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Tribal payments late, Gambling Commission Chairman says

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SACRAMENTO, Calif. - Amidst the compact renegotiations, outgoing chairman of the California Gambling Control Commission, John Hensley sent a memo to an influential lawmaker alleging that some tribes were not making full payments into a fund mandated by the state/ tribal compacts.

The memo, reported by the San Diego Union Tribune, was addressed to California Senate President Pro Tem John Burton, D-San Francisco. Reportedly the memo was in response to tribal opposition to proposed expansion of the five-member panel to include new auditors.

Hensley has been a controversial figure in Indian country and issued a statement in January that he would step down after Gov. Davis was able to find a replacement for him. Tribes have had a tempestuous relationship with Hensley and attacks upon him have been increasingly strident.

Therefore a feeling exists in Indian country that Hensley's memo is sour grapes. Justified or not, this perception nonetheless is a fairly common among those associated with California Indian gaming.

In the memo, Hensley wrote that some tribes were as much as two quarters late on their payments, which are based on a percentage of the number of machine licenses that a tribe currently holds. The maximum number a tribe can hold is 2,000. During the compact re-negotiations Gov. Davis has hinted that he might lift that limit in exchange for tribes paying a greater percentage of their profits into the state's general fund.

At issue are two funds set up by the tribal/state compacts; totaling an estimated $130 million that are supposed to be distributed to tribes with smaller operations or no casino at all; and to mitigate against off-reservation impacts caused by the casinos.

The story in the San Diego Union Tribune cites an unnamed source as saying that the under-payments amount to a revenue loss in the millions of dollars.

At issue is the method used for calculating the net profits and in his memo Hensley said that a widespread disparity in calculating the profits has led to the problem. Tribal sources say that the Commission has a different method of calculation from that of the tribes.

Chris Lindstrom, the deputy director of Legislation for the Gambling Control Commission says while no tribes are in violation of the compacts, they still may have to pay a late fee. Tribes who are in arrears have to pay a 1 percent interest fine for every month they are late.

Jake Coin, the executive director for the California Nations Indian Gaming Association (CNIGA) says that the Commission is the only state body that has an issue with the tribe's method of calculation, including the California state legislature.

In fact, Coin takes exception to the Commission being allowed to collect interest payments.

"This is a basic disagreement for the formula (to calculate) the payments," says Coin who went on to question," How can you penalize a tribe for that."

It is unclear which, or even how many tribes are currently considered in arrears. The Commission would not release that information citing confidentiality agreements with the tribes.