Navajos seek new gambling compact with New Mexico

October 26, 2013 • State News

SANTA FE, N.M. (AP) — The [auth] Navajo Nation is pushing for a new gambling compact with New Mexico that would allow for three more casinos and potentially less revenue sharing.

Navajo President Ben Shelly told members of the Legislative Finance Committee on Friday that revamping the existing compact would be a win for both his tribe and the state.

Shelly said the tribe’s gambling operation — which includes casinos in New Mexico and Arizona — employs 950 people and could be a source of more jobs in the future. A longer-term agreement with New Mexico would also make it easier to get outside financing for projects, he said.

“This has been a long, tough and challenging initiative for the Navajo Nation,” Shelly said.

The Navajos have been working on compact revisions for years, but the effort was derailed in the final days of the last legislative session. The current compact will expire in 2015.

As part of the revisions sought by the Navajos, the tribe would be able to increase its number of casinos in New Mexico from two to five.

The proposal also calls for changing the revenue-sharing system. The revenue-sharing rate could potentially increase from the current 8 percent to 10.75 percent by 2037, but the amount shared will vary depending on proceeds from the tribe’s casinos and over the duration of the agreement.

The tribe wants to share only an adjusted net win that would take into account payouts to customers who play for free with slot credits offered to draw casino patrons. In fiscal 2012, the Navajo Nation had a total of $64 million in net win money, a figure that would have been lower under the proposed adjustment.

The proposed compact would expire in 2037, and the tribe would not participate in online gambling ventures unless the state authorized Internet gambling.

The legislative committee raised concerns in a report issued earlier this year about the lack of access to tribal gambling data and the Legislature’s inability to independently verify whether tribes are adhering to the compacts. The report also raises questions about whether the tribal casino market in New Mexico would become oversaturated if the Navajo Nation were to open more casinos.

Karis Begaye, an attorney with the tribe, said if a compact isn’t reached by the expiration date, the tribe could cease any revenue sharing with New Mexico. Begaye added that the National Indian Gaming Commission, a federal agency that oversees and regulates Indian gambling, could shut down Navajo-owned casinos if they are not part of a compact with the state.

“If the compact expires, this would devastate the Navajo Nation financially, as the slot lease agreements and contracts would be placed in jeopardy,” Shelly said.

The Legislature is set to consider the proposed compact during the 30-day session that starts Jan. 15.

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