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Suit to block California gaming deals dropped

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SACRAMENTO, Calif. - A group of California horse racetrack operators who
filed suit to prevent recently amended gaming compacts from taking effect
dropped its lawsuit May 25. The suit had ostensibly prevented the issuance
of a state transportation bond.

When Gov. Arnold Schwarzenegger signed several compacts with California
tribes last year, one of the centerpieces of the agreement was that it
allowed the state to issue a $1 billion transportation bond for
California's fast-decaying transportation infrastructure.

However, the lawsuit did not prevent tribes from making payments on that
bond. A tribal attorney said tribes have already made quarterly payments
toward the bond and other obligations that were spelled out in the amended

Signatory tribes to the Schwarzenegger agreement were slated to pay off the
transportation bond over the next few decades, but the state has been
unable to do so because of the horse track operators' pending litigation on
those agreements.

Former Sacramento County Sheriff Glen Craig originally filed the suit on
behalf of five racetracks, located exclusively in the San Francisco Bay and
Los Angeles areas.

Attorney Howard Dickstein, who last year represented several tribes that
signed the amended compacts, said that though the dismissal "lifts a cloud
over the amended compacts," he contended that the horse racetracks could
still revive the suit since it was dismissed without prejudice.

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Dickstein said he saw the dismissal of the lawsuit as a potential for horse
racetrack operators and tribes to. facilitate better relationships.

Those relationships have been contentious over the past year. The horse
racetracks managed to place a ballot initiative last year that sought to
allow expansion of slot machines into select California horse racetracks
and card clubs. The backers of that initiative eventually dropped out
shortly before the election amid low poll numbers; and the initiative was
clobbered at the polls last November, losing by a large margin.

"The [horse race] tracks seem to want to get past the poisoned atmosphere
of Proposition 68 and begin to discuss their future with tribes," said
Dickstein, essentially confirming press reports that there have been some
very preliminary discussions between the horse racetracks and tribes.

Mayer said in an Associated Press story that the group dismissed the suit
to resolve issues with Schwarzenegger's office and that no hearings were
held regarding the merits of the case.

Mayer also told The Associated Press that the case could still be re-filed.

The initiative push last year by the card clubs and horse racetracks came
after the card clubs had sued the state seeking to overturn California
Proposition 1A, which had in effect placed into California law the
allowance of tribal gaming and was struck down in 2002.