California Nations Indian Gaming Summer Update James Siva

By James Siva

Just like the weather, the legislative season is heating up in California. As spring turns toward summer, we find ourselves in the thick of the legislative process. Right now, we are following two pieces of legislation that codify our two biggest priorities this year.

On one of these issues, we can already largely declare success. After being at odds with the state over the amount of surplus funds tribes have paid into the Indian Gaming Special Distribution Fund (SDF), a CNIGA-prompted meeting between CNIGA, the Tribal Alliance of Sovereign Indian Nations (TASIN) and Governor Newsom’s office resulted in an agreement to refund approximately $83 million back to the tribes who paid into the surplus. AB 1935, authored by Assemblymember Blanca Rubio is the bill that will codify the agreed upon terms.

The SDF, was originally one of two funds paid into by tribes that was created in the 1999 gaming compacts for the purpose of reimbursing the state for the cost of regulation of tribal gaming, impacts on local communities, Indian Gaming Revenue Sharing Trust Fund backfill, and funding the state’s problem gambling program.

A 2022 CNIGA-requested state audit revealed that the state had accumulated what the acting state auditor termed an “excessive reserve” of the SDF. The reserve currently sits at $162 million and is growing.

The reduction authorized in AB 1935 (Rubio) will still leave the fund with a significant, but far less balance to fund its specified tasks.

AB 1935 is currently making its way through the legislature and has already passed the state Assembly unanimously, and we are hopeful that it will become law by the end of June. This legislation carries an urgency clause, which means that it becomes law upon receipt of the governor’s signature.

Our other priority legislation this year is SB 549 (Newman) the Tribal Declaratory Relief Act, which would give tribes standing in state court to ultimately rule on whether California’s commercial card rooms are offering illegal games. As previously reported in this column, SB 549 stalled out last year in the Assembly Rules Committee but was revived in this year’s session. Capitol sources now tell CNIGA that the bill might finally be heard in the Assembly Governmental Organization Committee soon.

Commercial card rooms have fiercely resisted SB 549. Opposing this legislation, which does not ask the legislature to take any specific action on these games, is telling as the commercial operators do not appear confident in the legality of their games.

It should also be attractive to legislators as it takes a recurrent issue out of their hands and places it where it belongs, in the courts. Failure to obtain clarity on the legality of these games from a court is not fair to tribes, nor is it fair to the voters of California who granted California tribes the exclusive right to house banked card games.

Beyond these two pieces of priority legislation, CNIGA is, as ever, facilitating discussions on other critical topics in Indian Country, including finding ways to increase payments to tribes eligible for the Indian Gaming Revenue Sharing Trust Fund, as well as sports wagering.  We are looking forward to continuing these discussions.

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