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California Close to Tribal Casino Deals

SACRAMENTO, California – As reported by the L.A. Times: "Asserting control over the future of gambling in California, Gov. Arnold Schwarzenegger vowed Tuesday to 'rid' the state of two ballot initiatives on gambling and announced imminent deals authorizing four Indian tribes to expand their casinos.

"The governor's aides have been locked in talks with the four tribes for two months in an effort to compel them to pay more of their gambling profits to the state. In exchange, the tribes would gain the right to expand their operations.

"…Once the deal is done, the governor made clear, he intends to campaign aggressively against the two propositions.

"The tentative deals fall short of what had been Schwarzenegger's stated goal of extracting 25% of gambling profits from the state's Indian tribes — a sum that would exceed $1 billion a year. Rather, he anticipates receiving 15% of their profits, after they pay jackpots, administration officials said. Only four of the state's more than 50 tribes with casinos are part of the deal, at least for now.

"Under the arrangement, the four tribes would give the state $1 billion to help Schwarzenegger close this year's budget gap, estimated to be $14 billion. They would generate the $1 billion by using their blue chip credit rating — one the state has not enjoyed for years — to obtain a bond that the tribes would repay over the next 18 years.

"…Tribes currently pay $130 million a year into a state fund, with most of the money going to tribes with small or no gambling operations.

"By signing onto the new compacts, tribes would give up some of their sovereignty, agreeing to let the state inspect their facilities to ensure that they complied with California building codes and allowing auditors to inspect slot machines to ensure that they were functioning as promised by the casinos.

"The deals, which would remain in place until 2030, would replace the 20-year compacts that Gov. Gray Davis and tribes negotiated in 1999 and that voters ratified in 2000…"

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