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California and the West

Gambling Machines to Play by New Rules

Accord: Starting May 12, Indian tribes must accept state ban on slots--or else. Many fear lottery-based games will be losers with customers.


This month's agreement between Gov. Pete Wilson and an impoverished San Diego Indian tribe means the state is finally endorsing gambling machines on California's reservations--but gamblers won't easily detect much change from what's out there now.

Here's what would be different under the pact, which faces widespread opposition among most of the state's 40 gambling tribes:

There would be more machines on which to gamble. Tribes using approved machines would no longer fear being busted. And popular video poker games, now in widespread use, would be gone.

That said, the other differences may not be easily discerned.

There will still be flashing screens and cacophonous sounds. But whether they realize it or not, gamblers will be playing the same kinds of games now offered by the California Lottery--at a much more furious pace.

The Indians' machines are being designed to electronically produce Lotto and scratch-off games literally every quarter-second, 24 hours a day, seven days a week. As with the lottery, payouts to winners will come from a pool of other gamblers' wagers.

The games will simply be disguised to play, feel and look as much like Nevada-style slot machines as possible--but within the framework of long-standing California law that bans slots.

"These games will be as close to a slot machine as you can get, without it being one," said I. Nelson Rose, a professor at Whittier Law School in Costa Mesa and a respected authority on the gambling industry.

State law prohibits the use of machines that dispense coins directly into a hopper or are activated with a pull of an arm. Illegal slots are also defined as machines in which the gambler himself activates a random-numbers generator to determine whether he wins. Illegal, too, are machines that produce so-called "house-banked" payoffs for which the casino is liable, because the jackpot is not determined by the number of gamblers playing the machine.

California Lottery games, approved by voters in 1984, pay winnings out of the pool of money wagered by those who participate. That same rule applies to the Indian casinos, officials say.

"We've had to keep faith with our voters," said Dan Kolkey, Wilson's legal affairs advisor.

Regardless, a growing number of California tribes--40 at last count--have brought machines onto their reservations that the state says are illegal.

Tribes say they like those machines because they are cheaper to buy and easier to operate, and gamblers like the potentially larger jackpots.

The tribes have used these machines for years, even though federal law prohibits them from engaging in gambling not otherwise allowed by the state. Federal prosecutors have not shut down the casinos, waiting instead for the courts, the state and the tribes to decide, once and for all, what machines are legal in California.


Now that Wilson and the Pala tribe have reached accord--after 17 months of negotiations--federal prosecutors say they will act against tribes that do not comply.

Most tribes want little to do with this new agreement, though. They are mounting an intense publicity campaign to place an initiative on the November ballot to legalize the kinds of games they play now.

For those few small tribes supporting the Pala compact, the challenge is to acquire technologically advanced machines that operate so quickly the games won't seem like the ones played at about 19,000 liquor stores, markets and taverns around the state.

Gamblers' acceptance of the Indian casinos will also depend on how much they will win. The state returns only 51.5% of the total wagers as payoffs to winning Lottery players. Many Nevada casinos--because of the intense competition for gamblers--pay back 95% or more of the money wagered on their slot machines. The generosity of the Indian casinos will probably fall somewhere in between, although the pact does not mandate a specific return level.

At the Indian casinos, gamblers will encounter rows of bright screens, dazzling with changing colors and symbols, and electronic sounds.

When the player presses the touch-sensitive screen or the play button, he will actually be enrolling in the next number draw by the casino's central computer. That distinction is legally important because the random-numbers generator is being operated by the tribe, not the individual player.

The function of the individual machine is basically to display the player's picks, wagers, credits and the game's outcome, and to print a paper receipt of his winnings to be cashed in later. The lights and sounds--and the individual video depictions that mask the basic game--are merely cosmetic.


It is that technology--coordinating the central computer and individual terminals' video displays and accounting functions--that gaming designers are now racing to develop to meet the lucrative new California market.

There may eventually be many variations of lottery-type games. The Pala compact defines two.

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