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February 27, 2002

Host: Michael Grant
Topic: New outline for Indian Gaming;
Legislative Update
In-Studio Guests: Scott Thomsen, Associated Press staff reporter; Steve Hart, Director of the Arizona Department of Gaming;
David LaSarte, Executive Director of the Arizona Indian Gaming Association.

 

Michael: TONIGHT ON "HORIZON," ARE MORE SLOT MACHINES COMING TO URBAN-AREA CASINOS? A NEW OUTLINE FOR INDIAN GAMING COMPACTS IS SETS THE STAGE. AND WE'LL FILL YOU IN ON BUDGET TALKS AT THE CAPITOL IN OUR LEGISLATIVE UPDATE. GOOD EVENING. I'M MICHAEL GRANT.

Michael: ARIZONA LAWMAKERS MAKING SOME PROGRESS ON A BUDGET FIX. THE SENATE HAS BEEN FINE TUNING AMENDMENTS TO LEGISLATION PROPOSED TO RESOLVE THIS YEAR'S BUDGET WOES. WHEN WILL THE HOUSE BEGIN TO WRESTLE WITH THE COMPROMISE BILL? HERE TO UPDATE US, SCOTT THOMSEN, ASSOCIATED PRESS STAFF REPORTER. SCOTT, WHAT DID THE SENATE DO TODAY? HAVE THEY MOVED IT YET?

SCOTT THOMSEN: THE SENATE HAS NOT MOVED THE BILLS YET BUT TODAY THEY SPENT WORKING ON THE AMENDMENTS THAT THEY'LL INTRODUCE TOMORROW. THEY'RE GOING TO TAKE THE HOUSE BILL THAT'S BEEN PASSED AND MAKE THEIR CHANGES ON THAT BILL. THEY'LL VOTE ON IT TOMORROW, SEND IT BACK OVER TO THE HOUSE. THE HOUSE IS UNLIKELY TO TAKE THE THING UP PROBABLY UNTIL MONDAY.

Michael: NOW, THE ESSENCE OF THIS AS I UNDERSTAND IT IS IT PRESERVES MOST OF THE PAY INCREASE FOR MOST STATE EMPLOYEES, CORRECT? IN ITS BROAD PARAMETERS?

SCOTT THOMSEN: THAT'S A VERY SUCCINCT WAY OF PUTTING IT. IT SETS CAPS FOR THE BEST PAID STATE WORKERS AND IT DECREASES THE MINIMUM FOR THE LOWEST PAID STATE WORKERS. PUTS THE TIME FRAME BACK JUST A LITTLE BIT BUT MAKES SURE THAT MAJORITY OF FOLKS IS GOING TO SEE A RAISE.

Michael: THE PROBLEM WITH THAT BEING, HOWEVER, IT DOESN'T PROVIDE THE SAME KIND OF JUICE HEADING INTO WHAT YOU HAVE REFERRED TO AS THE TOWERING INFERNO AND THAT BEING TRYING TO BALANCE THE '03 BUDGET.

SCOTT THOMSEN: THAT'S RIGHT. THIS IS THE BONFIRE. NEXT YEAR IS THE TOWERING INFERNO IN TERMS OF TRYING TO CHOP APART ALL OF THESE PROGRAMS TO GET DOWN TO A BALANCED BUDGET. AND THE PAY RAISE WAS AN ISSUE THAT THE DEMOCRATS DREW A LINE IN THE SAND FOR. AND THIS EVEN REPRESENTED A LITTLE BIT OF GIVE ON THE SENATE DEMOCRAT'S PART IN ORDER TO TRY TO REACH A COMPROMISE. THERE ARE ENOUGH FOLKS IN THE SENATE WILLING TO GO ALONG WITH THIS AS THE BEST DEAL THAT THEY CAN CUT. SOME OF THE CONSERVATIVES STILL DON'T THINK THERE ARE ENOUGH HARD LYING CUTS THIS YEAR TO MAKE WHICH IS GOING TO LEAVE THE '03 BUDGET THAT MUCH HARDER TO BE GET PASSED. AND EVEN UP. BUT THIS IS THE DEAL THAT MOST OF THE FOLKS THINK THEY CAN GET DONE.

Michael: AND AGAIN, OWING AT LEAST IN PART TO THE 15/15 SPLIT IN THE SENATE, THEY HAVE GOT SOME TRUE BARGAINING POWER HERE BECAUSE THE PAY INCREASE IS IN LAW EFFECTIVE APRIL 1. YOU COULD PLAY A WAITING GAME AND SIMPLY STALL EVERYBODY OUT.

