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California lawsuit reinstated

7 September 2007

CALIFORNIA -- As reported by the San Fransisco Chronicle: "A state appeals court reinstated a lawsuit Thursday by a former state gambling commission agent who says California has lost $330 million in five years by allowing Indian tribes to pay less than they should from slot machine revenue at casinos.

"The Fourth District Court of Appeal in San Diego said it was bewildered by state officials' testimony that they were satisfied the tribes were paying what they owed. The same officials acknowledged that they didn't know how the tribes were calculating their debts, lacked the staff needed to get information from the tribes and had audited only one of 28 tribes since 2002, the court said.

"'We are at a loss to understand exactly how the (state Gambling Control) Commission can possibly insure the mathematical accuracy of the reports' when the commission doesn't know how the figures were derived, Justice James McIntyre said in the 3-0 ruling.

"...The suit by Candace Cates, a former agent with the gambling commission, said the tribes have deducted overhead and payroll costs before calculating the net win and the state's share.

"...Thursday's ruling allows Cates to go to trial in her taxpayers' suit, which asks that state agencies be ordered to collect the additional revenue. Cates would not be entitled to a share of the money, but could recover her legal fees from the state if she won..."

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