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California Casinos May Hold the Cards

CALIFORNIA – As reported by the Ssacramento Bee: "Gov.-elect Arnold Schwarzenegger hopes to get at least $1 billion from California Indian casino tribes to help bridge the gaping state budget deficit.

"What he gets might amount to a little less than chump change, thanks in part to a computerized bingo game that looks and plays a lot like a slot machine.

"Unlike traditional slots, the bingo machines -- referred to in the sometimes-arcane language of the gambling industry as `Class II gaming devices' -- are exempt from state regulation.

"And that could blunt one of the new governor's most effective tools in trying to squeeze money from casino tribes: granting tribes the authority to have more slot machines in exchange for a share of casino revenues.

"…The machines have their roots in the 1988 federal law that established the rules for Indian gambling. In it, Congress divided gambling into three classes. Class I are traditional and ceremonial games, regulated only by the tribes. Class II refers to bingo and lottery-style games -- and their electronic variations. The states have no regulatory authority over these games, which are overseen by the National Indian Gaming Commission.

"…Since slots provide as much as 80 percent of most casinos' incomes, and since California's compacts now limit individual tribes to no more than 2,000 slot machines, Schwarzenegger is banking on a swap of more machines for a piece of the action.

"…Until recently, Class II machines posed little threat to Schwarzenegger's strategy.

"…But industry experts and tribal officials say the climate around Class II games is becoming much more pleasant.

"In late September, the National Indian Gaming Commission (NIGC) issued an opinion that spells out what the commission would consider a Class II game. The opinion says that as long as the machine has some form of bingo card visible on the screen; has a pre-determined outcome set by a remote master computer (unlike traditional slots, which each have their own computer that doesn't decide the outcome until the game starts); and is linked to other machines and players like a bingo game, it is a bingo game and not subject to state regulation…"

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