SCOTT THOMSEN: EXACTLY. AND THAT'S PROBABLY ONE OF THE BIGGEST FRUSTRATIONS HERE FOR THE REPUBLICANS, PARTICULARLY THE HOUSE REPUBLICANS WHO -- THEIR LEADERSHIP DOES NOT LIKE THIS DEAL. IF THE HOUSE PASSES THIS, IT IS GOING TO BE BECAUSE OF THE DEMOCRATS OVER THERE AND THE MODERATE REPUBLICANS. AND THE QUESTION IS WHETHER THEY HAVE 31 VOTES TO DO IT. LEADERSHIP, AMONG THE CONSERVATIVE REPUBLICANS, DOES NOT LIKE TO STEAL. THEY BELIEVE THAT THERE NEEDS TO BE A LOT MORE HARD CUTS MADE. BUT THEY'RE ACCUSTOMED TO BEING THE MAJORITY AND BEING ABLE TO PASS THINGS OUT AND HAVING THE DEMOCRATS COME AND ASK THEM FOR THINGS THAT THEY WANT. IN THIS INSTANCE, THE ROLES ARE REVERSED. THE DEMOCRATS HAVE WHAT THEY WANT ALREADY PASSED AND THEY'VE GOT 15 VOTES IN THE SENATE. THEY CAN STOP STUFF. SO, IF THE REPUBLICANS DON'T PLAY BALL, THE DEMOCRATS CAN JUST SIT THERE AND -- AFTER APRIL 1st, THE PAY RAISE GOES INTO EFFECT.

Michael: SCOTT, PLACING THE PAY RAISE ISSUE TO ONE SIDE, ARE THERE SUBSTANTIVE CUTS ELSEWHERE HERE TO GET TO THE $200 MILLION OR SO BOGEY?

SCOTT THOMSEN: THE TARGET SEEMS TO BE IN LINE WITH WHAT THEY'VE BEEN SHOOTING FOR BUT THEY HAVEN'T RELEASED ALL OF THE DETAILS AS TO WHAT'S GOING TO BE IN IT. WE'RE HEARING THE DEMOCRATS HAVE ADDED ADDITIONAL CUTS INTO WHAT THEY WERE PRESENTING EARLIER. AND HARD CUTS IN THIS BUDGET YEAR. SO, THAT IS ANOTHER AREA WHERE THEY HAVE GIVEN A LITTLE BIT OF GROUND WHERE THEY HAVE TAKE AN LITTLE BIT HARDER HIT TO PROGRAMS THAN WHAT THEY WERE LOOKING AT.

Michael: OK. SO, BEST EXPECTATION, PERHAPS MIDDLE OF NEXT WEEK BY THE HOUSE?

SCOTT THOMSEN: WELL, THE FASTEST THAT THE HOUSE COULD DEAL WITH IT IS GOING TO BE TOMORROW AFTERNOON. BECAUSE THEIR FLOOR SESSION IS LATE ENOUGH IN THE DAY THAT THEY COULD TAKE IT UP. THAT'S UNLIKELY. MOST LIKELY, THEY'LL START TO DO IT EARLY NEXT WEEK. COULD DO IT MONDAY. COULD DO IT TUESDAY. I WOULDN'T EXPECT IT TO DRAG ON BECAUSE THIS IS THE ISSUE THAT SPEAKER WEIERS HAS PUT OUT THERE. THIS IS WHAT WE NEED TO BE WORKING ON. IF THERE IS A BILL, IF THERE IS A PROPOSAL THAT'S ON THE TABLE, YOU KNOW, THE HOUSE MEMBERSHIP IS GOING TO WANT TO VOTE ON IT.

Michael: YOU GOTTA GET ON WITH IT. SCOTT THOMSEN, ASSOCIATED PRESS, THANKS VERY MUCH.

Michael: GOVERNOR HULL, AND ARIZONA TRIBES HAVE OUTLINED NEW GAMING COMPACTS, LANDMARK AGREEMENTS SKETCHES OUT NEW TENURE COMPACTS FOR TRIBAL CASINOS. IT WOULD ALLOW TRIBES TO DOUBLE THEIR SLOT MACHINE COUNT AND WOULD ALSO LEGALIZE BLACKJACK. THE NEW ACCORD WOULD ALSO BRING REVENUE TO THE STATE TO THE TUNE OF ABOUT $83 MILLION A YEAR. HERE IS A RECAP OF THE NUMBER OF CASINOS IN THE STATE AND WHERE THEY ARE LOCATED PLUS A COMPARISON OF SOME FACILITY AND SLOT MACHINE ISSUES BETWEEN THE CURRENT AND THE NEW PROPOSED PACTS.

