06/22/2004 12:00AM

Governor deals blow to track slots

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California Gov. Arnold Schwarzenegger signed revenue-sharing compacts with five Native American tribes Monday while reiterating his opposition to a referendum that would legalize slots at racetracks.

The compacts, which would expire in 2030, would allow Native American tribal casinos to install an unlimited number of slot machines in exchange for underwriting $1 billion in bonds and paying new license fees for additional slot machines. The compacts have to be approved by the California legislature and the federal Department of the Interior.

Schwarzenegger announced last week that the state was close to signing the compacts, a development that he said would render a scheduled referendum in November to allow slots at racetracks "meaningless."

The referendum, which has been placed on the November ballot, would require all Native American casinos to pay 25 percent of their revenue to the state. If even one tribe refuses, then tracks and card rooms would be allowed to operate a total of 30,000 slot machines around the state.

Schwarzenegger's opposition to the referendum is a damaging political blow to the movement favoring slots at racetracks. Since taking office in November, Schwarzenegger has been able to push through nearly every project he has supported, and his opposition to the racetrack slots referendum may sap any popular political support for the measure.

Still, supporters of the referendum said last week that they would press on with an effort to pass the measure, noting that the new compacts would likely fall short of Schwarzenegger's campaign promise to extract 25 percent of the revenue from the casinos.

Officials representing the racetrack effort could not be reached for comment Tuesday or did not return messages.

Schwarzenegger's staff said Monday that after reviewing the tribal casino operations, the 25 percent figure became impractical. The agreements are expected to raise the equivalent of 15 percent of tribal casino revenue.

The five compacts do not come close to engaging all of the Native American tribes that operate casinos in California. Currently, 54 tribes run casinos on reservations in the state.

The compacts signed on Monday would require tribes to comply with some environmental safeguards and labor laws. That could complicate efforts by the state to bring aboard other tribes if the tribes do not want to expand their slot-machine operations.

The compacts would require tribes to pay a license fee for each new machine. The license fee increases on a graduating scale from $11,000 to $25,000.