Panel backs revised gambling deal

A legislative committee on Tuesday recommended approval of a revised gambling agreement between the state and the Navajo Nation – despite concerns from other tribes and lawmakers’ misgivings that it was being rushed through at the last minute.

With four days left in the 60-day legislative session, the Legislative Committee on Compacts voted 11-4 to recommend approval of the agreement just negotiated between Gov. Susana Martinez and the tribe, sending it to lawmakers for a vote.

The compact, which would expire in 2037, would allow the Navajo Nation to operate up to five casinos and would increase the share of earnings the tribe’s casinos pay the state.

It also provides that if Internet gambling were authorized in New Mexico by the state or federal governments, the tribe’s revenue sharing – the percentage of its revenue it pays to the state – would be terminated unless the tribe also began Internet gambling.

Navajo Nation Council Delegate Lorenzo Bates told the committee the proposal is “fair and reasonable” and would benefit both the state and tribe.

The tribe is currently covered by a compact that expires in 2015, but it wants to put a longer-term agreement in place.

There is no limit on the number of casinos under the 2001 compacts that currently cover the Navajo Nation and four other tribes. In the 2007 compacts that cover New Mexico’s other nine gambling tribes, those tribes and pueblos are largely limited to two casinos each.

The Navajo Nation has two casinos – one near Church Rock and another near Farmington – as well as a third facility with low-stakes gambling not regulated by the state.

Derrick Watchman, CEO of the Navajo Nation Gaming Enterprise, told the committee the tribe hasn’t determined where it might put additional casinos, but it wants the flexibility to do so if it’s warranted by the economy and demographics.

“We don’t have anything in mind at this point,” Watchman said.

But some lawmakers worried that if the Navajos add casinos, it could hurt existing casinos operated by Laguna and Acoma pueblos along the Interstate 40 corridor and, to the north, by the Jicarilla Apache tribe.

And pueblos and tribes said they are concerned the Navajo Nation’s compact would create expectations that they would agree to the same terms, even though they dislike some of them.

Laguna Gov. Richard Luarkie said the remaining tribes could have something “rammed down their throat without any recourse.”

The agreement includes a resolution – which some other tribes disagree with – to a long-standing dispute over “free play.” Part of the dispute is whether tribes should be able to deduct the jackpots won by customers who play for free – as a casino promotion, for example – from their “net win,” thereby reducing the revenue that goes to the state.

The state Gaming Control Board estimates tribes have underpaid between $20 million and $40 million over the past five years because of the deductions.

The proposed compact says the Navajo Nation could deduct 65 percent of their free-play jackpots. The tribe in a separate agreement has paid $500,000 to the state to settle the matter, according to Martinez’s office.

The proposed compact would raise the revenue-sharing rate from the 8 percent of net win Navajos are paying under the 2001 compact to 9.75 percent. That could go up twice more by 2037, depending on the amount of the “net win.”

Under state law, the Legislature can vote the compact up or down, but not change it. The committee had 45 days to act after Martinez notified lawmakers a deal had been reached.

“I don’t want to come back for a special session just for the compact,” said the committee chairman, Sen. George Muñoz, D-Gallup.

“I don’t appreciate the letter coming at the eleventh hour, but it is what it is,” Muñoz said.
— This article appeared on page A4 of the Albuquerque Journal