Reporter: THERE ARE 21 TRIBAL CASINOS IN ARIZONA. SIX IN URBAN AREAS. THE AK-CHIN TRIBE IN MARICOPA, THE FORT McDOWELL TRIBE IN FOUNTAIN HILLS, THE SALT RIVER PIMA MARICOPA HAS TWO IN SCOTTSDALE AND THE GILA RIVER TRIBE HAS THREE IN SACATON, JUST SOUTH OF CHANDLER. HEADING NORTH, WILL YOU FIND THREE CASINOS, THE TONTO APACHE TRIBE IN PAYSON, THE YAVAPAI APACHE NATION IN CAMP VERDE AND THE YAVAPAI TRIBE HAS TWO CASINOS IN PRESCOTT. TO THE EAST, TWO. THE WHITE MOUNTAIN APACHE TRIBE IN WHITERIVER AND THE SAN CARLOS APACHE TRIBE IN SAN CARLOS. SOUTH, THE PASCUA YAQUI TRIBE HAS TWO IN TUCSON AND THE TOHONO O'ODHAM NATION HAS THREE. AND THREE UP AT CALIFORNIA STATE BORDER. THE COLORADO RIVER INDIAN TRIBES IN PARKER AND THE KETCHEN INDIAN TRIBE IN YUMA AND THE COCOPAH TRIBE IN SOMMERTON. THERE ARE 38 AUTHORIZED FACILITIES RANGING FROM TWO TO FOUR PER TRIBE UNDER THE KURT GAMING COMPACTS. THAT NUMBER WOULD GO DOWN TO 29 AUTHORIZED FACILITIES. THERE ARE NOW 16 FACILITIES IN GREATER PHOENIX AND TUCSON AREAS. THAT NUMBER WOULD GO TO 12. THE OVERALL NUMBER OF SLOT MACHINES IN THE STATE WOULD NOT CHANGE AT 14,675. BUT THE LIMIT PER FACILITY WOULD GO UP RANGING FROM 645 TO 998. RURAL TRIBES WOULD BE ABLE TO SELL UNUSED SLOT RATIONS 20 URBAN TRIBAL CASINOS.

Michael: JOINING ME NOW TO TALK MORE ABOUT THE NEW PROPOSED COMPACTS, STEVE HART, DIRECTOR OF THE ARIZONA DEPARTMENT OF GAMING. ARE YOU BREATHING A SIGH OF RELIEF AT THIS POINT? THIS IS A TWO YEAR PROCESS?

STEVE HART: OVER TWO YEARS. A GRUELING PROCESS, YOU KNOW. NEGOTIATIONS, THAT'S WHAT THE FEDERAL LAW REQUIRES AND SO THAT'S WHAT WE DID. 17, 20 LAWYERS IN A ROOM WORKING THROUGH THE ISSUES. TOUGH PROCESS.

Michael: LET ME TRY TO GET THIS CLEARLY ON THE TABLE AND THEN WE CAN KICK AROUND SOME OF THE PROS AND CONS OF IT. FIRST OFF, BLACKJACK IS AUTHORIZED BY THE TRIBES. WHY?

STEVE HART: WELL, RIGHT NOW, THE TRIBES HAVE THE RIGHT TO DO CLASS TWO CARD GAMES WHICH IS A GREAT VARIETY OF POKER AND OTHER NONBANK GAMES INCLUDING VERSIONS OF BLACKJACK OR 21, JUST NONHOUSE BANK VERSIONS. THAT LIMITS AREN'T ANY. STATE INVOLVEMENT IN REGULATION, THERE ISN'T ANY. SO, WHAT WE'VE TRIED TO DO IS PUT LIMITS ON EVERYTHING IN THE COMPACT INCLUDING CARD GAMES. AND NOW, THE STATE WILL BE INVOLVED IN THE REGULATION. WE'LL HAVE LAW ENFORCEMENT RESOURCES TO ASSURE PUBLIC SAFETY. THERE WILL BE TABLE LIMITS IN PLACE. THERE WILL BE BET LIMITS IN PLACE. THAT'S THE REASON WHY.

Michael: STEVE, WHAT DO YOU SAY TO SOMEBODY WHO SAYS HOLD IT! THAT'S REALLY A MAJOR CHANGE IN STATUS QUO. NOW THE TABLE GAMES ARE -- OR OTHER TABLE GAMES LIKE ROULETTE, CRAPS, STILL OFF THE TABLE IF YOU'LL PARDON THE EXPRESSION. BUT BLACKJACK REALLY MOVES US TO A BIGGER, AND A MUCH DIFFERENT ARENA. WHAT'S THE RESPONSE TO THAT?

STEVE HART: WELL, IT WILL GO OUT TO THE CASINOS. THERE'S 21 GAMES GOING ON NOW. YOU KNOW, THE MOST IMPORTANT THING WE THINK IS THAT THESE CARD ROOMS BE WELL REGULATED AND THAT WE KNOW FOR THE 10 OR 20 YEARS THIS COMPACT WILL GO ON, WHAT THEY'RE GOING TO LOOK LIKE, HOW BIG THEY'RE GOING TO GET AND WE HAVE CONTROL OVER THAT PROCESS.

Michael: KEY POINT NUMBER TWO, THE NUMBER OF MACHINES STATEWIDE AUTHORIZED REMAINS THE SAME. BUT THAT'S A LITTLE DECEPTIVE BECAUSE ALL OF THOSE ARE NOT IN PLAY BUT WHAT HAPPENS HERE IS, FOR EXAMPLE, UNUSED ALLOTMENTS ON THE NAVAJO TRIBAL RESERVATION AND OTHERS CAN BE TRANSFERRED INTO, FOR EXAMPLE, THE PHOENIX AREA. WHAT'S THE REASON FOR THAT?

