Casino Enterprise Management

My brother, John Red-Horse, a retired university professor, will turn 80 soon, and I love to hear him tell stories about the ’60s when he spent time with the American Indian Movement (AIM) and was an early activist for the protection of tribal rights. He tells one story of a speech he heard by the then-sitting Chairman of the Red Lake Band of Chippewa Roger Jourdain (elected in 1959), perhaps the shortest speech in the history of Indian activism. Jourdain stood up and said, “I am going to give you three words that define tribal rights: Sovereignty, Sovereignty, Sovereignty.” End of speech; point made and well taken.

This particular speech was probably circa 1968, but as I sat in the tribal Gaming Compact Renewal panel session at the recent Western Indian Gaming Conference (WIGC) presented by the California National Indian Gaming Association (CNIGA), the theme was just as poignant and applicable more than 40 years later. Current CNIGA Chairman Lee Acebedo reminded the audience of comments former Lt. Gov. Cruz Bustamante made when the original California compacts were signed in 1999. Bustamante warned the tribes, “Now that you’ve attained these compacts, what are you going to do? You MUST always be aware to protect your sovereignty.” With the majority of compacts in California currently up for renewal, a multitude of concerns are at the forefront of the tribal discussion, with protection of sovereignty the main focus.

At the WIGC Gaming Compact Renewal session, Stephen Hart of the Lewis Roca Rothgerber Law firm presented a thorough PowerPoint presentation with positive discussion points based on his involvement with recent compact negotiations in New Mexico. Valerie Spicer, representing Arizona Indian Gaming, discussed the process in Arizona, which for the most part was completed many years ago, but she warned about “unintended consequences” because the Arizona compacts contain language that seemed inconsequential at the time but now basically prohibits online gaming. Sheila Moraga of Oklahoma Indian Gaming spoke about the Oklahoma process and reminded the tribal leaders of the value of tribal gaming to states in that we give back to the community in so many ways. George Foreman, who has been working with California tribal clients, pointed out that despite some of the positive experiences of his colleagues on the panel from other states, as a rule, compact renewals get more expensive and that tribes typically have to do something significant to avoid that. He also reminded the attendees that the other states have significantly fewer tribes than California, so the California tribes truly face a daunting task.

The discussion turned to the Jackson Rancheria compact that was recently ratified as one of the first to be renewed in California, and this topic elicited heated reaction. The consensus from the audience and the panel seemed to be that the Jackson Rancheria renewal is an “ominous indication,” and that the tribe gave up huge concessions of which other tribes need to be aware and wary. Sycuan Chairman Danny Tucker, who moderated the panel, commented that he is worried about the government “picking us off one by one,” i.e. segregating the tribes in the compact negotiation process; he stated he believes there is strength in numbers. Tucker said all tribal leaders in California should let the governor know that the Jackson Rancheria compact is unacceptable to the rest of the California tribes.

Rhonda Morningstar Pope, chairwoman of the Buena Vista Rancheria tribe, stood up in the audience and spoke out very strongly about her views related to the Jackson Rancheria renewal. She stated that the renewal terms are “horrible and disrespectful to all tribes in California and the U.S.” She strongly feels that the covenants involving local government intervention and mitigation lack accountability and strongly erode sovereignty.

NIGA Chairman Ernie Stevens Jr. was in the audience, and, when asked his opinion on the topic, he agreed with Tucker that a key to successful negotiations is tribes working together. “It boils down to consensus of tribal leadership to unify,” Stevens said. “There will always be tough decisions and tough love involved.”

After the CNIGA conference, I interviewed tribal legal expert Toni Cowan about her prior experience on several state gaming boards as well as a staff attorney at the NIGC and about issues of concern for tribes. Cowan said that in her experience although tribal consensus is always good, it is hard with compacts because the tribes are so diverse, especially in California, but to understand their rights as federally recognized tribes is always instrumental. She also noted that in Class III gaming, unlike Class II, tribes are partners with the states and that whether or not tribal leaders agree with the Jackson Rancheria compact, it is valuable because it gives us all something to consider and evaluate.

During my interview with Cowan, which can be heard in its entirety at www.cemaudioedge.com/episode/native-american-gaming-1, Mark Jones, president of the table games company INAG, called in and said that in the Jackson Rancheria compact the state of California “snuck in” language that makes roulette card games illegal and that tribes need to correct that going forward. Currently in the state, the game of roulette played with cards is not defined as the prohibited form of the traditional roulette game. As a vendor, Jones has table games that are operating legally in California because their games are determined by cards, but if the new language is allowed to stand in other compacts, it will threaten currently legal card games. Cowan said that’s exactly why the Jackson Rancheria compact is valuable—because it can be assessed and reviewed for items that need to be tweaked and addressed.

Cowan also reminded listeners that Class II machines are outside the purview of state-tribal compacts and can be a great defense against overreaching state governments. She also noted that tribes can link Class II games legally among the tribal reservations, a move that would provide increased liquidity and bandwidth. Cowan also stressed that characteristic to Class II gaming is a little-known advantage available to tribes under the Indian Gaming Regulatory Act (IGRA) called the Certificate of Self-Regulation. Cowan believes this gives back sovereignty and provides greater self-determination for tribes, but has not been used frequently. (Toni Cowan currently consults with Catania Gaming Consultants and may be reached at toni[at]cataniaconsulting.com.)

Class II implementation for tribal casinos certainly adds a suitable defense strategy to the compacts. On the CNIGA panel, Hart said he believes Class II machines offer a great opportunity to tribes as the Department of Interior makes it very clear that Class II machines are NOT a part of the Class III compacts.

Following up on this defense strategy, I also interviewed Dual Cooper of SlotOne, a wholly owned subsidiary of Rotate Black, Inc. a gaming company with new revolutionary technology about to hit the market that takes Class III slot game titles and creates very compelling legal Class II games. Dual and his partner John Paulsen, are longtime gaming veterans who saw a need in the market during their years of managing casinos.“It came to me when looking at Class III and Class II equipment on the floor that there is a big niche for good quality Class II technology,” Cooper said. SlotOne’s products are based on actual name Class III titles so customers are used to them and drawn to them, but the mathematics and technology converts these games to true Class II games. When the lack of taxation from revenue share compact requirements with state governments is taken into account, many Class II games perform better than Class III games from a bottom-line revenue standpoint. (For more information on SlotOne, Dual Cooper may be reached at (231) 881-2800.)

During the CNIGA workshops I also attended panel discussions on Internet poker and cigarette sale compacts—although very different discussions in each, the message to protect our sovereignty mirrored that from the gaming compacts discussion and was consistently repeated throughout the conference.

WIGC conference organizer Susan Jensen said she was pleased with the conference this year and noted that the exhibitors and sponsorship numbers had increased from last year. Attendance is always strong, and it was good to see such unity exhibited at our sector’s largest regional show. The WIGC conference was held in a new venue this year at the beautiful Harrah’s Resort Southern California; as I drove away I felt as if I could hear the words from Chairman Jourdain’s speech in 1968 echoing across the Temecula Valley—“Sovereignty, Sovereignty, Sovereignty.”
                

Valerie Red-Horse is an investment banker and financial advisor to tribal governments in her role as president/owner of Red-Horse Financial Group, Inc. offering securities through Western International Securities, Inc. a FINRA and SIPC member firm. Red-Horse Financial Group and Western International Securities, Inc. are separate and unrelated companies. Red-Horse may be contacted at valerie[at]wisdirect.com.