In an attempt to reinstitute government control over Indian Gaming operations and generate state revenue, Governor Arnold Schwarzenegger signed four amended compacts last week with separate Memorandums of Agreement (MOA) that some critics speculate are unenforceable

In an attempt to reinstitute government control over Indian Gaming operations and generate state revenue, Governor Arnold Schwarzenegger signed four amended compacts last week with Memorandums of Agreement (MOA) attached that some critics speculate are u

The MOAs place regulation of Minimum Internal Control Standards, rules that govern the way money is handled to ensure the integrity of casino financial operations, in the hands of the California Gambling Control Commission. The transfer of authority comes after the 2005 Colorado River Indian Tribes court decision that ruled the National Indian Gaming Commission did not have authority over Class III Indian Gaming.

“We believe that these MOAs address the issues raised by the CRIT decision,” said Sabrina Lockhart, Schwarzenegger’s press secretary.

However, these MOAs are based on a Connecticut precedent that, to Lockhart’s knowledge, has not been supported by any court ruling. At press time, the Connecticut Division of Special Revenue had not commented on whether its Memorandums of Understanding had been upheld in any court action.

The CRIT court decision ruled against the National Indian Gaming Commission because the Indian Gaming Regulatory Act (IGRA) of 1988 explicitly granted authority of Class III Indian Gaming regulation to tribal-state compacts. IGRA includes no language about right of power or the enforceability of MOAs.

The MOAs stand alone from the compacts and will only be sent to the Secretary of Interior, the federal agent who grants final approval to tribal-state compacts, if the tribes want them to, Lockhart said.

If there is a court dispute over the gambling commission’s authority, a state or federal court could be asked to decide if these MOAs are enforceable under IGRA, without explicit power granted to such agreements.

“[Indian tribes] would probably win,” said Jim Marino, an attorney specializing in tribal gaming issues representing various community groups throughout California. “It’s because they’re not part of the tribal-state compact. And it’s only the tribal-state compact, which is authorized by the Indian Gaming Regulatory Act, so everything the state wants to apply has to be in the compact. I think anything else, some sort of an oddball side agreement or something, is probably not enforceable.”

Lockhart said, “The MOAs…were used to facilitate the ratification of the compacts through the legislature and address some of the issues. We do believe that there is a precedent for this. But in terms of speculating on what could happen, I wouldn’t speculate on hypotheticals.”

If the MOAs are approved, the California Gambling Control Commission would need to create a division to draft, regulate and enforce the Minimum Internal Control Standards (MICS). At this time, the commission has asked for a 14-member body to govern the MICS, said Anna Carr, deputy director and spokesperson for the California Gambling Control Commission.

“We need funding to perform those inspections,” she said. “Without the funding, we’re not going to be able to perform those inspections.” The commission has requested that the money be allocated from the Special Distribution Fund, a fund that a number of gaming tribes contribute to that the legislature is directed to spend on gaming-related expenses.

The amended compacts affect casinos in Palm Springs, Temecula, Rancho Mirage and El Cajon, Calif. The tribes operating the casinos in these cities are the Morongo Band of Mission Indians, Pechanga Band of Luiseno Indians, Agua Caliente Band of Cahuilla Indians and the Sycuan Band of the Kumeyaay Nation respectively. The compacts could increase the total number of electronic-gaming terminals by the thousands with state revenue projected to be $300.1 million in 2008-09, according to Department of Finance estimates from April, 2007.

The compacts currently await approval from the Secretary of Interior.