California Nations Indian Gaming Update James Siva

Following, please find the State of the Tribal Nations Speech, 2024, at the Western Indian Gaming Conference, Pechanga Resort Casino, February 20, 2024, General Session by CNIGA Chairman James Siva:

Good morning and welcome to the 27th annual Western Indian Gaming Conference. It is truly great to be back here at Pechanga. I want to extend our appreciation and thanks to Chairman Macarro and the Pechanga Band of Indians for hosting WIGC this year. Additionally, a huge congratulations goes out to Chairman Macarro on being elected NCAI president and bringing a California tribal perspective to the position.

Each year as I prepare for this report, I look back on the year and try to identify pivotal points, both good and bad, that are shaping our industry and directly affecting the lives of Indian people.

I am extremely happy to be able to report that, through our partnership with Beacon Economics, a leading economic research firm in California, we are in the process of finalizing an Economic Impact Study regarding the economic and fiscal impacts of tribal government gaming on the state of California, which will be formally released in April. I would like to thank all the tribes that agreed to participate in this study, without you we could not have put this together.

While the full study won’t be reported until April, we have a few topline numbers to preview:

California Tribal Government gaming generated approximately $17.2 billion in economic output, supporting more than 85,200 jobs overall statewide, resulting in 5.3 billion dollars in earnings for California workers.

These are impressive numbers and speak directly to the positive impacts tribal government gaming is having on our people as well as the communities that surround our lands. Tribal casino operations provide a crucial source of employment in communities in which jobs are otherwise scarce. We, as tribal people, understand the importance of a strong workforce and that by providing good paying jobs in a healthy environment. We know the positive impact we are having on our local communities and working families. Now we have the numbers to prove that our claims cannot be disputed.

Our operations play a significant role in producing tax revenue for various levels of government. In 2021 tribal gaming operations across the state generated $2.2 billion in tax revenue, while tribal non-gaming operations generated $832.1 million.

Many of you in the audience may be questioning tax figures. Yes, tribes generate and collect tax revenue for the state, local, and federal governments. Of the $2.2 billion collected, state and local governments received $1.1 billion in tax revenue that was used towards social programs, public safety and infrastructure.

Growth Continues for Tribal Gaming in California

As evidenced in these figures, our industry keeps growing. For examples of that growth, I want to recognize the Tejon Indian Tribe that has broken ground on their first gaming facility, which is set to open in October of next year. There are also significant expansions of existing facilities happening with the Tuolumne Band of Miwok Indians, who recently expanded their Black Oak Casino, as well as Graton Rancheria whose expansion will add approximately 144,000 square feet to their existing facility, including a new 5-story hotel with over 200 rooms, a 500-seat theater and larger parking structure. Last year I reported that the Wilton Rancheria had successfully opened their Sky River Casino and this year I am excited to report that the tribe has purchased 20 acres adjacent to their facility for a planned expansion. North Fork Rancheria reached a milestone in their long quest to build a tribal gaming facility near Madera and is expected to break ground later this year. The new facility will feature a 100,000 square-foot casino with dining and beverage options. Up in Del Norte County on the north coast, Elk Valley Rancheria recently broke ground on a new gas station and convenience store.

With all this positive growth in Indian Country I am thrilled to report that CNIGA also continues to grow. In the past year we’ve added five additional member tribes, bringing our membership to 52 tribal governments. CNIGA is the largest regional gaming association in the country and our collective strength continues to grow with every new member. In addition to our member tribes, we have built a strong and engaged associate membership. Led by Chris Creasy of Suffolk Construction, our associate members program stands at 53. We thank you all for your support of the association and your dedication to the tribal gaming industry. I urge our member tribes to use our associate members as our preferred providers list as each of these companies have gone above and beyond to support the association and our efforts to protect tribal sovereign rights.

Looking Back – the CNIGA Mission

Our mission at CNIGA is to preserve and protect the sovereign right of tribes to offer gaming on our lands. This is our purpose, and this must be our goal as we continue to grow and expand our industry. As we speak of growth and future developments. I want to take a step back and look back down the road we have traveled.

