California governor allows 2 tribes to expand casinos

Los Angeles (Reuters) – California Governor Arnold Schwarzenegger on Tuesday signed agreements allowing two of the state’s Indian tribes to nearly quadruple the number of slot machines they operate to a maximum 7,500 each.

The new terms sharply increase California’s share of net revenue from the tribes‘ existing slots and gives the state 15 percent of revenue on the first 3,000 additional slots and 25 percent on the next 2,500 machines.

The latest agreements apply to the Pechanga Band of Luiseno Indians, which operates a 2,000-slot-machine casino north of San Diego in Temecula, California, and the San Manuel Band of Mission Indians, which runs a 2,000-slot-machine casino east of Los Angeles in San Bernardino County.

The amended deals would run through 2030.

„These agreements will provide billions of dollars to the state over the life of the compacts, while protecting the environment, local communities, workers and patrons,“ Schwarzenegger said in a statement.

California’s Department of Finance estimated that if the tribes operate the maximum number of slots, the Pechanga deal would generate more than USD 7 billion for the state over its 24-year life and the San Manuel compact would bring in more than USD 7.2 billion.

The finance department also said the agreements would raise the state’s annual income from the Pechanga tribe’s current slots to about USD 42.5 million from USD 27 million, while its income from San Manuel’s current slots would increase to about USD 45 million from USD 19.4 million.

The amended agreements still need to be ratified by the state legislature and approved by the U.S. Secretary of the Interior.

Schwarzenegger had also approved an expansion bid from a third tribe, the Agua Caliente band in Palm Springs, but the amendment was not approved in a vote on Monday by California’s Assembly. A newspaper report said it was not approved because of a dispute over whether workers would be allowed to unionize.

The Assembly will vote again today on the Agua Caliente pact, which would allow the tribe to operate up to 5,000 slot machines, said Schwarzenegger spokesman Darrel Ng.

He said the governor’s office will work with the tribes to get the amended compacts ratified.