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California Tribes Accused of Gaming Compact Violations

8 November 2004

SACRAMENTO, California – As reported by the San Diego Union-Tribune: "Opening a legal fight that could determine whether California can control the growth of Indian gambling, the Schwarzenegger administration has notified two tribes that they are operating games that violate their state compacts.

"The devices are video lottery terminals that look and play like slot machines. Some tribes believe they fall into a gray area not subject to the limits and fees imposed on slot machines in the more than 60 gambling agreements, or compacts, negotiated by former Gov. Gray Davis.

"If the tribes are correct, they could operate as many video lottery terminals as they want without paying anything to the state.

" The Davis compacts limit tribes to 2,000 'gaming devices,' with state fees of up to 13 percent of gross revenue. Gov. Arnold Schwarzenegger has agreed to give some tribes unlimited slots, but he raised the state's cut to as much as 25 percent of gross revenue on some machines.

" The difference between slot machines and the video lottery terminals is concealed in the computer system that runs each. With slots, gamblers play directly against the house. Lottery terminals are linked to a central computer and involve playing against other gamblers for a set pool of prizes.

"…The legal debate has become more urgent in recent months with tribes that balked at Schwarzenegger's terms turning to video lottery terminals as an expansion option that does not require the governor's consent.

"The Pechanga band of Temecula and Morongo band of Cabazon in eastern Riverside County already have more than 650 video lottery terminals in their casinos, with plans to add hundreds more in the next two weeks, the state has alleged…"

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