Metropolitan News-Enterprise


Wednesday, October 15, 2003


Page 1


Supreme Court Declines to Hear Challenge to Gaming Compacts


By KENNETH OFGANG, Staff Writer/Appellate Courts


The U.S. Supreme Court yesterday declined to hear a constitutional challenge by pornographer/casino operator/gubernatorial also-ran Larry Flynt to the Indian gaming monopoly granted by California’s Proposition 1A.

The high court, without comment, turned down Flynt’s petition for review of the First District Court of Appeal’s Dec. 26 ruling in Flynt v. California Gambling Control Commission (2002) 104 Cal.App.4th 1125. The California Supreme Court denied review last April.

The Court of Appeal’s Div. Two held that the federal Equal Protection Clause is not violated by legislation designed “to deal with the special problems of Indians.”

Proposition 1A was adopted by a 2 to 1 margin in March 2000, after Proposition 5—a statutory initiative designed to promote Indian gaming—was declared unconstitutional by the state Supreme Court. Proposition 1A amended the California Constitution to allow Nevada-style gambling at slot machines, lottery games, and “banking” games in which the gaming operator competes against the customer.

Tribal Casinos

The amendment restricts the operation of such games to casinos on Indian tribal lands. In exchange for the monopoly, tribes must enter into compacts with the state—subject to approval by the governor and Legislature, as well as by federal authorities under the Indian Gaming Regulatory Act—and share the revenues with the state and with non-gaming tribes.

The state has now approved compacts with more than 60 tribes, running through 2020.

The most recent are with the La Posta and Santa Ysabel bands of Diegueno Mission Indians in the San Diego area and the Torres-Martinez Tribe, whose reservation is located near the Salton Sea.

Legislation approving those agreements was signed by Gov. Gray Davis over the weekend.

Flynt owns the Hustler Casino in Gardena, which he built on the site of the El Dorado Club after buying the historic gaming establishment out of bankruptcy. He joined the management of the city’s other gambling facility, the Normandie Casino, in suing the California Gambling Control Commission, which licenses casinos in the state.

Non-Indian casinos like Flynt’s can only offer poker and other “non-banking” games, in which the “house” has no stake in the outcome but charges a per-hand or per-hour fee to each player.

There are non-Indian casinos in Gardena, Commerce, Bell, Bell Gardens, and Hawaiian Gardens, and in many other cities throughout the state. But the inability to offer the high-stakes “banking” games is causing them to lose their wealthier customers, Flynt claims, even though the nearest Indian casinos are 60 miles from Los Angeles.

Flynt’s claims that Proposition 1A is preempted by IGRA, and that it creates an unconstitutional racial preference in favor of Indians, were rejected by the Court of Appeal, which noted that similar arguments by Northern California club owners had been rejected earlier by a U.S. district judge.

The U.S. Supreme Court has explicitly held that laws designed to fulfill the government’s “unique obligations” to the Indian tribes are not racial preferences, Justice Ignacio Ruvolo wrote for the Court of Appeal.

Preference Case Cited

Ruvolo cited Morton v. Mancari (1974) 417 U.S. 535, in which a unanimous court upheld the Bureau of Indian Affairs’ hiring preference for persons who are at least one-fourth Native American. The late Justice Harry Blackmun said the preference was not “racial” in nature, but was “reasonably designed to further the cause of Indian self-government.”

Indian gaming operations, Ruvolo wrote, similarly serve the needs of the Indian population.

He noted that under IGRA, revenues from Native American gaming can, in general, only be used for tribal government, welfare, or economic development, or for charitable or local government purposes. Similarly, Ruvolo pointed out, the California compacts specify that revenues are to be used “to develop self-sufficiency, promote tribal economic development, and generate jobs and revenues to support the Tribe’s government and governmental services and programs.”


Copyright 2003, Metropolitan News Company