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Navajo gambling compact headed for Legislature

Copyright © 2013 Albuquerque Journal

SANTA FE – A proposed new gambling agreement between the Navajo Nation and the state was met in the 2013 legislative session with complaints about the last-minute timing and a cascade of other questions and concerns.

The proposal will be back again in 2014, and it doesn’t appear the welcome will be any warmer.

But the nation says it intends to stick with what it has negotiated, at least for now.

“We love our compact,” said Navajo Nation Council Delegate Lorenzo Bates.

“On our side of the street, this is how we want to do business,” he said.

The agreement negotiated between the tribe and Gov. Susana Martinez’s office would be in force until 2037 and allow the tribe to have five casinos on the New Mexico side of the reservation, which has neighboring gambling tribes concerned about the competition.

The Navajos now have two casinos and a third facility with low-stakes gambling not regulated by the state.

The pact also contains several terms that other gambling tribes view as unfavorable and that they worry could become a precedent for their own, separate negotiations with the state.

State-tribal compacts require legislative approval. The Navajo agreement was unveiled in the last days of the 2013 session, ran into trouble right off the bat, and was never voted on by the full Legislature.

For 2014, the plan is to start early – even before the session gets underway Jan. 21.

Rep. James Roger Madalena, D-Jemez Pueblo, who is expected to chair the Legislature’s Committee on Compacts, says he wants the Navajo Nation to submit a compact – either the current proposal or an amended one – by Jan. 15.

On Jan. 20, the committee would meet to discuss it. If it were approved, it would be introduced in the full Legislature as soon as the 30-day session started.

“It’s a short session, and the sooner the better, in my opinion. If we wait any longer … then we’re competing with time,” Madalena said.

By law, the Legislature can’t rewrite anything in the compact; it can just vote yes or no. But the Committee on Compacts can ask that the Governor’s Office and the tribe renegotiate provisions it finds problematic – and it’s entirely possible such requests will be made.

Bates says that’s the point at which the tribe could consider whether any changes would be acceptable. Until now, there have been only “informal discussions” about possible alterations to the compact, Bates said, declining to be more specific.

The Navajos’ current compact, and those of four other tribes – the pueblos of Acoma and Pojoaque, and the Mescalero Apaches and Jicarilla Apaches – expire on June 30, 2015.

The nine remaining tribes with casinos fall under compacts renegotiated in 2007 that run through 2037.

The Navajo Nation says allowing it five casinos is reasonable, considering that it has 100,000 enrolled members in New Mexico and a land base in the state of 6,500 square miles.

But neighboring tribes with casinos along Interstate 40 are worried that the Navajos would put a new casino in that area, perhaps reviving a plan for one at the Navajo chapter at To’hajiilee, just over a mile west of Laguna Pueblo’s Route 66 casino.

“They’re all targeting the same set of tires going down the road,” said Sen. George Muñoz, D-Gallup.

Muñoz, who chaired the compacts committee during the 2013 session, expects “a battle” over the Navajo compact in the upcoming session.

Echoing the concerns of some tribes, Muñoz questions whether a provision in the compact that relates to a long-standing dispute between the tribes and the state over “free play” amounts to illegal taxation of the tribe. He asked Attorney General Gary King for an opinion on the issue in March, but he hasn’t yet received it.

New Mexico’s Gaming Control Board contends that gambling tribes have underpaid the state by tens of millions of dollars because they deduct the jackpots won by customers who play for free – as part of casino promotions – from their “net win,” the bottom line that determines how much revenue is shared with the state.

The Navajo compact says the tribe could deduct 65 percent of their “free play” jackpots; 35 percent would be subject to revenue sharing.

Under the compact, the tribe’s revenue sharing would increase from the current 8 percent of “net win” to 9.75 percent through 2015, topping out at 10 percent through 2030 and 10.75 percent through 2037.

Some tribes have objected to a provision of the compact that says the Navajos would stop making revenue sharing payments to the state if Internet gambling were authorized in New Mexico, unless the Navajos also conducted Internet gambling.

Tribes that don’t like those and other provisions – or that want terms in their own compacts that aren’t in the Navajo pact, such as allowing alcohol on the gambling floor – worry that the Navajo agreement will become a template as Martinez’s office continues to negotiate with other tribes.

A spokesman for Martinez says that’s not the case. The governor’s negotiators would not try to hold any other tribe to the same terms, Enrique Knell told the Journal .

“Those terms were negotiated directly with the Navajo Nation and they are based on the unique interests and characteristics of the nation,” Knell said in a statement.

But even within the nation, there is some disagreement about the compact.

Rep. Sandra Jeff, D-Crownpoint, says she supports the provision for five casinos, but she doesn’t like the free play arrangement and other revenue sharing aspects of the proposal – and neither do some of her constituents.

“My concern is, we’re just giving away too much revenue to the state, when we have high unemployment within the Navajo Nation,” Jeff said.

Sen. John Arthur Smith, D-Deming, who was a member of the compacts committee during the 2013 session, says he senses even more disagreement among legislators now about the compact than there was when it was first introduced.

“I think they’re reflecting the feedback they’re getting from their respective tribes,” Smith said.

Meanwhile, Martinez’s office says it has had recent discussions with the other gambling tribes whose compacts expire in 2015 and the state “remains committed” to reaching agreements with them that also could be considered in the 2014 session.

“If any of the tribes decide that they would rather wait and continue negotiations through the next year, we will accommodate those requests,” Knell also said.

Pojoaque Pueblo sued the state last week, alleging that Martinez’s office had not been negotiating in good faith and asking the federal court to appoint a mediator. Knell said the governor was disappointed, but that her office is still open to discussions with the pueblo.