Judge’s Ruling on Slots Clouds Prop. 5 Debate

A federal judge’s ruling that there are no loopholes in California law allowing the use of slot machines adds another wrinkle to the debate over Proposition 5, the Indian gaming initiative on the November ballot, but will not alter strategy in the high-stakes campaign, both sides said Thursday.

Proponents of Proposition 5 continued to argue that the machines now used at about 40 Indian casinos in California are not slot machines--and that passage of the measure Nov. 3 would legalize the devices anyway.

Opponents countered that if Proposition 5 is approved by voters--allowing the proliferation of Indian casinos without the approval of the governor or Legislature--it will be thrown out by the courts because it is now clearer than ever that the state Constitution prohibits slot machines. They say that only tribes that negotiate agreements with Gov. Pete Wilson should be allowed to operate casinos.

Frank Schubert, manager of the “No on 5” campaign, said U.S. District Judge Garland E. Burrell Jr.’s decision reinforces his faction’s message that Indian tribes can easily avoid the legal problem by simply agreeing to adopt the compacts already negotiated between Wilson and 11 tribes.

“Judge Burrell’s decision shines the light at the end of the tunnel, which is the only escape route for the tribes: to follow the [governor’s] compact process,” Schubert said.

But tribal attorney George Forman said passage of Proposition 5 will establish state law allowing the kinds of machines Burrell says are now illegal--if the machines even are illegal now, which he disputes.

The debate will ultimately be resolved in the courts, if the measure passes, because Proposition 5 would make new state law that appears to conflict with the state Constitution, which takes precedence.

The two sides are collectively pouring tens of millions of dollars into the campaign, which may become the most costly political battle ever waged in California.

At stake for the Indian tribes that have embraced slot machines are hundreds of millions of dollars in annual revenue. Slot machines bring in the vast majority of cash proceeds at such casinos.

Eleven tribes are sidestepping the problem by adopting casino regulations negotiated with Gov. Wilson and ratified by the Legislature. But most of California’s tribes say that they don’t want to abide by Wilson’s rules--including the use of new machines that are not considered slots--and have put Proposition 5 on the ballot in an effort to draft their own, unilateral casino guidelines for voters to approve.

In Sacramento on Wednesday, Judge Burrell tried to wrap up six years of litigation by concluding that slot machines are not permitted in California, and that Wilson is under no obligation to negotiate their use by Indian tribes.

Tribal attorneys say they will appeal his ruling to the 9th Circuit Court of Appeals.

Federal law allows Indian tribes to conduct gambling under whatever rules a state writes for itself--and nothing in California law, Burrell said, allows the use of slot machines.

But Burrell did not specifically find that Indian casinos in California use slot machines. Indeed, no court has yet made that ruling.

The U.S. attorney’s office in Los Angeles has argued in court that the kinds of machines now used in tribal casinos are slots, by both federal and state definition, but no machines have been dissected before a judge for a conclusive ruling.

The reason that two U.S. district judges--one in Los Angeles, another in San Diego--have threatened to close down Indian casinos is not because they are operating illegal slot machines, but rather because they have not signed compacts with the state to legalize their operations, as is required by federal law.

And the reason some of the tribes say that they do not have compacts with the state is because Wilson has argued that their current machines are illegal slots, and will not negotiate with the tribes until they stop using the devices.

The debate has created something of a vicious circle, and regularly comes back to the question of how a slot machine is defined.

By state law definition, a traditional slot machine is a device that features a pull lever and dispenses coins--which none of the machines in California do. But the state law also defines slots as devices with certain internal functions that allow gamblers to initiate bets against a machine that independently generates random results.

The machines proposed by Wilson--and which 11 tribes have agreed to use, once they are developed--are essentially high-speed Lotto and scratch-off games of the type now used in the state lottery.

But confusing the issue, experts say, is that advances in computer technology have made the games almost indistinguishable.

“It’s a major problem in the gambling industry: Technology is blurring the traditional, legal boundaries of what is allowed or not,” said I. Nelson Rose, who tracks gambling issues as a professor at Whittier Law School.