STEVE HART: WELL, THE PRINCIPAL REASON FOR THAT IS A WAY TO MOVE GAMING REVENUE TO TRIBES LOCATED IN RURAL AREAS. ONE OF THE PROBLEMS WITH INDIAN GAMING, THE TRIBE HAPPENS TO BE WITHIN AN HOUR OR TWO OF THE PHOENIX OR TUCSON METROPOLITAN AREA AND THEY GENERATE STRONG REVENUES. IF IT'S HOPI OR KAIBAB OR A NUMBER OF OTHER TRIBES, IN MORE REMOTE AREAS, THIS DEE RECEIVE ANY BENEFIT AT ALL. WE WERE LOOKING FOR A WAY TO PRESENT OPTIONS FOR THOSE TRIBES, FOR THEM TO BE INVOLVED IN ECONOMIC DEVELOPMENT WITHOUT BEING INVOLVED IN GAMING. THAT'S WHAT THIS CREATES. THEY CAN TRANSFER UNLIMITED NUMBER OF MACHINES TO THE TUCSON OR PHOENIX KIND OF METRO TRIBES, SOME OF THE OTHER TRIBES AS WELL BUT THOSE ARE PRIMARILY THE AREA WHERE THERE IS THE MARKET AND IN EXCHANGE, THEY CAN RECEIVE MILLIONS OF DOLLARS A YEAR FOR THE COMPACTS.

Michael: LET'S STICK WITH THE PHOENIX AREA BECAUSE IT GETS COMPLICATED WHEN YOU TOSS IN TUCSON. THE NUMBER OF FACILITIES REMAINS THE SAME IN THE PHOENIX AREA. I WANT TO SAY THAT'S ABOUT SEVEN. STEVE HART: THAT'S RIGHT. IT IS ABOUT SEVEN TODAY. IT IS SEVEN TODAY AND FOR THE LENGTH OF THIS COMPACT, 20 YEARS, THAT'S THE NUMBER OF CASINOS THAT WILL BE IN THE GREATER PHOENIX METRO AREA.

Michael: BUT THOSE EXISTING CASINOS CAN JUST ABOUT DOUBLE IN SIZE, RIGHT? IN TERMS OF THE NUMBER OF SLOTS AS A RESULT OF THIS EXCHANGE PROCESS THAT WE'VE TALKED ABOUT.

STEVE HART: THAT'S RIGHT. YOU GO FROM APPROXIMATELY 500 PER CASINO TO IN THE RURAL AREAS MAYBE 645 IN THE PHOENIX AREA, 998, SO, 1,000. WHEN YOU LOOK AROUND THE COUNTRY, NEW JERSEY, NEVADA, MISSISSIPPI, DETROIT, CASINOS ON THIS, BIG CASINOS, 2,000, 3,000 MACHINES. EVEN AT THIS LEVEL, THIS IS STILL A MEDIUM, SMALL KIND OF CASINO.

Michael: REVENUE SHARING. THERE IS A STAGE, THE PERCENTAGE MOVING FROM SMALL TRIBES, SMALL TAKE TO LARGE TRIBE, LARGE TAKE KEEPING IN MIND THAT THAT'S NOT NECESSARILY A TRIBE COMPARISON BUT URBAN VERSUS RURAL. HAVE I GOT THAT ABOUT RIGHT?

STEVE HART: YEAH. IT IS BASICALLY A REVENUE-DRIVEN FORMULA. IF REVENUES GET ABOVE A CERTAIN FIGURE, A PERCENTAGE TAKE GOES UP.

Michael: HOW CONFIDENT IN THE NUMBER OF 83, $85 MILLION ANNUALLY CAN WE BE?

STEVE HART: THE PROJECTIONS ARE JUST THAT. THEY'RE PROJECTIONS, NOT GUARANTEES. BUT WE USE THE BEST GAMING ECONOMIST REPORTEDLY IN THE COUNTRY OUT OF THE UNIVERSITY OF NEVADA. HE FELT THAT THESE WERE CONSERVATIVE AND SOLID PROJECTIONS.

Michael: HOW DO WE KNOW WE'RE GETTING THE RIGHT CUT OF THE TAKE? HOW DO WE KNOW THAT THE TRIBES REPORT ACCURATELY TO THE STATE? THIS IS WHAT WE TOOK IN SO WE OWE YOU $4 MILLION OR WHATEVER THE CASE IS.

STEVE HART: THESE ARE WELL REGULATED CASINOS TODAY. WE WORK HARD WITH THE TRIBAL GAMING OFFICES AND THE REGULATION WILL BE ENHANCED DURING THIS NEXT SET OF COMPACTS AND THERE'S SOME IMPORTANT ADJUSTMENTS THAT HAVE BEEN MADE THAT GO TO THOSE ISSUES. FIRST OF ALL, THERE'S AUDIT THAT ARE DONE ON A REGULAR BASIS OF THE CASINOS BY OUTSIDE ACCOUNTANTS. ADDITIONALLY, UNDER THE COMPACTS, WE'LL HAVE A COMPREHENSIVE COMPLIANCE REVIEW AUDIT THAT WILL GO ON EVERY YEAR. THE DEPARTMENT OF GAMING STAFF WILL BE IN THE CASINOS WORKING THROUGH THEIR BOOKS, WORKING THROUGH THEIR RECORDS. WORKING THROUGH THEIR INTERNAL CONTROLS TO MAKE SURE THEY'RE IN COMPLIANCE WITH THE COMPACT AND THE INTERNAL CONTROLS WHICH WILL BE ANOTHER ENHANCEMENT TO THE COMPACT. ADDITIONALLY, WE'RE GOING TO HAVE A COMPUTER MONITORING SYSTEM. IT WILL BE STATE-OF-THE-ART WHICH WILL ALLOW US ON A REALTIME BASIS TO KNOW HOW THOSE MACHINES ARE PERFORMING ANY DAY OF THE WEEK, ANY TIME OF THE DAY.

