New North Fork casino compact would exempt it from tribal payments

The North Fork Mono Indians, who have tried for years to build a casino at a 305-acre site near Madera, have a new proposed gaming compact awaiting approval from federal Department of the Interior officials that could finally launch the project. But opponents say that new compact would give the North Fork tribe a multimillion-dollar break.

Unlike a state-approved compact that California voters rejected in 2014, the new compact would give the North Fork tribe a seven-year reprieve from paying millions of dollars into the Revenue Sharing Trust Fund that supports non-gaming tribes. And North Fork would not have to pay a Northern California tribe that had agreed to set aside its own gaming ambitions.

Those provisions have sparked a sharp reaction from the North Fork’s main tribal opponent, the Picayune Rancheria of Chukchansi Indians, who operate Chukchansi Gold Resort & Casino near Coarsegold that would compete with the Madera casino.

John Peebles, Chukchansi’s lawyer, says the North Fork tribe is being hypocritical.

“They are a tribe that depended on the Revenue Sharing Trust Fund for 20 years, and the first chance they get, they jettison everybody else,” he said.

Opposition to the revenue sharing exemption is the latest flashpoint over the Madera-area casino plan.

The North Fork Rancheria and partner Station Casinos want to build a gaming complex with 2,000 slot machines, 40 table games and a hotel on 305 acres along Highway 99 near Avenue 18 just north of Madera. The facility would be similar to Chukchansi Gold Resort & Casino near Coarsegold.

In 2012, Gov. Jerry Brown approved a compact with the North Fork tribe that included revenue sharing with other non-gaming tribes, payments estimated at $3 million to $5 million annually to the Wiyot tribe near Humboldt Bay in Northern California in exchange for giving up their gaming ambitions, and payments to the Chukchansi tribe to compensate for revenue losses resulting from the Madera casino.

But two years later, California voters rejected the compact in Proposition 48, a referendum backed by the Table Mountain and Chukchansi tribes, as well as Chukchansi’s financial backers.

In November 2015, as the North Fork tribe tried to get its gaming compact back on track, a federal judge ordered that the compact be sent to a mediator. In February, the mediator selected the tribe’s proposed compact over the governor’s.

Brown didn’t ratify the compact supported by the mediator, which left approval up to the federal Department of the Interior.

Despite the mediator’s decision, the North Fork tribe’s casino faces other challenges. Stand Up For California, the backers of Proposition 48, and other tribes have sued. And last month, a bill was introduced in Congress to prevent the federal government from approving any “off-reservation” tribal gaming facility defeated in a state referendum or not approved by a state Legislature.

Last week, Madera County supervisors went on record opposing the congressional bill, which is sponsored by Rep. Doug LaMalfa, R-Richvale, and co-sponsored by Rep. Jeff Denham, R-Turlock.

Hypocritical tribe?

The Revenue Sharing Trust Fund is designed to pay non-gaming tribes and those tribes with fewer than 350 slot machines a portion of revenue so all tribes can benefit from tribal gaming. Chukchansi pays about $3 million into the fund annually. Payments are based on the number of licensed machines.

The North Fork Mono’s compact says the tribe will be exempt from paying into the trust fund for seven years and then must pay 2 percent of gross gaming revenue from its gaming machines beginning in the eighth year. Gaming machines make up about 80 percent of all revenue, gaming analysts say.

The tribe’s estimates for revenue were about $54 million. Other outside estimates put revenue anywhere from $100 million to more than $200 million.

The North Fork tribe is entitled to operate up to 2,000 gaming machines during the first two years the casino is open but can go as high as 2,500 machines afterward, the compact says.

Peebles, the Chukchansi lawyer, said Brown essentially concurred with the mediator’s compact by not opposing it. Instead, he could have insisted that it go back before the state Legislature, Peebles said.

Table Mountain officials, who were a major source of funding in 2014’s referendum to stop the North Fork Casino compact, refused comment on the latest version of the compact.

A governor’s spokesman said that Brown didn’t return to negotiations willingly.

“We entered negotiations only after being ordered to do so by a federal court, and our goal during negotiations was to work with the tribe to develop terms that would protect the interests of Californians,” said Gareth Lacy, a governor’s spokesman.

“We proposed to abide by the state ratification process, which includes consultation with and approval by the Legislature, but the mediator chose a process that is inconsistent with the state constitution and the right to referenda,” Lacy said. “That was … the reason we did not concur with the mediator’s proposal and why the compact was not ratified.”

Dollars at stake

Under the 2012 compact approved by the governor, the Chukchansi tribe would get money from the North Fork tribe to compensate for casino revenue losses. Chukchansi officials say a study commissioned by the tribe shows that Chukchansi Gold Resort & Casino would lose 38 percent of its revenue if the North Fork casino is built.

North Fork officials say that stopping the compact will not prohibit gaming, which can be done without slot machines on the tribe’s land, but it would affect payments the tribe will make to the county.

“The North Fork tribe willingly entered into the gaming compact negotiated with Governor Brown in 2012 and ratified by the state Legislature in 2013,” said Maryann McGovran, the tribe’s chairwoman. “That compact contained more rigorous provisions than the ‘so-called’ 1999 compacts under which most tribes operate, but was challenged by our opponents through referendum.”

Failure to support the new compact, she said, would reduce Californians’ protections for employees, patrons and the environment.

McGovran added that interference and obstruction by wealthy gaming tribes fearing competition will undermine the state’s participation in regulating gaming, jeopardize local financial arrangements in Madera County and non-gaming tribe payments. It will also reduce jobs and economic benefits for the community.

The tribe estimates the project will create 750 construction jobs and 1,500 casino jobs.

Madera County government agencies are not affected by the new compact and will still get about $5 million annually to improve public services. Chukchansi is paying $1 million to the county for police services, $1.3 million for a large-laddered fire truck, and it also pays into a fund for local nonprofits.

The exemption for North Fork doesn’t concern Madera County Supervisor Tom Wheeler. Later this year, he said, supervisors will begin negotiations with the Chukchansi tribe because their agreement expires next year.

“We are going to ask them for the same thing as we’ll get from North Fork,” he said.

This story was originally published May 8, 2016 at 7:46 PM with the headline "New North Fork casino compact would exempt it from tribal payments."