State of the Tribal Nations Speech, 2023 Western Indian Gaming Conference
State of the Tribal Nations Speech, 2023
Western Indian Gaming Conference
Sycuan Casino Resort
February 14, 2023
CNIGA Chairman James Siva:
Good morning and welcome to the 26th annual Western Indian Gaming Conference. It is one of the great privileges of my life to serve this incredible association as Chairman and I am extremely honored to stand before you to report that the State of the Tribal Nations in California is STRONG.
Despite the numerous challenges of the past 3 years, California tribes have demonstrated once again that we are as resilient as ever. Emerging from the COVID-19 pandemic that shook the state, nation and world, tribal communities have again proven strong in the face of adversity, just as our ancestors had over previous struggles. I am here to report that we are still here, still standing strong and still at the ready to continue to improve our tribes and local communities.
Our industry is expanding as we recently saw the opening of two new tribal facilities. First, the Elk Valley Casino, which took the place of the tribe’s original casino will provide for endless opportunities for the tribe and the local community. Elk Valley is the second largest employer in their area, second only to the Pelican Bay State Prison located nearby. (Recognizes Elk Valley Chairman Dale Miller). And most recently, Wilton Rancheria’s Sky River Casino opened on the site of a half-built shopping mall outside Sacramento that was abandoned during the recession over a dozen years ago. The emergence of a tribal gaming establishment on that site is a prime example of our resilience. (Recognizes Wilton Chairman Jesus Tarango).
Our organization keeps growing and just yesterday, we added five new member tribes. I’d like to welcome the Alturas Indian Rancheria, Big Sandy Rancheria of Mono Indians, the Colusa Indian Community, the Karuk Tribe and the Yocha Dehe Wintun Nation to our organization, bringing our total membership to 47 federally recognized tribal governments. Our collective strength continues to grow.
That collective strength was apparent last November with the defeat of Proposition 27, which would have given out-of-state commercial gaming interests control over online sports wagering in California. Proposition 27 was officially opposed not only, by the majority of tribes and tribal organizations in California, but also a stunningly large coalition from across the political spectrum. This initiative suffered one of the widest defeats in California history and should serve as a cautionary tale to those that attempt to enter the California gaming market without working directly with tribes.
Tribes are by far the better entities to offer sports wagering in California than out-of-state commercial, for-profit corporations. We have a proven track record of operating well-run and well-regulated gaming establishments, and we are inherently rooted in California.
And unlike those out-of-state commercial groups, we also have a proven record of positive impact in the Golden State. While I was hoping to give a specific list of economic impacts from tribal government enterprises, the pandemic delayed the latest economic impact report. Our most recent figures from last decade show $7.8 billion in economic output, $5 billion added to the California economy and $3.3 billion in earnings by California workers. Those numbers have undoubtedly grown. While the current numbers are still being crunched, the positive impact on local communities is indisputable.
According to the California Employment Development Department, collectively California tribal governments provided over 63,000 jobs, that’s up from roughly 57,000 a year earlier, a net gain of nearly 6,000 jobs. To emphasize that number and add a point of comparison, that’s more jobs than the telecommunications sector employs in California.
It’s not only the large number of jobs that tribes provide, but also where those jobs are located. Most of them are in rural areas and smaller towns, away from the state’s more job rich urban centers. Tribes have been here since time immoral and are tied to our respective lands, we will not pick up and move to another state if the economy shifts. This reality guarantes employment opportunities in some of California’s poorest and most rural communities.
Despite our long track record of providing good quality jobs, excellent compensation, and a safe work environment, the Unite HERE labor union continues to make false claims about our employment practices to the California State Legislature. Since 1999 labor unions have been given unprecedented organizing rights which are outlined in our tribal state gaming compacts. In fact, Unite HERE has attended every ratification hearing for every tribal state gaming compact since 1999 and has expressed support for the ever-encroaching labor provisions included in those agreements. No other sovereign is forced to accept these types of mandates.
