OFFICE OF THE GOVERNOR

Governor Schwarzenegger Announces Indian Gaming Agreements

Governor Arnold Schwarzenegger today announced the completion of Indian gaming agreements with the Big Lagoon Rancheria and the Los Coyotes Band of Cahuilla and Cupeno Indians.

"These agreements are a creative solution for avoiding the construction of a casino on California's coast and alongside a State ecological preserve, while respecting the tribes' federal right to engage in gaming," said Governor Schwarzenegger. "These agreements also resolve the Big Lagoon Rancheria's longstanding lawsuit against the State and respond to the City of Barstow's active efforts to bring to that city the economic activity associated with an Indian gaming facility. This is a well-crafted plan that benefits the tribes, the city and all Californians; I commend all sides for their persistence in negotiating a fair solution to a difficult dilemma that has spanned three administrations."

The compacts authorize the Big Lagoon Rancheria of Humboldt County and the Los Coyotes Band of Cahuilla and Cupeno Indians in San Diego County to establish a single, unified casino project in the City of Barstow on a piece of property identified by the City. The City has sought to have a casino located in Barstow and had previously entered into an exclusive arrangement with the Los Coyotes Band to allow for the construction of a casino. As a condition of its compact with the State, the Los Coyotes Band has agreed to share its site in Barstow with the Big Lagoon Rancheria and forgo the right to conduct gaming on its tribal lands in San Diego County.

Big Lagoon Rancheria, in exchange for the right to locate its gaming operations in Barstow, has agreed to refrain from building a casino or any other commercial development on its tribal lands along the coast of northern California. The Big Lagoon Rancheria's lands are adjacent to park land and Big Lagoon, one of the few remaining naturally functioning coastal lagoons in the state. The lagoon is managed by the Department of Fish and Game as an ecological preserve and is part of a fragile coastal ecosystem supporting a diverse species population that includes three species listed under the Federal Endangered Species Act. Big Lagoon Rancheria has long sought to locate a casino along the shore of the lagoon on its tribal lands and has been in litigation with the State over its federal right to seek a gaming compact on those lands for over six years. By arranging for Big Lagoon Rancheria to conduct gaming operations in the City of Barstow, the Administration has brought to an end many years of litigation and ensured that Big Lagoon will be protected for generations to come.

The tribes will provide a revenue contribution to the State based on a percentage of their net win from the operation of both slot machines and banked card games, based on a sliding scale from 16 percent to 25 percent. The Big Lagoon Rancheria estimates that its facility will generate between $86 and $109 million annually in net win over the first seven years. The Los Coyotes Band estimates that its facility will generate a similar amount. Based on these estimates, the State should earn annually between $23 million and $31 million from the unified casino project during the first seven years of operation (including payments to CalTrans).

Under the compacts, the two tribes are required to negotiate separate mitigation agreements with the City of Barstow and the County of San Bernardino. The agreements will cover off-reservation impacts to the environment (including traffic, sewage, and hazardous waste), law enforcement, fire protection, medical emergency services, public safety and gambling addiction. Mitigation agreements with CalTrans with respect to State highways are also required. The tribes have also agreed to a number of important safeguards for both employees and patrons.

The City of Barstow estimates that the casinos could generate 3,700 jobs and $6 million in revenue to the city a year. The State's agreements with these tribes meet all of the criteria outlined in the Governor's Proclamation on Indian Gaming Compacts dated May 18, 2005, including that the City of Barstow does not meet the definition of an "urbanized area" under Public Resources Code section 21071, subdivision (a).

The compacts announced today must be ratified by the State Legislature and approved by the U.S. Secretary of the Interior. The compacts and the legal settlement agreement with Big Lagoon Rancheria are available for viewing by clicking on the links below.

Details of the compacts announced today include:

