In recent weeks I have written quite strongly about the proposed gaming compact between the state and the Spokane tribe, warning that it could dramatically expand gambling in Washington state, and cautioning Gov. Chris Gregoire about the potential political consequences should she approve it. It is no secret that I am not a fan of the gaming industry. Knowing what I know about the economic, social and emotional costs of gambling addiction, I oppose any expansion of gambling in Washington state.
That said, I had the opportunity Tuesday to speak at length about this issue with Gov. Gregoire’s Chief of Staff Tom Fitzsimmons, and after poring over the details I must admit that the Spokane compact is not as bad as I had at first feared. It will still expand tribal gambling in WA state, but not nearly as massively as initial press reports had suggested.
To understand the compact and its potential impact one must first understand the basic legal principles governing tribal gaming. Federal law states that tribes may engage in the same gambling activities already legal in the state, and that if requested by a recognized tribe, the state must negotiate a governing compact in good faith. Furthermore, unless otherwise waived, each individual tribe retains favored nation status, meaning they have the right to reopen compacts and negotiate the same terms and conditions granted any other tribe in the state.
The existing tribal compacts grant each tribe an allocation of 675 slot machines each, and with one exception (we’ll get to that later) a maximum of two casinos. As has been widely reported the proposed Spokane compact authorizes the tribe to operate up to 4,700 slot machines at as many as five locations. This would appear to set the stage for a massive expansion of tribal gaming as the other tribes reopened their compacts to demand the same deal: more casinos, more slots, more gambling.
Well… not exactly.
While each tribe is allocated the right to own 675 slot machines, some are authorized to operate as many as 2000 at a single facility using machines leased from smaller tribes that do not operate casinos of their own. In fact the number of casinos and machines authorized in the Spokane compact is actually quite similar to the terms of the compact granted the Colville tribe, which is authorized to operate 4,800 machines at as many as six locations.
So why can’t the other tribes use their favored nation status to demand a similar number of casinos and authorized slot machines? Because they can’t meet the same conditions.
Both the Spokanes and the Colvilles have sprawling reservations, and their compacts stipulate that their casinos be located at least twenty-five miles apart. Fitzsimmons implied that no other tribe can meet that stipulation, and thus no other tribe can demand the same deal. (Though looking at the map, I wonder about the Yakimas.)
Where the Spokane compact does depart from previous compacts is the fact that it grants an allocation of 900 slot machines, not 675. The 27 other recognized tribes can reopen their compacts to obtain the same 900 machine allocation, potentially increasing the total number of tribal slot machines statewide by about a third, from 18,225 to 25,200. In fact, that’s the whole point.
See, most of the existing allocation is already spoken for, so by coming to the table late, the Spokanes would otherwise be unable to lease additional slot machines to fill their casinos. They already operate about 500 Las Vegas style slots (illegally), but there is little the state can do to remove them, so there would be no incentive for the Spokanes to agree to a compact that doesn’t give them the opportunity to expand their operations. It’s not the extra 225-machine allocation that makes the deal work for the Spokanes, its the thousands of additional machines that will now be available for them to lease.
In addition to the increased allocation, the Spokanes have negotiated a number of other new goodies into their compact. Currently, slot machines are limited to a maximum $5 bet, but the Spokanes would be allowed to raise this betting limit to $20 on as many as 15-percent of their machines. Existing compacts require that players use coupons or cards to initiate play, but the Spokane compact for the first time permits using US coins and currency. And finally, the Spokanes have negotiated higher betting limits (essentially, none) at five gaming tables in one facility during a specified time period of up to 120 days each year.
Like the higher 900-machine allocation, the other tribes would have the right to reopen their compacts to obtain the same terms.
But… only if they agree to the same conditions. Like other compacts the Spokanes have agreed to pay 2-percent of net receipts into a local mitigation fund, and to contribute another 1-percent to charity. But the Spokanes have also agreed to contribute 0.13-percent to problem gambling treatment and prevention programs (the same contribution now required of commercial card rooms,) and have the option of either contributing an additional 0.13-percent to smoking cessation programs or make all of its facilities smoke free.
So… what does all this mean?
When it comes to the number of facilities and authorized machines, the Spokanes demanded the same sort of deal negotiated by the Colvilles. Given the Spokanes’ favored nation status, the state really couldn’t do anything about that. But this authorization would be totally worthless to the Spokanes without a larger universe of slot machines from which to lease, so while nothing requires the state to bump up the allocation from 675 to 900, there’s a certain irrefutable logic to doing so.
And you can be sure that the 27 other tribes will most definitely reopen their compacts to obtain the higher allocation, even if it means agreeing to the new problem gambling and smoking cessation contributions. Slot machines are the lifeblood of the gambling industry, accounting for the overwhelming majority of casino profits. This is money in the bank.
What the state gets from this is an end to the Spokanes’ illegal operations, relatively uniform compact terms across all 28 tribes — and assuming all the tribes seek the same deal — about $2.6 million a year in additional funding for problem gambling treatment and prevention programs.
Is it worth it?
I’d hate to think that the only way to secure adequate problem gambling contributions is to give the tribes something in return. A handful of tribes already make voluntary contributions, and one would have hoped that all the tribes would have been willing to do their part to mitigate a problem gambling epidemic that is largely one of their own making. Slot machines are by far the most addictive gambling activity — they are scientifically designed to create compulsion — and it bothers me to know that desperately needed problem gambling treatment funds have been negotiated at the expense of a one-third increase in the number of tribal slot machines statewide. But I can’t for the life of me see why the Spokanes would agree to a compact that didn’t increase the number of slot machines available for lease, so at the very least I’m grateful that the state insisted on including the problem gambling contribution as a precondition.
As for the cash-fed machines and higher betting limits, well, it may seem like a quibble, but that’s a departure from existing compacts that I simply cannot support.
Personally, I’d stick with the status quo and reject the compact. Yes, the Spokanes would continue to operate about 500 Las Vegas style slot machines, but without a legal compact they’ll never secure the financing necessary to expand their current operations. Given this context, I can’t help but think that the state has the leverage to cut a better deal.
Still, the deal is not nearly as bad as initial press reports led me to believe, and thus I doubt the political consequences will be as dire as I had at first predicted.