Can you imagine the state of Nevada telling California what it’s labor rules should be? The very idea is preposterous. However, I want to make it clear . . . Tribes are not anti-labor. We care about our employees. We value our employees. Many tribes, including my own the Morongo Band of Mission Indians have gone above and behind for our employees and continue to do so. For example, during the Covid pandemic, we voluntarily closed our casino properties for the first and hopefully last time. We kept employees on salary and provided health insurance while we remained closed. This action demonstrates the significance we place on our employees and this value is shared by many tribes throughout California. Moreover, many tribal governments have opted into contracts with labor unions, including Unite HERE. These contracts, for the most part, have been the result of respectful discussions between the tribal government and union representatives. Despite these successes, Unite HERE continues with their misinformation campaign in the hopes of forcing our employees into union contacts they do not want or need. This is unacceptable. We have and will continue to protect our employees and our sovereign rights and will fight the increased overstepping of state law into tribal operations.
That very concept is currently being affirmed by the courts. In the 2021 case Chicken Ranch Band of Me-Wuk Indians vs. Newsom, federal judge Anthony Ishii held that the state of California had overstepped its authority in forcing certain provisions onto tribes via the compacting process and, as a result, negotiated in bad faith. This past year, that decision was upheld by the 9th U.S. Circuit Court of Appeals. While many of the provisions the state is insisting upon are noble in intent, they are, once again, outside the acceptable parameters of what is allowed under the Indian Gaming Regulatory Act. For decades the state of California has made demands of tribes that violate the Indian Gaming Regulatory Act. While this inappropriate behavior has been obvious from the tribal perspective, we are pleased that the Eastern District and the 9th Circuit Court of Appeals agree.
Our status as sovereigns means that we negotiate with other sovereigns as equals. Concessions to us must be meaningful and all negotiations with another sovereign must always be in good faith.
It appeared, for a while, that the U.S. Department of Interior agreed with us as well. The appointment of Deb Haaland, the first American Indian to serve in the position of Interior Secretary, a position that had previously ranged from hostile to neglectful of tribal people, was and still is a true reason to celebrate.
Though, recent actions by the Department have left us a bit confounded. After twice rejecting compacts for containing provisions the Department characterized as state overreach, the Department changed directions and affirmatively approved materially similar compacts, an approval action rarely used. Now, to be clear, this is not to criticize any individual tribe as we believe that tribes have the right to negotiate a compact that best suits the needs of their government. Rather, this is about an inconsistent and outright contradictory message coming from the federal government as to how they will interpret the Indian Gaming Regulatory Act, which clearly spells out what can and cannot be included in compacts. Unfortunately, we might never know what happened as Secretary Haaland has refused to meet with this association to clarify her reasoning for such an about face. All of this is all too reminiscent of the past maleficence of officials that tarnish our history with the federal government.
However, there is light at the end of this very long tunnel. Following the recent court rulings, the state and the tribes included in the Chicken Ranch litigation submitted their last best offer for a compact to the court appointed mediator, who was required to select from the two proposed compacts, the one which best comports with the terms of IGRA, any other applicable federal law, and with the findings and order of the Ninth Circuit Court of Appeals. I am happy to announce that on February 1st, the mediator selected the tribes’ last best offer. I would like to congratulate the Blue Lake Rancheria, Chicken Ranch Rancheria of Me-Wuk Indians, Chemehuevi Indian Tribe, Hopland Band of Pomo Indians, and Robinson Rancheria on this significant victory and look forward to assisting all tribes in obtaining fair compacts that operate within the confines of the law.
We are hoping for similar progress on fixes to problems revealed by a CNIGA-requested audit of the Indian Gaming Special Distribution Fund, done at the behest of the California Joint Legislative Audit Committee. That audit shows widespread mismanagement of the fund by the state of California.
For those that don’t know, the Special Distribution Fund, or SDF is one of two funds into which certain gaming tribes pay. The fund has specific legally prescribed uses, which is now clear that the state has violated. Specifically, one of those uses is to fund the “actual and reasonable” cost of regulation.
Yet, a prior audit revealed that, over a four-year period, the state had misappropriated funding from the SDF for 27,000 hours of employee regulatory work on the state’s commercial card rooms, a use that is not among the SDF’s legal scope of permitted activities. Keep in mind that the average Californian works approximately 1,900 hours a year. So in a four year period of time, the Bureau of Gambling Control misappropriated the equivalent of almost 14 full time employees. And that is not even the most egregious of the findings.
In fact, the 2022 audit reported that the Bureau of Gambling Control continues to charge the SDF for non-tribal activities, but because of opaque practices to account for employee hours at the Bureau, the audit was unable to determine just how much. This is entirely unacceptable.
