In a July 22 letter, Bryan Newland, assistant secretary for the Bureau of Indian Affairs, cited state overreach and continuing problems with the compact language that hadn’t been corrected since issues were first raised last year in a previous compact.
Class III gaming is defined as casino-style gambling. It does not include bingo and non-banked card games.
The Governor’s Office reported that not only had the Department of Interior refused to approve Middletown’s class III gaming compact, but that it had taken the same action — also for a second time — against a class III gaming compact sought by the Santa Rosa Indian Community of the Santa Rosa Rancheria.
Newsom’s office said the compacts were disapproved “arbitrarily.”
“These compacts were carefully negotiated by the state and the tribes in compliance with the Indian Gaming Regulatory Act, providing the tribes the economic benefits of gaming while mitigating impacts to local communities,” Newsom’s office said.
Middletown Rancheria Chairman Moke Simon, who also sits on the Lake County Board of Supervisors, called the Department of Interior’s disapproval of the compact “shocking” because he said the tribe had worked with Secretary Deb Haaland’s department to find “an agreeable middle ground” between the state and federal governments.
“When Gov. Newsom apologized recently to California Indian tribes for its historical mistreatment of tribes, I told him that actions will speak louder than words,” Simon said in a written statement. “Indeed, this new compact is Gov. Newsom’s actions to honor and respect the tribe and its sovereignty. While California has taken great steps forward, sadly, the betrayal we feel from Secretary Haaland is something we have come to expect from the federal government. The path forward is now paved with stones that will make it difficult to navigate our tribe’s future.”
Leo Sisco, chairman of the Santa Rosa Rancheria Tachi Yokut Tribe, said with the disapproval of his tribe’s compact, it will not have the resources to expand the Tachi Palace Casino, which he said would have created new living wage jobs and benefited an ailing local economy.
“The chilling effect this decision will have in Indian Country is immeasurable and the financial cost to our tribe will be irreparable,” Sisco said.
Middletown Rancheria has been operating under a compact negotiated in 1999.
In September, Newsom signed AB 957, a bill authored by Assemblymember Rudy Salas (D-Bakersfield), which ratified a previous version of the tribal compact between the state and Middletown Rancheria.
Newland sent a letter dated Nov. 23 that disapproved that compact, citing numerous problems including provisions that he said Indian Affairs found to be “blatantly in violation” of the Indian Gaming Regulatory Act, or IGRA, and some that he said “seek to impose state control where it does not belong.”
The letter also said that Indian Affairs had repeatedly warned the state that definitions used for "gaming facility" and "project" cause the agency “significant concern because the Compact could be misconstrued to allow the State and its political subdivisions to regulate matters that are not directly related to gaming activities. These definitions are utilized throughout the Compact and result in the direct regulation of the Tribe and the Tribe's businesses and amenities that are ancillary to gaming activities.”
In March, Newsom’s office announced that he had signed new compacts with Middletown Rancheria and the Santa Rosa Rancheria Tachi Yokut Tribe.
A March statement from Newsom’s office explained that the new compacts’ terms “respect the parties’ interest in improving the quality of life of tribal members through a framework that generates revenue for governmental programs, fairly regulates gaming activities, affords meaningful patron and employee protections, and provides thorough environmental review for potential off-reservation impacts.”
Newsom’s office said the compacts were the result of a lengthy negotiation process, considered IGRA and federal court precedent, and included technical guidance, prior compact approvals, and secretarial procedures issued by the United States Department of the Interior.
“The compacts are intended to support tribal government investment in expanded tribal government services, local jurisdictions, and non-profit and civic organizations for improved fire and emergency medical services, law enforcement, public transit, education, housing, environmental protection, tourism and other service and infrastructure improvements. The compacts reflect a commitment by the Tribes to support the Revenue Sharing Trust Fund and the Tribal Nation Grant Fund so that the economic benefits of gaming extend to all tribal governments in California,” the statement said.
That version of Middletown’s compact said the tribe is entitled up to 1,200 gaming devices and can operate not more than two gaming facilities.
The original 1999 compact allowed the tribe to have 350 gaming devices and to apply for more.
The tribe currently operates Twin Pine Casino, which has a reported 500 gaming machines, plus a 60-room hotel.
