California: Gov. Newsom says federal denial of two gaming compacts threatens tribal economies

Tribal-State class III gaming compacts “are agreements between the state and separate tribal governments” that specify how many gaming devices and casinos a single tribe can operate, according to the Tribal Alliance of Sovereign Indian Nations. California has ratified gaming compacts with 75 tribes, and there are currently 66 casinos operated by 63 tribes, according to the California Gambling Control Commission.

Class III gaming activities are allowed so long as an ordinance or resolution is adopted by the governing body of the tribe and is approved by the chairman of the National Indian Gaming Commission, according to the Indian Gaming Regulatory Act. The gaming must also take place in a state that permits it and must be “conducted in conformance with a Tribal-State compact entered into by the Indian tribe and the State.”

This is the second time the Interior Department has disapproved compacts with the Santa Rosa Indian Community of the Santa Rosa Rancheria and the Middletown Rancheria of Pomo Indians – the first time being in November 2021. Back in March, Newsom’s office announced a compact agreement with both tribes with the intention to “support tribal government investment” in law enforcement, public transportation, housing and other infrastructure needs.

In a statement on Monday, Newsom said that the compacts were “carefully negotiated by the state and the tribes in compliance with the Indian Gaming Regulatory Act” to give tribes the “economic benefits of gaming while mitigating impacts to local communities.”

“The disapprovals threaten the ability of these and other tribes to invest and maintain jobs in many of California’s economically disadvantaged communities,” Newsom said.

The compacts were disapproved because they violated parts of the Indian Gaming Regulatory Act, Department of Interior Press Secretary Tyler Cherry told The Center Square in an email.

According to compact disapproval letters sent to the tribes and the state, both tribes developed a “casino resort complex” – meaning they have developed restaurants and hotels that operate beyond the gaming spaces regulated by the Tribe’s Gaming Commission. Raising concern over several definitions contained in the compacts, the department wrote that “the 2022 Compact confers expansive powers on the State and local governments to regulate the Tribe’s activities and lands that are not directly related to the actual conduct of gaming.”

Leaders of the tribes involved in the compacts expressed disappointment with the decision from the Department of Interior.

Leo Sisco, chairman of the Santa Rosa Rancheria Tachi Yokut Tribe, said the disapproval means the tribe will not have resources to the Tachi Palace Casino “that would have created new living wage jobs and benefitted an ailing local economy.”

“Our compact, which has broad support from local and state officials, was the key to improved housing, healthcare, and economic self-sufficiency for our tribe,” Sisco said in a statement. “The chilling effect this decision will have in Indian Country is immeasurable and the financial cost to our tribe will be irreparable.”

Jose “Moke” Simon, chairman of Middletown Rancheria, called the disapproval “shocking,” saying in a statement that “the path forward is now paved with stones that will make it difficult to navigate our tribe’s future.” The Middletown Rancheria of Pomo Indians currently operates the Twin Pine Casino and Hotel.

In an email, the Governor’s Office told The Center Square it will “work with tribes to determine next steps.”

by Madison Hirneisen