Michael: THIS IS ALL OF THEIR MACHINES OR A SAMPLE OF THAT POPULATION?

STEVE HART: WHAT HAPPENS IS IN THE CASINOS AND UNDER THIS COMPACT, THEY'RE REQUIRED TO HAVE ON-LINE ACCOUNTING SYSTEMS SO EVERY ONE OF THEIR MACHINES REPORTS TO AN ON-LINE ACCOUNTING SYSTEM AND MUST REPORT TO THE ON-LINE ACCOUNTING SYSTEM. AND THEN WE, IN TURN, HAVE AN ELECTRONIC CONNECTION TO THAT SO IN REALTIME, WE CAN GET THAT SAME INFORMATION.

Michael: OK. STEVE HART, STAY THERE. INDIAN GAMING REGULATORY ACT PASSED BY CONGRESS IN 1988 AT THE TIME, TRIBES WERE BEGINNING TO OPEN CASINOS BUT THERE WERE NOT YET GAMING COMPACTS IN OUR STATE. TENSIONS WERE GROWING BETWEEN STATE OFFICIALS AND THE TRIBES OVER THAT ISSUE. REPORTER MERRY LUCERO TAKES A LOOK AT THIS PIVOTAL TIME IN THE HISTORY OF ARIZONA INDIAN GAMING.

Reporter: BINGO, ESPECIALLY LOVED BY SENIORS, HAS A LONG HISTORY IN ARIZONA AND IN THE LATE '80s, SOCIAL GAMBLING CLUBS IN URBAN AREAS WERE POPULAR. IT WAS DURING THIS TIME THAT SOME INDIAN TRIBES WERE TRYING TO ESTABLISH CASINOS ON THEIR RESERVATIONS.

Mark Flatten: WE USED TO HAVE BINGO FOREVER AND EVER. THE TRIBES CONCLUDED WE'RE SOVEREIGN HERE. WE CAN BRING IN SLOT MACHINES. AND THEY STARTED CONTRACTING WITH SOME OF THE MORE SHADY PROVIDERS BECAUSE THEY WERE THE PEOPLE WILLING TO WORK THE MARGINS THERE. YOUR MORE TRADITIONAL GAMING COMPANIES.

Reporter: THIS IS THE CONFLICT THAT LED TO THE INFAMOUS STANDOFF AT THE FORT McDOWELL CASINO IN 1992. TRIBUNE REPORTER MARK FLATTEN WAS THERE.

STEVE HART: THE TRIBE WAS INSISTENT THAT THEY COULD HAVE THE MACHINES OUT THERE. THE STATE WAS INSISTENT THAT THEY COULDN'T. EVENTUALLY, THE FBI CAME IN AND INTERVENED AND SAID NO, FOR INTERPRETATION, THE MACHINES ARE ILLEGAL AND THEY SEIZED THEM. THEY TRIED TO SEIZE THEM. WHAT HAPPENED WAS THE FBI CAME IN AND GOT INTO THE BUILDING. GOT THE MACHINES. BUT THE INDIANS OF FORT McDOWELL CONCLUDED THAT THE FBI SHOULDN'T BE ALLOWED TO TAKE THEM OUT.

Reporter: THE INDIANS SET UP A BLOCKADE WITH TRUCKS AND HELD HANDS ACROSS THE ROAD. TRIBAL MEMBERS WERE FURIOUS AT THE MACHINES' REMOVAL. I KNOW WHAT THEY WANT. THEY CAN HAVE THE AMERICAN FLAG. THEY CAN HAVE IT. I'M TAKING THE FLAG OFF OF HIS BACK. THIS ISN'T JUSTICE. THEY CAN HAVE IT. TAKE IT.

STEVE HART: IT WAS PRETTY CLEAR THIS COULDN'T GO ON FOREVER. I MEAN, THIS WAS A TRUE BLOCKADE OF THE CASINO AND THE FBI COULDN'T GET THE MACHINES OUT. THE INDIANS WEREN'T LETTING PEOPLE COME IN TO REMOVE THE MACHINES. AND FOR A WHILE THERE, IT WAS A PRETTY VOLATILE STANDOFF. NOW WE LOOK BACK AND THINK OH, WELL, IT WAS JUST SORT OF A P.R. SHOW BUT AT THE TIME, I MEAN, THAT WAS SOME SERIOUS THOUGHT OR CONCERN THAT THIS COULD TURN INTO ANOTHER WOUNDED KNEE TYPE SITUATION. I MEAN IT WAS VERY VOLATILE.

