Californian Tribal Gaming

California gaming prospered over the decade following the enactment of the 1988 Indian Gaming Regulatory Act (IGRA). However, the self-reliance that the tribes had achieved through federally regulated gaming was threatened at the state level. Out-of-state gaming interests pushed for regulatory changes designed to narrow the scope of Indian gaming operations.

In 1998, the Supreme Court of California ruled that house-banked card games and slot machines violated the state constitutional ban on Nevada- and New Jersey-type gaming. The court recommended that California could solve the constitutional problem by allowing the voters to approve such gaming on tribal lands through a referendum. The amendment: Tribal Government Gaming and Economic Self-Sufficiency Act (Proposition 5) was presented to the voters and passed by nearly a 2/1 margin, thus allowing Indian gaming to remain on tribal lands. However, in 1999, Proposition 5 was overturned on a legal technicality; specifically, that Nevada- and New Jersey-type gaming was never technically defined in the California Constitution, rendering the amendment unconstitutional.

In March 2000, proposition 1A (Gambling on Tribal Lands Legislative Constitutional Amendment and the Indian Self-Reliance Amendment) was placed on the California state ballot to resolve this technicality and establish the legality of California Indian gaming on tribal land. Proponents of the proposition promulgated that Indian casinos in California provided education, housing and health care for Indian people, as well as jobs that reduced the number of Indians on welfare by 68%.

Once again, voters opted to protect Indian gaming in California by approving Proposition 1A by a 64% winning margin.

In summer 2004, Gov. Schwarzenegger extended the compacts of nine tribes by 10 years and permitted them an unlimited number of slot machines in exchange for increased licensing fees for machines above the original 2,000 machine limit.

In November 2004, voters rejected propositions 68 and 70. Proposition 68 would have required California's casino-owning tribes to pay 25% of their slot machine revenue to local governments for public safety and children's services. Proposition 70 would have allowed unlimited casino expansion on tribes' land if they paid the state 8.84% of their net profits, the same rate that California corporations pay.

Also in 2004, the state alleged that the Morongo and Pechanga tribes were operating machines that violated the terms of their compacts. The parties reached a deal in 2005 which allowed the tribes to keep or replace the terminals if they were modified to comply with Class II standards.

In June 2005, Gov. Schwarzenegger revealed the 20-year agreements with the Quechan of Imperial County and Yuma, Arizona, and the Yurok of Klamath in far Northern California that tightened restrictions on gaming operations.

In September 2005, after signing new gaming compacts, the Los Coyotes Band of Cahuilla and Cupeno Indians and the Big Lagoon Rancheria Tribe planned to build a $160 million gaming complex in Barstow. In June 2006, their plans were challenged on the grounds that the tribes have no historical ties to the land they plan to build on. Later that month, Barstow residents voted down a referendum that would have stopped the tribes from building their casino. The federal government intervened in January 2008, when it reversed its policy on off-reservation casinos and denied the tribes' plans. In March 2009, the tribes submitted another proposal for a smaller project. In August 2011, the Department of the Interior (DOI) announced public hearings on the long-stalled casino development in Barstow. The tribes are still mired in the approval process.

Concurrently, in 2012 after a decade of regulatory delays, the Federated Indians of Graton Rancheria began construction of the casino project adjacent to Rohnert Park City. The $850 million complex with 3,000 slot machines, 5,500 parking spaces, a 200-room hotel, restaurants and bars, opened 5 November 2013 as Graton Resort & Casino.

In August 2006, the California Legislature refused to pass Gov. Schwarzenegger's major expansion of Indian gaming. His proposed compacts would have authorized 22,500 more slot machines in California; in return, the state would have received large amounts of money from each of the tribes benefiting from the expansion. The tribes that were hoping to benefit from the expansion were Los Coyotes Band of Cahuilla and Cupeno Indians, the Big Lagoon Ranchería, the Agua Caliente, the Morongo Band of Mission Indians, the San Manuel Band of Serrano Indians near San Bernardino, the Pechanga Band of Luiseño Indians near Temecula, the Sycuan Band of Kumeyaay Indians of San Diego County and the Yurok. The Legislature did, however, approve a deal with the Fort Yuma Quechan Indian nation to allow them to open a casino on their land. Construction began in November 2007 on the Quechan Casino Resort. The casino opened in February 2009.

In April 2007, the state Senate approved revised compacts with the Morongo Band of Mission Indians, the Pechanga Band of Luiseño Indians, the San Manuel Band of Mission Indians, the Sycuan Band of Kumeyaay Nation and the Agua Caliente Band of Cahuilla Indians that added 22,500 slot machines among the five tribes. After approval in the Senate, and to ensure passage in the House, the governor signed side agreements to compacts with four of the five tribes as a compromise to unions and Democrats who were in opposition. The side agreements stipulated the tribes be audited by the state to prove they are contributing their share of gambling revenue, providing workers with compensation and working to fight gambling addiction. The four tribes also agreed verbally to a union-organizing provision. The Assembly approved the four compacts, and in July 2007 they were signed into law by the governor. Compacts went into effect in January 2008.

The San Manuel Band of Mission Indians was the only tribe that refused to sign the revised compacts. In June 2008, it was disclosed that the Sycuan Band had not yet approved its own gambling agreement, a delay that could cost the state at least $30 million. In August 2008, federal attorneys began looking into whether the Department of the Interior (DOI) could legally approve a gambling agreement that the tribe had not yet executed. This may result in the state revoking the compact, in which case the tribe would have to reapply to the DOI.

