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San Pasqual sue California for 1999 slot machine cap

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June 10, 2009

The Sacramento Bee reported today:
"Late last year, the San Pasqual Band of Mission Indians sent the state $535,000 as a down payment on $1.8 million in licensing fees for 428 slot machines it wanted to add to its San Diego County casino (Valley View Casino). The state Gambling Control Commission promptly sent the money back, saying new slot machine licenses were not available in California.

"Now San Pasqual is demanding that the state pay $550 million in damages for lost casino revenue and breach of contract. The claim, a precursor to a lawsuit, reveals an intriguing legal and political fight as some California Indian tribes say they refuse to be shaken down by Gov. Arnold Schwarzenegger to pay for new casino deals.

"On multiple fronts, tribes are challenging a California slot machine limit set under 1999 gambling compacts with 61 tribes. While individual tribes were allowed up to 2,000 slot machines, the state imposed a 32,151 statewide limit on the calculation that few tribes had the market capacity for major casinos.

"But the California tribal gambling industry exploded from tiny rural casinos to lavish gambling resorts. And Schwarzenegger saw an opening to negotiate new deals - allowing individual tribes to bypass the state slot cap in exchange for making tens of millions of dollars in payments into California's revenue fund.

"From the time he ran against Gray Davis in the 2003 recall, Schwarzenegger famously argued that the 1999 gambling deals under Davis were a boondoggle for California because the state got no cut of casino profits.

"His efforts to amend 1999 compacts to cut new deals for wealthy tribes fueled a significant expansion of tribal gambling in California. Yet now some tribes are pushing back.

"The San Pasqual tribe of San Diego County, which currently operates 1,572 slot machines, told Schwarzenegger to forget about any new deal. It asserts in a June 1 claim for damages that it refuses "to pay unconscionable sums"
to get additional slots it believes it is entitled to under its 1999 deal.

"We've talked to Schwarzenegger and the Gambling Control Commission, and we're not interested in any new compact," said San Pasqual's attorney, Stephen Warren Soloman. "We have had a compact since 1999, and we want them to live up to their obligation."


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