Gov. Gavin Newsom's administration has finalized a new 25-year gaming compact with the Fort Mojave Indian Tribe, a deal that eliminates the tribe's requirement to share a percentage of its future casino revenue with the state. Signed on Monday, the agreement permits the tribe to operate up to two casinos, featuring as many as 1,200 slot machines and other Las Vegas-style games, on eligible trust land in San Bernardino County.
Under the new compact, the Fort Mojave Tribe will primarily reimburse the state for regulatory costs. If the tribe operates more than 350 gaming devices, it will contribute 0.5% of its net win to a local impact mitigation fund. This marks a significant departure from the tribe's previous 2004 gaming agreement, which mandated escalating payments to California's Revenue Sharing Trust Fund and the Tribal Nation Grant Fund, tied to the number of slot machines and gaming revenue.
Critics, including Kyle Kirkland, president of the California Gaming Association, have voiced strong opposition to the new terms. Kirkland stated that the compact represents a continuation of a decades-long trend where tribes are increasingly exempt from sharing gaming revenue with the state. He contrasted this with his own card room, which pays $1 million annually to the city of Fresno, while tribal casinos operating nearby contribute no state taxes.
"What was sold to the California public is very different from what is happening today. It is a scam," Kirkland said. He estimated that California is forfeiting billions of dollars annually, suggesting other states might receive 10% to 50% of slot revenue from similar agreements.
Neither Newsom's office nor the Fort Mojave Indian Tribe immediately responded to requests for comment.
Legal Landscape Shifts
The shift in revenue-sharing requirements is partly attributed to a 2010 Ninth Circuit Court of Appeals decision in Rincon Band of Luiseño Mission Indians v. Schwarzenegger. The court ruled that California could not compel tribes to make general revenue-sharing payments simply for the right to operate casinos, as such payments were deemed an unlawful tax under the federal Indian Gaming Regulatory Act. Financial obligations, the court determined, must be tied to legitimate regulatory costs, mitigation payments, or other permissible considerations.
This legal precedent has reduced California's leverage in negotiating gaming compacts, leading to more recent agreements that largely abandon broad revenue-sharing formulas. However, critics argue that the state still possesses the ability to negotiate stronger financial terms in exchange for gaming rights.
Tribal Operations and Future Expansion
The Fort Mojave Tribe, whose reservation spans California, Arizona, and Nevada, currently operates the Avi Resort & Casino in Laughlin, Nevada, and Spirit Mountain Casino in Arizona. The new California compact would allow the tribe to expand its gaming operations into California for the first time. The agreement permits one casino on existing trust lands and potentially a second on additional land near Needles, provided that land is taken into federal trust and receives necessary approvals.
The compact is subject to ratification by the state Legislature, approval by the U.S. Department of the Interior, and publication in the Federal Register before it can take effect. Tribal casinos nationwide generated a record $46.2 billion in gross gaming revenue last year, according to a report by Casino.org.