From the San Diego Union-Tribune:
California can’t force Indian tribes to share gambling profits to repair the state’s budget problems, the 9th U.S. Circuit Court of Appeals said Tuesday.
In a stunning blow to Gov. Arnold Schwarzenegger’s tactics when dealing with tribes wanting casinos, a divided, three-judge panel of the appeals court said the governor can’t ask for money for the state’s general fund without offering something of value in return because that amounts to an illegal tax.
The court upheld a 2008 ruling by a federal judge in San Diego that the governor was playing dirty in his negotiations with North County’s Rincon Indian band.
“This is a great, big message to the state,” Rincon Chairman Bo Mazzetti said. “Your days of trying to bully tribes around … those days are over.”
In the decision, Pasadena-based Judge Milan Smith Jr. compared the state’s efforts to those of the federal government when it took land from the Sioux after Lt. Col. George Custer reported finding gold in the Black Hills of South Dakota.
“Today, many tribes have struck figurative gold with casino gaming, and again, some state governments, just like their predecessors, are maneuvering to take, or at least share in, some of that figurative gold,” Smith wrote for a two-judge majority.
In his dissent, Judge Jay Bybee said tribes with casinos here and around the country have agreed for years to share revenue with state governments, just as Schwarzenegger was seeking.
“The holding … does not just upset the apple cart — it derails the whole train,” Bybee wrote. “If the majority is correct, then there is nothing for California to do but to authorize whatever (slot machines) the band wants. The band wins. Everything.”
The state will seek to have Tuesday’s decision reviewed by a larger panel of 9th Circuit judges, said Jeff Macedo, a spokesman for Schwarzenegger.
Legal experts disagreed on whether the case would be reviewed by a larger panel, or by the U.S. Supreme Court, should it be asked.
Macedo said the governor sees this as federal meddling.
“We still believe we were negotiating in good faith,” Macedo said. “This amounts to the federal courts again telling the state what it can and can’t do, and it’s not allowing the state the ability to negotiate these compacts.”
The ruling has big implications for Schwarzenegger, who campaigned on a promise to make tribes “pay their fair share” for casino expansions.
“It’s about millions and millions of dollars to the state of California,” said Matthew L.M. Fletcher, a law professor at Michigan State University who follows Indian legal issues nationally.
The ruling could affect other casino negotiations, he said.
The issue comes down to the kind of bargain that tribes and states can strike. The federal 1988 Indian Gaming Regulatory Act, known as IGRA, laid out how tribes can set up Las Vegas-style casinos. It said such gambling requires state approval, but that states can’t tax the profits.
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