Reporter: GOVERNOR SYMINGTON ARRIVED TO TRY TO RESOLVE THE CONFLICT TOGETHER WITH FORT McDOWELL CHAIRMAN CLINTON PADILLA. IT FORCED SERIOUS NEGOTIATIONS.

GOVERNOR SYMINGTON: I DON'T PROMISE YOU ANY MIRACLES. AS YOU KNOW, THIS IS NOT JUST THE STATE OF ARIZONA. THIS IS ALSO A FEDERAL ISSUE, THE FEDERAL GOVERNMENT AS WELL. BUT WE'RE DETERMINED TO RESOLVE IT AND I HOPE THAT YOU ALL WILL HELP US RESOLVE IT BY ALLOWING THE TRUCKS TO PASS. AND WE CAN DIFFUSE THE SITUATION.

Reporter: THE FBI LEFT AND 300 GAMING MACHINES STAYED BEHIND. LOCKED IN MAYFLOWER TRUCKS.

Mark Flatten: SO, IN THIS SORT OF FRANTIC ATMOSPHERE, SYMINGTON TRIED TO BROKER'S DEAL. HE MET WITH THE LEADERS OF FORT McDOWELL. AND ESSENTIALLY TRIED TO NEGOTIATE AN ARRANGEMENT WHEREBY WE CAN RESOLVE THIS ISSUE AND EVENTUALLY, START HAVING SOME REALISTIC COMPACT TALKS ABOUT IF WE'RE GOING TO HAVE THESE, LET'S GET SOME STATE REGULATION. LET'S GET SOME AGREEMENTS. LET'S GET SOME REALISTIC PARAMETERS.

Reporter: FRANK GORDON WAS ASKED TO ISSUE A LEGAL OPINION ON INDIAN GAMING. HIS, LIKE MUCH PUBLIC SENTIMENT, EMPATHIZED WITH THE IMPOVERISHED TRIBES.

Mark Flatten: THE PROPERTY OF THE TRIBES. YOU CAN'T BLAME THEM FOR TRYING TO BRING THIS KIND OF ECONOMIC DEVELOPMENT AND GORDON ESSENTIALLY CONCLUDED THAT THERE WAS ENOUGH GRAY AREA IN THE LAW TO WHERE WE HAD TO ENTER MEANINGFUL NEGOTIATIONS WITH THE TRIBES ON GAMING.

Reporter: THE GAMING COMPACTS THAT WERE NEGOTIATED THEN HAD A TEN-YEAR TIME LIMIT. NOW, THE PRESSURE IS ON TO RENEGOTIATE THEM.

Michael: NOW JOINING MYSELF AND STEVE HART, DIRECTOR OF THE ARIZONA DEPARTMENT OF GAMING IS DAVID LaSARTE, EXECUTIVE DIRECTOR OF THE ARIZONA INDIAN GAMING ASSOCIATION. TRIBES PLEASED WITH THE COMPACTS?

David LaSarte: ABSOLUTELY. IT HAS BEEN AN INCREDIBLY LONG PROCESS. TWO AND A HALF YEARS. ARIZONA INDIAN GAMING ASSOCIATION HAS 17 TRIBAL GOVERNMENTS INVOLVED IN THESE NEGOTIATIONS. EVERYTHING FROM THE METRO TRIBES, THE RURAL TRIBES, NAVAJO, THE LARGEST TRIBE IN THE STATE. WE HAVE THE WHOLE UNIVERSAL TRIBAL GOVERNMENTS INVOLVED IN THIS AND AT THE END OF TWO AND A HALF VERY, VERY LONG YEARS, WHAT WE HAVE A REASONABLE SOLUTION. THAT IS THE RESULT OF GOOD FAITH NEGOTIATIONS BETWEEN GOVERNMENTS AND ABSOLUTELY, WE'RE HAPPY WITH THE RESULT AND LOOK FORWARD TO TRYING TO MOVE IT FORWARD.

Michael: SPEAKING OF RURAL TRIBES, OBVIOUSLY THE COLORADO TRIBE HAS ANNOUNCED AN INITIATIVE TO PLACE A MUCH MORE AGGRESSIVE GAMING SCENARIO ON NOVEMBER'S BALLOT. HAS THERE BEEN ANY INDICATION FROM THE COLORADO TRIBE AS TO THEIR REACTION TO THESE ANNOUNCED PACTS AND WHETHER OR NOT IT IMPACTS THOSE PLANS AT ALL?

