A federal judge told California’s gaming regulators in August that the state shortchanged Indian tribes on the number of slot machines they could operate when casinos were legalized 10 years ago.
The state took initial steps to rectify the matter, but the recession softened the need.
The California Gambling Control Commission issued 3,548 slot machine licenses to 11 tribes last week after the 9th Circuit Court of Appeals rejected the state’s request to delay the judge’s ruling.
The figure is one-third of the 10,549 slot machines made available after the judge sided with two tribes that claimed the state miscalculated the formula used to allocate slots.
Union Gaming Group principal Bill Lerner said tribes didn’t apply for the full amount offered for two reasons — economic conditions and the chance the 9th Circuit overturns the decision, which would rescind the licenses.
California requires a prepayment of $1,250 per machine, making new games a pricey proposition.
The largest request, 1,650 slot machines, went to a central California tribe that has been planning a casino near Fresno since 2004. The smallest allotment was 27 games for a tribe near Chico.
In San Diego, the San Pasqual tribe will add 428 slot machines to the Valley View while the Rincon tribe will add 400 slots to Harrah’s Rincon. The new games will give both casinos 2,000 slot machines, bringing them up to the 1999 compact limits.
California is the nation’s largest Indian gaming market, with an estimated $7.8 billion in annual revenues based on Casino City’s Indian Gaming Industry Report.
The state had 66,115 slot machines at the end of 2007. Recent changes increase the total to 83,000. The economy, however, has slowed growth.
Several tribes negotiated new compacts with the state a few years ago, agreeing to trade higher gaming taxes for an increase to 5,000 slots per casino. None of the tribes have reached the figure. Pala in San Diego still operates 2,000 slots. Thunder Valley near Sacramento has 2,400 games, while Pechanga in Temecula has 3,400 machines.
California voters 20 months ago allowed the state’s four largest Indian casinos to add up to 17,000 slot machines. Only a small percentage of the games have been ordered.
Last week, Cache Creek near Sacramento blamed the economy for ending an expansion that would have given the casino 8,000 slots.
Gov. Arnold Schwarzenegger wants to control gambling growth so cash-strapped California can reap taxes from the new slot machines. The state hopes the Appeals Court will toss the 10,549 new games.
“We are still moving forward with our appeal and we expect to win,” Schwarzenegger spokesman Jeff Macedo told The Sacramento Bee.
Howard Stutz’s Inside Gaming column appears Sundays. E-mail him at firstname.lastname@example.org or call 702-477-3871. He blogs at lvrj.com/blogs/stutz.