Newsom’s Casino Giveaway: California Surrenders Billions in Tribal Gaming Revenue
Governor Gavin Newsom just forfeited billions of dollars in future revenue that belongs to California taxpayers — and he did it with the stroke of a pen.
The Democratic governor signed a sweeping 25-year gaming compact with the Fort Mojave Indian Tribe this week that eliminates the state’s share of casino profits entirely. It’s a stunning capitulation that transforms what was once a meaningful revenue stream into little more than a cost-recovery arrangement.
The Details of the Deal
The agreement authorizes the Fort Mojave tribe to operate up to two full-scale casinos featuring as many as 1,200 slot machines and Las Vegas-style gaming tables on trust land in San Bernardino County.
Here’s the kicker: Unlike the tribe’s previous compact, California gets virtually nothing in return.
The state will merely recoup its regulatory costs. If the tribe operates more than 350 gaming devices, it will contribute a measly 0.5% of net winnings to a local impact mitigation fund. That’s it.
A Pattern of Giveaways
This isn’t an isolated incident. It’s part of a disturbing pattern from Sacramento.
Kyle Kirkland, president of the California Gaming Association and owner of Club One Casino in Fresno, pulled no punches in his assessment: “What was sold to the California public is very different from what is happening today. It is a scam.”
Kirkland’s card room pays $1 million annually to the city of Fresno alone. Meanwhile, three tribal casinos operate within an hour of his business and pay zero state taxes.
The math doesn’t lie. Tribal casinos generated a record $46.2 billion in gross gaming revenue last year. California’s take under these new-style compacts? A rounding error.
How Did We Get Here?
The answer requires understanding a critical 2010 court decision that fundamentally altered California’s negotiating position.
In Rincon Band of Luiseño Mission Indians v. Schwarzenegger, the Ninth Circuit ruled that California couldn’t require tribes to make general revenue-sharing payments simply for casino operating rights. The court determined such payments constituted an unlawful tax under federal law.
But here’s what critics won’t tell you: That ruling didn’t eliminate California’s leverage. It simply required the state to justify financial terms through regulatory costs, mitigation payments, or other permissible consideration.
Instead of negotiating creatively within those parameters, Newsom and his predecessors essentially surrendered.
What California Is Actually Losing
“California is actually giving up billions annually,” Kirkland stated bluntly. “In the short run, in any other state they would be giving up to 10% to 50% of slot revenue.”
Consider what the old compact required. Governor Arnold Schwarzenegger’s 2004 agreement with Fort Mojave authorized up to 1,500 gaming devices and demanded escalating payments tied to the number of slot machines. Those payments included contributions to California’s Revenue Sharing Trust Fund, which supported tribes with limited or no gaming operations, plus additional revenue-based payments.
Newsom’s compact scraps all of it.
The Fort Mojave tribe will no longer contribute to the Revenue Sharing Trust Fund. It won’t pay into the Tribal Nation Grant Fund. Its obligations consist almost entirely of regulatory cost reimbursements and minimal local impact payments.
The Bigger Picture
This compact represents yet another example of Sacramento’s troubling relationship with tribal gaming interests.
Earlier this month, investigative reporting revealed that a five-member Northern California tribe received tens of millions in federal and state funding despite years of allegations from its own members that tribal leaders were exploiting sovereign status for personal gain.
A Newsom-backed state commission also approved transferring a beloved Mendocino County beach to three Indigenous tribes, removing it from public access.
The pattern is unmistakable: California’s leadership prioritizes political relationships over taxpayer interests.
What This Means for California
The Fort Mojave tribe’s reservation spans California, Arizona, and Nevada along the Colorado River. It already operates the Avi Resort & Casino in Laughlin, Nevada, and Spirit Mountain Casino in Arizona. This compact enables the tribe to expand gaming operations into California for the first time.
Meanwhile, California taxpayers and legitimate card room operators face an increasingly uneven playing field.
Private gaming establishments pay millions in local taxes and face strict regulatory oversight. Tribal casinos operating on sovereign land pay virtually nothing to state coffers while enjoying many of the same market advantages.
The competitive disparity is glaring and unsustainable.
The Road Ahead
The compact requires ratification by the state Legislature, approval by the U.S. Department of the Interior, and publication in the Federal Register before taking effect.
California legislators have an opportunity to demand better terms or reject this agreement outright. They should use it.
Every other gaming jurisdiction in America extracts significantly more value from casino operations than what California is accepting. The 2010 court decision didn’t mandate this outcome — Sacramento’s weak negotiating position did.
The Bottom Line
California faces massive budget deficits, crumbling infrastructure, and mounting pension obligations. Yet Governor Newsom just signed away billions in potential revenue over the next quarter-century.
This isn’t good governance. It’s a giveaway dressed up as tribal cooperation.
The state has legitimate authority to negotiate meaningful financial terms in exchange for valuable gaming rights. Other states do it successfully within the same federal framework California operates under.
Sacramento’s failure to do so represents either stunning incompetence or deliberate disregard for taxpayer interests.
Neither explanation is acceptable.
California voters deserve leadership that fights for every dollar of revenue the state is legally entitled to collect. Instead, they’re getting a governor who signs away their financial future to preserve political relationships.
That’s not progressive governance. It’s fiscal malpractice.
