machines - and the disputed count
is at the heart of the matter. Under the tribe's count, there are slightly
less than 2,000 machines: 1,997 to be exact. However, under the state's
counting methodology the tribe has 2,091 such machines, which would place
them over the limit.

The tribe argued that the state had not gone through the proper
communication procedures they say is their right under the compacts.

A spokesperson in the Justice Department claimed it was the tribe's choice
to go directly to litigation.

"Although we had hoped for a different outcome today, we remain confident
that when all of the facts and arguments have been presented, the court
will agree that the state must comply with its obligation to follow the
important process as outlined in the compact," said Pechanga Chairman Mark
Macarro in a press statement. "We will move forward and weigh all of our
options."

Additionally, Macarro contends that the state is arbitrarily enforcing the
rules and that such actions constitute a fundamental change to the
tribal/state compacts by not following the consultation and grievance
processes spelled out in the compacts. He wrote that his tribe has operated
the disputed machines for two years and the state had done nothing until
recently.

The Pechanga also plan to file a separate but loosely-related lawsuit
against the state in the coming weeks regarding video lottery terminals
(VLTs). Late last year the state threatened action against Pechanga and the
Morongo Band of Mission Indians for operating the machines.

Morongo agreed to reconfigure their machines so that they were Class II
gaming devices and signed an agreement with the state stating they would do
so. Class II machines are not as tightly regulated by the state. The tribe
said it signed the agreement to protect itself from the state by setting a
clear definition on the devices as Class II.

The Pechanga argue that the VLTs are classified separately from other Class
III gaming devices in the compact they signed with the state, which lists
lottery games allowable under the state lottery laws in a separate
subsection from other Class III devices.

Part of the problem is the differing views of tribes and the state over the
definition of a slot machine.

"What we are arguing is that it is not the device that makes a slot
machine," said Forman.

Instead, Forman said it is the formulation from which the money is paid
that determines whether a device is a slot machine.

In multi-station games, the focus of the existing Pechanga lawsuit, there
is only one number tabulator for all the players, akin to a table game
without the dealer. Forman contends that it should be the individual number
generators that determine individual machines and not individual stations
that are counted.

An unidentified source in the California Department of Justice was listed
in a Copley News Service story as claiming that at least seven other tribes
operate multi-player machines. Nathan Barankin, a spokesman the Department
of Justice, said the number is "not inaccurate."

Forman said this does not surprise him and that many casinos use these
types of devices and other states have made separate laws to deal with
them. In Arizona, for example, the state does not count individual stations
but limits them to only 2.5 percent of the casino floor space.

Barankin indicated the matter could be settled out of court. However,
creating a compact provision such as Arizona's in the Golden State would
require negotiations with the governor - something the Pechanga and other
tribes who likely have the multi-station devices have been reluctant to do
for various reasons, including greater concessions of revenue and greater
controls given to the state.

With the lawsuits heating up, Forman said that the matter is far from
settled.

"The last word on [the issue] is a long way from being written."