The Spokane Tribe feels compelled to respond to today’s news article in the Seattle Post Intelligencer, “GOP Leaders Call For Gregoire Inquiry.”
First, it is a fallacy to suggest that a compact with any one tribe will become the compact with other tribes. Therefore, it is a fallacy to suggest that by agreeing to revenue sharing with Spokane, that other tribes would agree to similar revenue sharing.
A case in point, California’s Governor Schwarzenegger was just recently called to the carpet and found to be negotiating in “bad faith” by the federal court for demanding that the Rincon Band pay revenue sharing to the State. The Federal Court specifically noted that the State’s entering into revenue sharing agreements with other Tribes do not allow the State to demand the same terms from Rincon.
…this Court finds that the revenue sharing insisted upon by the State violates [IGRA], which prohibits states from taxing tribes. Accordingly, the Court finds that the State’s insistence on the payment of such a large fee to its general fund in return for concessions of markedly lesser value was in bad faith in the light of the prohibition against taxation set forth in the Indian Gaming Regulatory Act.
Rincon Band v. Schwarzenegger, Order issued on April 29, 2008, DK # 04-CV-1151 W (WMc)
Second, the revenue sharing agreement with the Spokane Tribe did not come without a price to be paid by the State. In exchange, the State of Washington would have agreed to the most restrictive exclusivity provision of any compact in the country, not even allowing for State regulatory agencies (the Washington State Gambling Commission, the Racing Commission and the Lottery) to expand non-Indian gaming with their existing statutory authority.
Third, as a matter of federal law, there is a serious question as to whether the State must give up even more. The federal Indian Gaming Regulatory Act prohibits a State from using compact negotiations to extract a tax from tribal gaming revenue:
“Except for any assessments that may be agreed to under paragraph (3)(C)(iii) of this subsection, nothing in this section shall be interpreted as conferring upon a State or any of its political subdivisions authority to impose any tax, fee, charge, or other assessment upon an Indian tribe or upon any other person or entity authorized by an Indian tribe to engage in a class III activity.”
25 U.S.C. § 2710(d)(4). To justify revenue sharing, the State must give the Tribes something of meaningful value over and above what the State is obligated to include in a gaming compact. Indeed, the federal court found Schwarzenegger’s demand to be “illegal.”
Fourth, it is a fallacy to suggest that the Spokane Tribe’s compact could have resulted in $140 million to the State. The actual rate that Spokane would have paid is approximately 9%, if it’s professional “best case” revenue projections were correct. The 35% figure is an impossible hypothetical for the Eastern Washington gaming market. It was included in the compact, in part, to preclude the possibility that Western Washington Tribes would trigger the “most-favored-nation” provisions in their then-existing compacts.
Fifth, the opposition who voiced concern over the announcement of the first Spokane Compact included conservative republicans that denounced the policy behind revenue sharing. It is odd that the current accusations are coming from the same political camp – emphasis on the “political.”
I am also troubled by the popular notion of state "revenue sharing," which was also included in the proposed Spokane compact. While the idea of requiring tribal governments to share their gaming revenue with state government is appealing on the surface, I think it would place state government in a conflicted position as a business partner with the tribe.
Norman Maleng, Letter to Governor Gregoire, October 28, 2005
What would the state have gotten in exchange for all that? A cut of the profits from the Spokanes' new gaming empire - and deeper state dependence on gambling money. No thanks.
Tacoma News Tribune Editorial, November 2, 2005
Sixth, the opposition that voiced concern over the announcement of the first Spokane Compact came from all quarters, including several republican members of the Legislature, not just from other Tribes. Some argued against revenue sharing, others argued against hurting non-Indian gaming competition, others argued against the level of expanded gaming. It is fallacy to suggest that the Governor asked the Spokane Tribe to go back to the negotiation table just because of the concerns raised by other tribes.
Seventh, the Spokane Compact was fully vetted by the Legislature and the Washington State Gambling Commission, including its ad hoc members of the Legislature. The process was transparent and followed the letter of the law drafted and enacted by the Legislature. The only possible reason for this development to occur at this time is political hackmanship.
Finally, The Spokane Tribe stands behind the compact it has with the State of Washington. It settled legal disputes over the scope of gaming that spanned nearly two decades. Many seem to forget that the federal courts rejected efforts by Washington State and the United States to shut down the slot machines operated by the Spokane Tribe. The compact includes legitimate revenue sharing provisions for local government, smoking cessation and problem gambling, and provides a reasonable regulatory structure to ensure the honesty and integrity of the games. Tribal/State compact negotiations are a complex and multi-layered process. There is give and take on both sides and agreement is often difficult to reach. Washington State stands out as one of the best regulated Indian gaming industries in the country and the Spokane Tribe is proud to stand with Governor Gregoire to defend the compact.