Big Lagoon Rancheria

• The Big Lagoon Rancheria's lands are located on the California coast at Big Lagoon in Humboldt County and adjacent to the Harry A. Merlo Recreation Area and the Big Lagoon County Park.
• Big Lagoon is a State ecological preserve in Humboldt County managed by the Department of Fish and Game and one of the few remaining naturally functioning coastal lagoons in California, as well as an important part of a fragile ecosystem that functions to support a diverse population of species, including three species listed under the federal Endangered Species Act.
• The Tribe has been in litigation with the State that spans three administrations as it has sought to compel the State to negotiate a compact authorizing a casino on the California coast. However, through the Administration's efforts over the past 18 months, the Tribe has agreed to relocate its casino to the City of Barstow, which has actively sought a tribal casino, and to refrain from any gaming on its lands along the California coast and from any commercial development of those lands, including any commercial lighting that would impact the nighttime visual environment of the Big Lagoon. This relocation to Barstow will be part of a unified casino project with the Los Coyotes Band of Cahuilla and Cupeno Indians which previously made exclusive arrangements with the City of Barstow for a gaming parcel. The Secretary of Interior and the Governor's concurrence under Section 20 of the Indian Gaming Regulatory Act is necessary to effectuate this relocation. A casino project at this site has been supported by the majority of members of the Barstow City Council and the mayor. Public support for the casino project must also be demonstrated pursuant to a fair and scientific telephone survey (as delineated in the compact) or a more reliable polling of public sentiment.
• The compact authorizes the tribe to operate no more than 2,250 slot machines at its facility in the City of Barstow.
• The State will receive, based on a sliding scale, from 16% to 25% of the net win on both slot machines and banked card games. The State will receive 16% of the first $100 million of net win, 20% of amounts between $100 and $200 million in net win, and 25% of net win over $200 million. The Tribe may deduct up to $500,000 of the net win quarterly to cover payments to the City of Barstow to mitigate the effect of the casino's operation. The Tribe's payments to CalTrans are included in the amounts paid to the State since it is a State agency.
• The Tribe has also agreed to pay an annual sum into the Revenue Sharing Trust Fund for the benefit of non-gaming tribes in California beginning in the sixth year of the operation of the gaming facility. Under this provision, the Tribe will pay $200,000 in its sixth year of operation, gradually increasing to $1.5 million in year 11 and each succeeding year until the expiration of the compact. At present, both the Big Lagoon Rancheria and the Los Coyotes Band are eligible to receive distributions from the Revenue Sharing Trust Fund, which will end once the casino project begins operation.
• The Tribe has agreed to an extensive problem gambling program that includes the following: signage at conspicuous locations and ATMs bearing a toll-free help-line for assistance for gambling problems; the availability at conspicuous locations and ATM's of educational materials aimed at preventing problem gambling; prevention of underage individuals from loitering in any areas where there is gambling; responsible gaming messages in advertising, which will make no misleading claims; adoption of a code of conduct derived from that of the American Gaming Association that addresses responsible gambling and responsible advertising; exclusion programs that halt promotional mailings and deny credit and access to patrons who have exhibited signs of problem gambling; and extensive training for the supervisors and gaming floor employees on responsible gaming and identifying and managing problem gambling.
• Patrons may resolve gambling disputes pursuant to binding arbitration before a retired judge.
• Personal injury and property damage claims arising from the casino operation may be resolved pursuant to binding arbitration before a retired judge. The tribe agrees to maintain commercial general liability insurance of no less than $10 million per occurrence for bodily injury, property damage, and personal injury.
• The Tribe also agrees that any construction will meet or exceed the California Building Code and Public Safety Code applicable to the City of Barstow.
• The compact includes a requirement that the Tribe negotiate separate mitigation agreements with the City of Barstow and the County of San Bernardino to mitigate any off-reservation impacts on the environment, law enforcement, fire protection, medical emergency services, public safety, and gambling addiction.
• The compact also requires the Tribe to negotiate a mitigation agreement with CalTrans to mitigate any off-reservation impacts on the State's highway system.
• The compact provides for regulation of the slot machines, like the Governor's other compacts.
• The Tribe agrees to participate in the State workers' compensation and unemployment compensation programs with respect to employees employed at the Tribe's casino. The Tribe has also agreed to comply with all earnings withholding orders for spousal and child support.
• Under the compact, the Tribe's obligation to make payments to the State ceases only if the State authorizes either a non-tribal entity or a tribe that does not have Indian lands in the area to operate slot machines within 40 miles of the Tribe's facility, unless the establishment of a gaming facility for that tribe furthers an independent state public policy (such as preserving the environment in another location in which the tribe agrees to forego gaming), the tribe agrees to make revenue contributions to the State on terms equal to or better than the revenue contribution made by the Big Lagoon Rancheria, and the local jurisdiction approves the facility by at least a two-thirds vote.
• The Tribe agrees to adopt federal and state workplace and occupational health and safety standards and to the enforcement of state standards by the applicable state agencies. Casino employees will have the right to organize and to strike.
  

Los Coyotes Band of Cahuilla and Cupeno Indians

• The Los Coyotes Band of Cahuilla and Cupeno Indians is located in San Diego County.
• The Los Coyotes Band already entered into a municipal services agreement with the City of Barstow in October 2004 in order to construct a casino on parcels identified and agreed by the City. The Tribe has also agreed to share its site with the Big Lagoon Rancheria as part of a unified casino project.
• The Tribe has agreed to forgo any gaming on its lands in San Diego County.
• The Compact has provisions that parallel the State's compact with Big Lagoon.