Opponents of the deals collected enough signatures by October 2007 for a referendum to overturn the legislation during the February 2008 presidential primary. The Morongo Band of Mission Indians and the Pechanga Band of Luiseño Indians filed lawsuits claiming that the groups violated state constitutional rules related to the process of adding referenda. In November 2007, a Sacramento County court judge ruled voters would be able to decide on the four compacts on February 5. Both tribes filed an appeal. Later that month, the Sacramento Superior Court ruled against the Agua Caliente Band of Cahuilla Indians' attempt to block the referendum on their compact with the Governor. The DOI approved all four compacts in late 2007 despite the legal challenges.

In December 2007, the Bureau of Indian Affairs (BIA) delayed approval of the compacts due to the legal challenges surrounding them. After the compacts were submitted to the DOI they disappeared for two months, surfacing again only once the 45-day deadline for their passage had lapsed. After the 45-day period, if no action is taken the compacts are considered approved de facto, according to federal law. To prevent similar incidents, the BIA created new rules for submitting compacts in January 2008.

At the end of January 2008, Gov. Schwarzenegger announced plans for more compacts adding $13 billion to the state budget over the next two decades. In February 2008, voters approved four compacts that allowed 17,000 additional slot machines. In March 2008, the tribes began installing the new machines. In the same month, the chairman of the California Nations Indian Gaming Association announced that poor California tribes without gambling would continue to receive $1.1 million in casino revenue, although the new compacts no longer require payments to the fund that support them. Tribal leaders have stated they will work with the legislature to ensure that payments continue.

In February 2008, legislation (SB 1201) was introduced to allow up to 2,000 slot machines to 61 tribes who negotiated compacts in 1999. The bill faced hurdles, since there was a cap of 61,957 slot machines for tribes operating slot machines. Allowing each tribe 2,000 machines increased the total to 122,000. Opponents also claimed the bill would amend the 1999 agreements, which allow the tribes to keep most of the gaming revenue, instead of the compacts negotiated in 2004 and 2006, which give the state a cut of the profits. The bill was approved by the Senate in June 2008.

In May 2008, a judge sided with the Rincon Band of Mission Indians in their case against the state. The tribe argued that the fees the state asked for in exchange for more machines were illegal. The judge agreed that federal law allows the state to collect fees for specific uses, such as paying for the impact on traffic, but those fees cannot be used to assist in balancing the state's budget. The judge gave the state and the tribe until July to make a deal. Later that month, the judge put his decision on hold due to a request by the governor's lawyers, who appealed the ruling. He gave lawyers for both sides a month to brief him on whether the decision should be put on hold permanently until the appeal was decided. In June 2008, the state asked the judge to make the hold permanent, while lawyers for the tribe requested the judge to require the state to secure a $101.3 million bond for the tribe if the state is not ordered to negotiate a new compact.

In the same month, the San Jacinto City Council informed the Soboba Band of Luiseño Indians that they would actively fight the tribe's proposal to build a 90,000-square-foot casino and a 300-room hotel on its reservation.

In July 2008, Gov. Schwarzenegger and the Shingle Springs Band of Miwok Indians signed an amended compact that paved the way for Class III gaming at the future Red Hawk Casino located in Shingle Springs. In September 2008, the ratified compact received final approval. It is valid until 2029 and allows a maximum of 5,000 Class III machines. The tribe will share 20-25% of its revenue with the state based on a sliding scale of percentages of net win. The tribe will also contribute $4.6 million per year to the revenue-sharing trust fund. The casino opened in January 2009.

Also in July 2008, the Pauma Band of Luiseño Indians announced a Memorandum of Understanding (MOU) with the county of San Diego. The agreement allows for a 19-story resort casino hotel to be built. The MOU provides an agreement that the financial contribution to the county be used for quality-of-life improvements for residents.

In August 2008, the Catholic Church and California's Indian gaming tribes reached a compromise on amendments to the state Senate bill that would allow major expansion of conventional bingo while outlawing electronic versions played on machines that are similar to slots. The bill was approved in September 2008. It allowed certain approved charities to conduct remote called bingo, while keeping electronic bingo machines outlawed outside Indian reservations. It ended the legal battle over bingo machines that threatened the funds paid to the state by tribes for exclusive rights to offer slots and other electronic gaming devices.

In September 2012, Gov. Jerry Brown approved the first California tribes to operate casinos not located on their tribal lands. The two Native American tribes, North Fork Rancheria of Mono Indians and the Enterprise Rancheria of Maidu Indians, plan to build large casinos on sites outside their reservations. The DOI had approved the tribes' request a year earlier.

In March 2015, the North Fork Rancheria of Mono Indians sued the state after its off-reservation casino still had not yet taken flight. The tribe and the state had signed a Class III gaming compact for the casino but voters rejected it in November 2014. According to the lawsuit, the tribe then asked to negotiate another agreement, but the state refused.

In April 2018, Caesars Entertainment Corporation announced it had signed a definitive agreement with the Buena Vista Gaming Authority, an entity of the Buena Vista Rancheria of Me-Wuk Indians of California, to bring a new 71,000 square foot Harrah's-branded facility to Sacramento, named Harrah's Northern California Casino. In 2020, a ballot measure filed by the tribes that would allow for in-person sports betting at tribal casinos and racetracks, subjcet to a 10% gross revenue tax, missed the deadline to be included on the 2020 ballot, but collected enough signatures to make the 2022 ballot. The measure would also legalize roulette and dice games, subject to tribal compacts.