In 1999 when negotiating compacts with the state of California, tribal leaders some of whom are in this room today, debated, discussed, and in some instances fought over what the future of tribal government gaming would be. While there were many priorities and central issues in these talks, one of the highest importance, was the idea to create a fund to share gaming revenues with non-gaming tribes. At the time, this was the first such revenue sharing in all Indian Country and California leaders took mass criticism from Tribal leaders from other states for including these provisions in our compacts. However, California leaders stayed united in their goal to guarantee a share revenue with those who were not able to engage in tribal gaming. That dedication still exists today.

Since its inception, the Revenue Sharing Trust Fund or RSTF has collected nearly 1.5 billion dollars. Let me say that again 1.5 billion dollars! This is money that benefits non-gaming and limited gaming tribes. While this is no small number, let me be clear in stating that CNIGA’s membership is committed to strengthening the RSTF and finding ways to increase revenue for non-gaming tribes.

The RSTF talks are ongoing at CNIGA, and we are committed to finding a solution that works for all tribes. The spirit of tribes helping tribes is evident throughout time and now must be no different.

The RSTF is not the only state administered fund paid by tribes that needs to be addressed. The Special Distribution Fund, or SDF, was also originally 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, RSTF backfill, and funding the state’s problem gambling program.

As I reported last year, two state audits, one done at the behest of CNIGA in 2022, revealed widespread mismanagement of the fund by the state. Among the problems found in the audits were that the state had misappropriated funding from the SDF for 27,000 hours of employee regulatory work by the Bureau of Gambling Control on the state’s commercial card rooms, a use that is not among the SDF’s legal scope of permitted activities, and a massive reserve that far exceeds standard recommended practices for such a fund.

The SDF reserve fund, which the acting state auditor termed “excessive” has currently grown to $162 million, which is enough to fund the state’s tribal regulatory activities for more than four years. This exceeds recommendations by the Government Finance Officers Association who advise to maintain a minimum fund balance of two months. Despite the growing surplus, the state continues to bill tribal governments.

Protecting Tribes and Tribal Gaming

I am very pleased to report that CNIGA made significant progress toward addressing the improper use of SDF monies with the passage last year of CNIGA-sponsored legislation, in the form of AB 553, co-authored by Assemblymembers James Ramos and Eduardo Garcia, which requires the Bureau of Gambling Control to implement time tracking software and procedures by June of 2025 and begin conducting regular quarterly audits in 2026. Thank you to all who put in your time and effort to help us pass this important piece of legislation. But the work is not done! AB 553 was just the first step in numerous issues and recommendations made by the State Auditor.

The next step relating to the SDF is to stop the bleeding of tribal money into the fund! To this end, we have begun working on draft bill language that will put in place a moratorium on payments into the SDF. CNIGA is holding ongoing meetings with tribal stakeholders and the state to ensure we can bring this bill into reality and help keep tribal dollars in tribal hands.

Tribes are making incredible progress in asserting our rights when it comes to proper subjects contained in tribal-state gaming compacts. Recently, a mediator appointed by the U.S. District Court after granting the Tribes’ respective motions for summary judgment has ruled that the compacts proposed by the Bear River Band of the Rohnerville Rancheria, the Cachil Dehe Band of Wintun Indians of the Colusa Indian Community, the Cahuilla Band of Indians and the Soboba Band of Luiseño Indians, and not those proposed by the state, best conform with the Indian Gaming Regulatory Act (“IGRA”) and other applicable federal laws. This comes after eight arduous years of negotiations with the state. If the state rejects these latest compacts, it will go to the Department of Interior who will then issue secretarial procedures.

This comes on the heels of a huge victory in the Chicken Ranch Band of Me-Wuk Indians vs. Newsom case whose 2022 appellate decision upheld a 2021 judgement in favor of the five tribes involved with that case.

Specifically, the court ruled that the state had clearly overstepped its bounds by demanding things outside its rightful scope. On January 31st the Chicken Ranch Rancheria of Me-Wuk Indians, the Chemehuevi Indian Tribe, Blue Lake Rancheria, Hopland Band of Pomo Indians, and the Robinson Rancheria signed Secretarial Procedures with the Department of Interior. Due to issues raised in the SDF audit and the failure of the state to properly account for its regulation of tribal government gaming operations, these Procedures remove the state of California from any regulatory authority over these tribes’ gaming operations. For years tribes have been forced to accept terms in their compacts that are outside of the scope of IGRA. I am ecstatic that these brave tribes stood up to the state and fought for tribal sovereign rights. This was a huge victory, not only for the individual tribes, but for Indian Country as a whole.

