Compact with Spokane Tribe paves way for video gambling

The hottest gambling action in Washington would get even hotter under a new compact proposed between the state and the Spokane Tribe of Indians.

Under the deal, to be announced at a news conference in Seattle today, the tribe would be the first in the state to legally operate cash-operated, single-push-button video-gambling machines that have been popular cash cows elsewhere but have been banned in Washington.

For the Spokanes, the compact would end 15 years of litigation over the tribe's gambling operations, which have been running without a formal compact. And that would help the tribe expand to better compete with neighboring tribes.

"This is a real good day for the tribe," said Gerald Nicodemus, secretary of the Spokane tribal business council.

It may benefit other tribes, which could also make a play for the new machines, potentially triggering an explosion in the video-slot business statewide. Washington's tribal casinos are generating about $1.2 billion a year, or 65 percent of all annual gambling revenue, using the older, more cumbersome machines that take paper tickets instead of cash.

That's one reason the proposal has some powerful detractors, such as state Sen. Margarita Prentice, D-Seattle, who chairs the Senate Ways and Means Committee and sits on the State Gambling Commission that will vote on the compact. Wednesday she called the proposal "really offensive."

"This is way beyond what the public wants to swallow," Prentice said. "I can't imagine how we can possibly approve this."

The deal

The latest version of the compact is a far cry from an earlier proposal that Gov. Christine Gregoire nixed in November 2005. That compact would have allowed the tribe to run 7,500 machines in return for cutting the state in on a share of gambling proceeds.

The latest proposal provides no cut for the state. But it would allow the tribe to run a maximum of 4,700 gambling machines, among up to five gambling locations, with no more than two within 25 miles of each other. For the first three years the tribe could operate no more than 1,500 machines. The tribe would have a year to phase out the traditional one-armed-bandit slot machines it has been running.

In addition, the compact would, for the first time in Washington, raise betting limits on 15 percent of the tribe's slot-style machines from $5 a spin to $20. The Spokanes would also have a first-ever crack at no-limit betting on table games such as poker and blackjack for 120 days out of each year at one location. The unlimited wagers would be available only for players who pass financial screening, have good credit and aren't known to be problem gamblers.

Other tribes can be expected to seek the higher betting limits under state policy that allows every tribe to enjoy the same increases in gambling allowances given any other tribe.

An end run?

The deal is getting flak from opponents who say it changes the basic deal between tribes and the state on the type of gambling machines that tribal casinos may use.

"I don't understand why there has to be a new machine, and one of the basic things, one of the pivotal issues, was that you don't put real money into it," Prentice said.

"Slot machines are illegal in this state and that is one of the things they have trouble understanding. It sounds to me like they are just stretching logic and trying to redesign the machines. This is doing an end run around everybody."

She also doesn't like the idea of pumping up the gambling action in Washington.

"The high stakes, the no limits, no one else has that, and I can't understand how they came up with this," she said.

Big plans

The tribe needs financing to build a 40,000-to-60,000-square-foot casino and hotel with at least 100 rooms at Chewelah, along with a convenience store and gas station.

The Spokane tribe also wants to open a complete commercial and retail complex at Airway Heights, anchored by a $67 million casino-hotel with restaurants and a 2,500-seat entertainment venue. The tribe has opened a convenience store and fuel station at the site. It also envisions fast-food restaurants, a retail village and a site for a big-box retail store, currently being offered to Kmart. The compact would help reach those goals by ending 15 years of federal and state litigation over the one-armed-bandit slot machines the tribe runs. It's the last tribe in Washington that runs a casino without a compact.

The tribe has maintained that its sovereignty entitles it to run whichever machines it wants, but the lawsuits, contending the slots are illegal, have hurt its ability to get financing for expansion projects.

Even if it secures the state gambling compact, the tribe has years of a separate review by local, state and federal governments to gain permission to open a casino off its reservation.

The tribe initiated that process with the U.S. Department of Interior in February.

The proposed state gambling compact will go to the State Gambling Commission for hearing and review. Then Gregoire and the U.S. Department of the Interior will consider the compact for final approval.

If it gets the state compact, the tribe wants to move ahead immediately with renovation and expansion of the Chewelah casino.

"We had a lot of uncertainty in the past for getting financing for any projects for what we want to do," said Nicodemus, the secretary of the tribal business council.

"We were either paying through the nose or not getting the money. It gives us hope we are going to turn this thing around and compete on the level of the neighboring tribes."

Lynda V. Mapes: 206-464-2736 or lmapes@seattletimes.com