David LaSarte: THE OTHER TRIBES HAVEN'T HAD ANY RECENT DISCUSSIONS WITH COLORADO RIVER. THEY VOLUNTARILY LEFT OUR GROUP EFFORT TWO YEARS AGO. SO, WE HAVEN'T HAD ANY COMMUNICATION WITH THEM. WHAT WE FEEL THOUGH IS BASED ON HOW MANY TRIBES WE DO HAVE INVOLVED AND THE UNITY WE HAVE AMONGST THE TRIBES THAT HAVE CHOSEN TO PARTICIPATE IN THESE CIRCUMSTANCES -- IN THESE NEGOTIATIONS, WE HAVE A FAIR SOLUTION FOR ALL THE TRIBES. WE HOPE THAT COLORADO RIVER WOULD COME BACK AND JOIN OTHER TRIBES AND TRY TO MOVE TO A REASONABLE SOLUTION BUT AS OF NOW, NO, WE HAVEN'T HAD ANY CONVERSATIONS WITH THEM.

Michael: HAVE THE OTHER TRIBES HAD ANY DISCUSSIONS AS TO WHETHER OR NOT THEY WOULD GO SO FAR AS TO OPPOSE A COLORADO TRIBAL INITIATIVE IN NOVEMBER IF THESE COMPACTS WERE APPROVED?

David LaSarte: WELL, YEAH, IT'S REAL PURE SPECULATION AT THIS POINT BECAUSE THEY FILED THEIR INITIATIVE AND THEY'VE ALREADY FILED A REVISED INITIATIVE AND TO SEE THE FINAL FORM OF WHATEVER THEY WOULD RUN, IT WOULD BE PURE SPECULATION BUT IF THIS SOLUTION WHICH WE FEEL IS REASONABLE, WAS RESOLVED IN THE LEGISLATURE, THAT OTHER TRIBES ARE TRYING TO MOVE FORWARD WITH, IF COLORADO RIVER'S INITIATIVE THREATENED THAT SOLUTION, THREATENED THAT RESOLUTION OF THE PROBLEM, I THINK THEY WOULD HAVE NO CHOICE BUT TO OPPOSE IT. RIGHT NOW, THAT'S PURE SPECULATION. WE HOPE THEY COME BACK TO THE OTHER TRIBES AND WE CAN ALL MOVE FORWARD IN A UNIFIED FASHION.

Michael: STEVE, LET ME GIVE YOU THAT HYPOTHETICAL. LET'S ASSUME THE TRIBAL COMPACTS ARE AUTHORIZED BY THE LEGISLATURE AND THAT'S CERTAINLY A MAJOR STEP THAT REMAINS BUT LET'S ASSUME THAT THAT TAKES PLACE AND THE COLORADO INITIATIVE IS ON THE BALLOT AND PASSES IN NOVEMBER. WHAT WOULD HAPPEN TO THESE NEGOTIATED COMPACTS THAT WE'VE DISCUSSED SORT OF BROAD PARAMETERS OF?

Steve Hart: WE DON'T THINK THAT THE COLORADO INITIATIVE IS A GOOD IDEA. WE DO THINK THAT WE'VE GOT A GOOD IDEA AND A FAIR AGREEMENT WE'VE WORKED OUT WITH THE TRIBES GENERALLY. WE ARE HOPEFUL THAT IN FACT COLORADO RIVER INDIAN TRIBES WILL RETURN. IF THEY DON'T -- I DON'T THINK IT WOULD BLOW IT UP. I THINK THAT WE HAVE PROVISIONS IN OUR FRAMEWORK AGREEMENT THAT SAYS THAT WE'RE GOING TO HAVE TO DEAL WITH ANY KINDS OF POISON PILL ISSUES THAT ARE RAISED. AND WE'RE GOING TO HAVE TO COME UP WITH SOLUTIONS TO THOSE. THERE ARE SOLUTIONS TO THOSE THINGS. WE'LL GET THERE IF WE HAVE TO. RIGHT NOW, YOU KNOW, IT HAS BEEN A TOUGH NEGOTIATION. IT IS WHAT THE FEDERAL LAW REQUIRES. WE THINK THAT THIS ENSURES GOOD REGULATION. PUTS LIMITS ON GAMING. GOOD REVENUE FOR THE STATE. WORKS FOR THE INDIAN TRIBES. WE'RE OPTIMISTIC THEY'LL COME BACK.

Michael: DAVID, HOW ENTHUSIASTIC ARE THE TRIBES ABOUT IS A SHARING REVENUES WITH THE STATE? IS THAT ONE OF THOSE THINGS YOU KIND OF SAY WELL, OK, THERE IS A PRICE OF ADMISSION TO THE DANCE AND IF THAT'S IT, I GUESS WE'LL PAY THE DIME AND WE'LL DANCE?