Next Steps for Progress

Now, not all our recent legal and legislative efforts have been successful. One important bill, SB 549, the Tribal Declaratory Relief Act, stalled in the legislature last year but has been revived in this year’s session. SB 549 is a simple piece of legislation that authorizes a single court action to determine whether certain controlled games operated by California commercial card clubs are banking card games that violate California law and infringe upon tribal exclusivity. That’s it.

This single court action would resolve a decade-plus dispute between tribes and card clubs and give legal clarity moving forward. For too long, the state has looked the other way, while commercial card rooms have ramped up offerings of Class III house banked card games in blatant violation of the California Constitution. But more importantly for tribes in this room these actions violate our exclusive right to offer those games and by extension is an infringement of our collective Tribal Sovereignty.

Tribes have unsuccessfully tried for several years through multiple attorneys general and stalled legislative pushes to settle the matter, to no avail. Tribes have taken the legal route but were rebuffed by the courts who ruled that tribes lacked standing to sue. As such, the merits of the tribal case against the commercial cardrooms have never been adjudicated on the merits of the arguments.

Commercial cardroom interests have marshaled their forces against this bill, which to me is very telling. Why would they not want to have their day in court if they are so sure what they are doing is legal? Why are they afraid? To be clear, there is risk for tribes in this bill as a decision in our favor is not a preordained outcome. Yet, we would finally have legal clarity, and so would the cardrooms, and so would the general public. Without it, this issue will go on, the violation of our exclusivity will remain, and the diminishing of our sovereignty will continue. SB 549 offers a way out of this uncertainty and offers a clear legal path going forward for both tribes and cardrooms.

Last year, when I stood at the lectern to deliver this speech, tribes had emerged triumphantly from a political battle to stop commercial operators from gaining control of sports wagering with one of the largest defeats in California voting history.

Unfortunately, it was what seemed like mere months before another surprising group of outsiders filed two new sports betting initiatives, in a cynical attempt to enrich themselves and divide tribes in the process. These initiatives attempted to use the tribes’ good names to cleanse illegal offshore gambling corporations with an appalling track record of malfeasance.

Begins and Ends with Tribes

We are pleased to report that the backers of these initiatives saw the widespread tribal opposition and realized that there was no path forward. These failures should serve as warning to others that seek to enter the California gaming market without first consulting with tribes. Using tribes for your own personal gain will get you nowhere. Tribes will not be ignored or dictated to. Decisions driving the future of tribal governments will be made by tribal governments, not outsiders who think they know what is best for tribes. To be crystal clear, any discussion or decision on the expansion of gaming in California begins and ends with tribes. Period!

Since 2018 CNIGA has been actively discussing and planning for the legalization of some form of sports wagering and that work has never stopped. California’s tribal governments are moving with a data driven strategic approach that includes what is best for California tribes and our surrounding communities. We will not be deterred and will not be forced to move in a manner that is detrimental to tribal sovereignty.

A Place for Critical Discussions

Though consensus is difficult, I believe we can attain it. CNIGA is the place for leaders to have these discussions, and I always strive to make sure it is a place where everyone can be heard and respected, even when we disagree. Especially when we disagree. It must be us, as tribes, who make these decisions and form our own destiny. For too long, non-Natives have divided and exploited us for their own gain. No more.

The path forward is long and there is much work to do. We must continue to have an open and demanding dialogue. A dialogue that forces us to be honest with others and ourselves. We must continue to fight for what we know is right, and we must do this without fear. Too often fear can cause us to make decisions that are contrary to our hearts. The solutions are ultimately within our reach. Yet, we can only do these things if we are unified, not in every detail, but rather united in purpose. A purpose that is clear and collective. We have so much that’s within our grasp. Now is the time to put our collective minds together and chart a path that benefits all tribes. It’s all there for us if we want it, but the only way we will get the future we envision is if we work together.

Thank you!