Newland’s July 22 disapproval letter said the Department of Interior had issued “at least” four guidance letters to the state of California in the past decade “highlighting concern over the State's practice of asserting greater control over tribal land use decisions through class III gaming compacts.”
Despite the “consistent guidance and warning, the State has continued to insist that class III gaming compacts include more stringent and detailed land use regulations that are attenuated from the actual conduct of class III gaming on the casino floor,” Newland wrote.
The new 196-page compact states that Class III gaming can only take place on eligible Indian lands held in trust for the tribe that are located within the boundaries of the tribe’s reservation and certain trust lands.
“In the 2021 Disapproval we explained that tribes often develop businesses which are located near or adjacent to the gaming facility, co-branded and marketed with the gaming facility, and often comanaged by the tribe's business arm. We further explained that ‘[m]utually beneficial proximity, or even co-management alone is insufficient to establish a "direct connection" between the businesses and the class III gaming activity,’” Newland explained in the 12-page July 22 letter.
“As applied to the Tribe's casino-resort Twin Pine Casino & Hotel, the State's definition of Gaming Facility reaches from the very edge of the parking lots to all areas within the buildings including all hotel rooms. Further, this definition — standing alone — likely includes the tribally- owned and operated gas station. The Tribe's gas station, Uncle Buddies Pumps shares a parking lot with the casino and the fuel prices are listed on the casino's sign. In addition, the ambiguity in these definitions increases the potential that the State and municipal governments could impose certain land use requirements on the Tribe in the future,” the letter said.
Newland noted in his letter, “Tribal gaming has proven to be the most successful form of economic development in Indian country in the past century. Many Tribes have used gaming to lift entire communities out of crushing poverty and to develop sophisticated and dynamic governments that rival their state and local counterparts.”
He continued, “In creating the class III gaming compact, Congress effectively provided States with the keys to the gates of Indian gaming. Congress recognized this fact, which is why it also put numerous guardrails in place: the mandate to negotiate in good faith; remedial provisions that apply when a State refuses to negotiate a gaming compact in good faith; a prohibition on State taxation of tribal gaming; and strict limitations on the issues that can be addressed in a gaming compact. Congress also delegated responsibility to the Secretary of the Interior to ensure that each compact stays within these guardrails and complies with the law.”
Newland said he recognized “that the disapproval of a class III compact is a harsh remedy in circumstances like this, and that it is ultimately the Tribe that suffers the greatest consequences of a disapproval. Secretarial disapproval is a blunt instrument, but it is the only tool the Department has at its disposal to protect the balance Congress developed in IGRA. Secretarial disapproval helps to fulfill Congress' goal that Tribes should not have to sacrifice their inherent sovereignty in exchange for the proven benefits of Indian gaming.”
The new compact confers “expansive powers on the State and local governments to regulate the Tribe's activities and lands that are not directly related to the actual conduct of gaming,” Newland wrote. “There is nothing preventing the Tribe, the State, and local governments from negotiating different types of cooperative agreements that promote good governance amongst neighbors. But those agreements must be negotiated on a level playing field outside IGRA's class III compacting process.”
For those reasons, he said he was disapproving the compact.
“Despite the tribes’ efforts to meet with Interior and changes negotiated with the State of California to address concerns expressed by Interior, the Department chose to disregard the interests of the tribes and arbitrarily disapprove the compacts,” Newsom’s office said. “The disapprovals threaten the ability of these and other tribes to invest and maintain jobs in many of California’s economically disadvantaged communities. The State of California will continue working with Santa Rosa Rancheria and Middletown Rancheria to rectify this decision and avoid its negative impacts.”
The development comes as Simon has become the spokesman for Proposition 27, which would allow sports and other gambling through certified gaming tribes and corporate online betting companies, among them, FanDuel and DraftKings, who are helping to fund the measure. Proponents said it would provide funding for housing and services for the state’s homeless population.
A competing measure, Proposition 26, would legalize sports betting in-person at tribal casinos and some horse tracks. The money it raises would be spent based on the state government’s discretion.
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508 Compliant 2022.07.22 Middletown Rancheria Disapproval Letter Tribe by LakeCoNews on Scribd