#07-11 © Copyright 2008, all rights reserved worldwide. Gambling and the Law® is a registered trademark of Professor I Nelson Rose, Whittier Law School, Costa Mesa, CA

This is the story of a casino that will never exist.

In the computer industry, when a company announces that it is developing some great new software, but nothing is ever actually produced, they call it vaporware.

In the gaming industry, we have vaporcasinos.

The Los Angeles Times ran an article on July 28, 2007, entitled “Tribe proposes a casino in Garden Grove.” The reporter, Dave McKibben, did a good job of not only reporting the plan, but also of describing the problems the tribe, the Gabrielino-Tongva, faces.

The announcement was by Jonathan Stein, who, the article said, “identifies himself as the CEO of the tribe.” It’s not even clear that Stein represents the tribe, since it is splintered. McKabben reports Frank Cardenas, an attorney for another faction, calls the casino plan “classic extravagance on the part of Mr. Stein.”

“History suggests this is a man who is all hat and no cattle.”

Great phrase. And probably, on the money.

The proposed billion-dollar casino, with 7,500 slot machines (twice the size of the biggest casino in Las Vegas), a mile from Disneyland would probably be one of the most successful casinos in the world. There are no Indian casinos or licensed card clubs in Orange County. The profits from this monopoly would be so great, that Stein is promising a college scholarship for every high school graduate in the city.

There are only a few legal obstacles that have to be overcome:

1) The tribe does not have federal recognition, as required by the Indian Gaming Regulatory Act (“IGRA”).

2) The tribe does not have “Indian land,” as required by the IGRA.

3) The tribe does not have a compact with the state of California, as required by the IGRA.

The tribe has been trying to get federal recognition for many years. This is a process that takes decades, and there is certainly no guarantee that the federal government will ever consider them a real tribe.

Even federally recognized tribes have to have land taken into trust for a casino. This usually requires the governor’s approval. And Gov. Arnold Schwarzenegger has stated publicly and in writing that he will never approve new land for casinos in any of California’s urban areas.

And the required compact means that majorities of the California State Senate and Assembly also have to approve.

Stein thinks none of this is a problem. He says that he merely needs the State Legislature to pass a “Gabrielino Gaming bill” and he can negotiate the compact with Gov. Schwarzenegger. He’s even gotten an Assemblyman, Jose Solorio (D.-Santa Ana), to consider the bill.

Stein’s argument is based on a slight difference between two sentences in the California State Constitution.

Gaming tribes spent millions getting the following language approved by the state’s voters. The California Constitution prohibits “casinos of the type currently operating in Nevada and New Jersey.” There is one exception: The Governor is authorized to negotiate compacts

“for the operation of slot machines and for the conduct of lottery games and banking and percentage card games by federally recognized Indian tribes on Indian lands in California in accordance with federal law. Accordingly, slot machines, lottery games, and banking and percentage card games are hereby permitted to be conducted and operated on tribal lands subject to those compacts.”

Notice the first sentence is limited to “federally recognized Indian tribes.” But the second sentence left out the word “federally.”

Stein argues this was on purpose, to allow all tribes, even those like the Gabrielinos that are not federally recognized, to operate casinos.

He might be right. But, my guess is a court would say this was merely sloppy drafting. Which means it still has to be a federally recognized tribe.

So, the card clubs in L.A., San Diego and other nearby counties do not have to worry about a new competitor opening with poker and blackjack and slot machines. And tribes running gaming to the east of Orange County won’t have a casino smack in the middle of their major market.

But for poker players in Orange County, it means they will still have to drive to get to a game.

END

© Copyright 2008. Professor I Nelson Rose is recognized as one of the world’s leading experts on gambling law. His latest books, Gaming Law: Cases and Materials and Internet Gaming Law, are available through his website, www.GamblingAndTheLaw.com.