David LaSarte: REVENUE SHARING HAS GOTTEN A LOT OF ATTENTION OVER THE LAST TWO YEARS. IT IS A BIG ISSUE. BUT IT IS JUST ONE OF MANY. FROM THE TRIBAL PERSPECTIVE, WE DIDN'T SPEND TWO AND A HALF YEARS TALKING ABOUT REVENUE SHARING. THERE IS A WHOLE HOST OF ISSUES INVOLVED WITH THESE COMPACTS. AND REVENUE SHARING -- MAKING CONTRIBUTIONS TO THE STATE IS SOMETHING THAT THE TRIBES ALREADY DO. VOLUNTARILY. AND THE WAY THEY LOOK AT THIS IS A, IT IS PART OF THE WHOLE AGREEMENT TO MAKE THE AGREEMENT WORK FOR EVERY TRIBE AND TO WORK FOR THE STATE SO THAT EVERYBODY IS BETTER OFF BUT ALSO, FOR THEM, IT IS AN INSTITUTIONALIZATION OF WHAT THEY ALREADY DO BECAUSE THEY ALREADY GIVE SO MUCH TO THE SURROUNDING COMMUNITIES AND SO MUCH IN CHARITABLE DONATIONS AND TAKE SUCH AN ACTIVE ROLE IN WORKING WITH THEIR SURROUNDING COMMUNITIES THAT FOR THEM, THIS IS JUST INSTITUTIONALIZING WHAT THEY FEEL THEY ALREADY DO.

Michael: SPEAKING OF KEY AREAS, LET ME PUT TO YOU A QUESTION THAT I PUT TO STEVE A FEW MINUTES AGO. I THINK THERE ARE A LOT OF PEOPLE WHO ARE -- AND CERTAINLY OUR POLLING DATA INDICATES THIS, THAT ARE COMFORTABLE WITH GAMING ON THE INDIAN RESERVATIONS. BUT WHO SEE BLACKJACK AS A SIGNIFICANT ENLARGEMENT OF THAT AND MAY NOT BE AS COMFORTABLE WITH THAT KIND OF GAMING AS THEY ARE WITH STRICTLY THE SLOT MACHINE OPERATIONS THAT OCCUR RIGHT NOW. WHAT DO YOU SAY TO THOSE PEOPLE?

David LaSarte: WELL, TO BE HONEST, I HAVEN'T HEARD THAT A WHOLE LOT. SINCE THESE AGREEMENTS HAVE COME OUT IN THE LAST COUPLE WEEKS. YOU KNOW, AGAIN, BLACKJACK IS SOMETHING THAT WAS PUT ON THE TABLE TO BE PART OF THE WHOLE PACKAGE.

Michael: IS IT IMPORTANT TO THE TRIBES? IT IS IMPORTANT AS PART OF THE WHOLE PACKAGE. IT IS A VERY IMPORTANT TO SOME TRIBES. ALL THE WAY DOWN THE SPECTRUM. SOME TRIBES DON'T CARE SO MUCH. AND BLACKJACK WAS PART OF THIS VAST JIGSAW PUZZLE THAT WE HAD TO PUT TOGETHER TO CREATE SOMETHING THAT EVERYBODY COULD AGREE TO.

Michael: FINAL QUESTION, STEVE. WHY NOT WAIT UNTIL THE NINETH CIRCUIT OF RULES, RANDALL GNANT HAS SAID THIS IS NOT A GLOBAL RESOLUTION TO THE SITUATION. WHY NOT WAIT TO SEE WHAT THE NINTH CIRCUIT DOES AND SEE IF IT SHINES ANYMORE LIGHT ON THIS?

Steve Hart: WELL, YOU KNOW, JUDGE BLOOMFIELD'S OPINION IN THE AMERICAN GREYHOUND CASE WAS SKETCHED OUT WITH PROBLEMS. THE GOVERNOR AND ATTORNEY GENERAL DIDN'T AGREE WITH THAT. THEY'VE APPEALED IT TO THE NINTH CIRCUIT BUT THIS FRAMEWORK, THE WAY WE'RE GOING ABOUT OUR BUSINESS NOW WOULD RESOLVE THOSE ISSUES BECAUSE WE'RE GOING TO BRING THIS AGREEMENT TO THE LEGISLATURE TO ASK FOR THEIR APPROVAL. REALLY, THAT'S THE ESSENCE OF THE PROBLEM THAT JUDGE BLOOMFIELD FOUND. SO, WE THINK THAT THAT WILL SOLVE THE ISSUE IF THE TRIBES DECIDE THAT WE COULDN'T GET IT WORKED OUT THROUGH THE LEGISLATURE AND THEY NEED TO GO TO THE INITIATIVE, THEN THAT WILL SOLVE THE ISSUE. IT DOESN'T SEEM TO ME THAT WAITING FOR THE NINTH CIRCUIT DECISION WILL BE THE IMPORTANT THING HERE.

Michael: STEVE HART, THANK YOU. DAVID LaSARTE, GOOD TO SEE YOU AGAIN.

Michael: FOR A TRANSCRIPT OF THIS PROGRAM, LOG ON TO CHANNEL 8'S WEB SITE AT www.kaet.asu.edu. CLICK ON "HORIZON" AND FOLLOW THE LINKS. TOMORROW, MORE RESULTS FROM OUR LATEST KAET POLL. A LOOK AT THE GOVERNOR'S POPULARITY AND THE IMAGE OF THE LEGISLATURE DURING THE BUDGET CRISIS. FRIDAY, OF COURSE, THE JOURNALISTS' ROUNDTABLE. THANKS FOR BEING HERE THIS EVENING. I'M MICHAEL GRANT. HAVE A GREAT ONE. GOOD NIGHT.