The mismanagement was spelled out in the initial document of the report. In his opening letter to the governor and legislative leaders, Michael Tilden, the acting state auditor wrote: “In our office’s audit of the management and use of the Indian Gaming Special Distribution Fund, we determined that the state has not effectively managed the distribution fund, and it has allowed the fund to accumulate an excessive reserve.”
In fact, the “excessive reserve” had grown to $127 million last June, which is enough to fund the state’s tribal regulatory activities for four years. Far more than is needed and far more than is recommended by the Government Finance Officers Association, who recommend that general purpose governments maintain a minimum fund balance of two months. Even with this excessive reserve, the state continues to bill tribal governments for the cost of regulation.
While it is unfortunate that the state couldn’t have simply followed the law, CNIGA is engaged in discussions with elected officials to begin to remedy problems with the handling of the SDF. Toward that end, a CNIGA-sponsored bill, AB 553, co-authored by Assemblymembers James Ramos and Eduardo Garcia will seek to address the misuse of staff time. Also, last week we put out an invitation to Attorney General Rob Bonta to further discuss remedies.
During this morning’s general session, we will have a panel that will explore the audit findings as well as discuss the steps being taken to address the gross mismanagement uncovered.
But before I move on from the audit findings, I am compelled to mention the funding tribes provide via the SDF for all state programs designed to address gambling addiction.
This is a provision that tribes themselves added to our compacts. Tribal people know all too well about the ravages that addiction can cause. It is why we have, and always will be committed to providing a safe and healthy gaming environment. Today, through our tribal-state gaming compacts, tribes are paying $8.2 million annually to the state of California for problem gambling prevention and treatment. The commercial, for-profit card rooms? They pay a mere $180,000 annually. Yes, that’s correct just $180,000 total from a multimillion-dollar commercial gaming industry. That is just $100 per year per table. This is simply unfair.
Speaking of fairness, we are calling on State Attorney General Rob Bonta to enforce the law at these commercial, for-profit card rooms. 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, which grants tribes the exclusive rights to these games. Now, with the state moratorium on card room expansion lapsing at the beginning of this year, the danger currently exists for a major expansion of illegal gaming in California.
This is why, CNIGA, as a legislative priority, is supportive of AB 341, authored by Assemblymember James Ramos that would create a new moratorium. While we would much rather the state enforce the laws against illegal gaming before entering into negotiations for any time of expansion at cardrooms, the failure of the state to extend the moratorium last year, leaves us with little choice but to act now.
However, we need to stand firm in our negotiations and not let an extension of the moratorium be used as an endorsement of their continued illegal practices. Tribes have been good partners with the state government and its subsidiaries, and we deserve the same level of respect. All we are asking is that the basic standard of law is applied and not arbitrarily employed when it suits a current officeholder or some special interest. I say that not to call out any individual in government, but rather to call attention to systemic problems that serve to deprive tribes of legal protections written into the law for all to see. The state has created a Truth and Healing Council to right the wrongs of the past. In that spirit, we call on the state to deal fairly with tribes and obey the law written in the Indian Gaming Regulatory Act when negotiating compacts, obey the law written in the California Constitution by shutting down illegal games at commercial establishments, and obey federal law in proper uses for the Indian Gaming Special Distribution Fund.
We are the Original people of California. We were here before this land was known as California, we are still here now, and we will continue to be here moving into the future. This reality provides a sense of stability and grounding for all Californians. That is why it was of the highest importance to us when we began to offer gaming to ensure that it was well run and well regulated. Our establishments aren’t mere businesses, rather they are central to our communities, and thus places that reflect our values. We seek to be good neighbors and provide benefits within the surrounding community. We just ask the state to be good neighbors in return.
One thing that has always been apparent is that when we work together, we can not only overcome adversity but triumph. The defeat of Proposition 27 showed our strength and sent a message that our industry remains strong. It is strong because we have worked hard to earn the trust of the people of California as good stewards of the gaming industry in this state. We need a similar unity of purpose to ward off threats that negatively impact us all. We will continue to endure because that is what we do and that is who we are.
Yet, in order to thrive, we must continue to work with one another and build on our successes. I call upon all tribal leaders in the state to join with us in the continued protection of our sovereign rights. The best protection of Tribal Sovereignty is the enactment of Tribal Sovereignty and that is the fundamental core of what this association was created to do. I deeply thank the 47 tribal governments that make up the CNIGA membership for their efforts over the past several decades. You have made us who we are. In unity our future is bright and there is no limit to what we can achieve together.
Thank you for your time and welcome to the WIGC!