Ruling Allows Slot-Type Gambling : Courts: Federal judge says California must permit betting machines on Indian land. The state vows to appeal.

SACRAMENTO — In a major victory for California Indians seeking to open full-scale casinos, a federal judge Friday ordered the state to negotiate “compacts” allowing the use of slot-type gambling machines on tribal lands.

State officials had argued that the profitable machines--the centerpiece of most casinos--were illegal under California’s penal codes and Constitution, which ban slot machines and any “casinos of the types currently operating in Nevada and New Jersey.”

But Friday’s ruling by U.S. District Judge Garland E. Burrell Jr. said the state had relinquished the right to oppose the machines because of its increasingly high-tech gambling ventures, such as the California lottery’s computerized Keno game.

“By any measure, California permits a substantial amount of gambling activity,” Burrell wrote in the 34-page ruling.

“The California lottery operates games that are extremely similar to the electronic games requested by the tribes. . . . The tribes should not be deprived of the opportunity to enhance their gaming operations . . . in the same manner, and with the same modern equipment, that the state has used to enhance its operations.”

State officials vowed to appeal the ruling while it was hailed by attorneys for nearly two dozen tribes--from Palm Springs to the Sacramento Valley--that are seeking full casino gambling.

“Both sides in this case agreed going in that whatever the decision of the court, the matter would have to be resolved by a higher court on appeal,” said Dave Puglia, spokesman for Atty. Gen. Dan Lungren, who has fiercely opposed proposals to vastly expand gambling in California.

“We will be appealing this decision to the U.S. 9th Circuit Court of Appeals.”

But one of the nation’s leading experts on gambling predicted that even before an appeal, the California ruling is likely to spur congressional efforts to curtail Indian gambling, which quickly has mushroomed into a multibillion-dollar business. In the last few years, legal rulings have forced a series of states--from Connecticut to Arizona--to accept far more expansive wagering than most officials thought was authorized under 1988’s national Indian Gaming Regulatory Act, which set the ground rules for the then-fledgling industry.

“California’s such an important state. . . . Congress will now react after this,” said I. Nelson Rose, a law professor at Whittier College who specializes in gambling issues and who is trying to develop a string of casinos on Indian land.

But Rose predicted that moves to revise the gambling law in Congress will have limited effect on pending tribal proposals for casinos and that “for the state of California, what this means is a political turmoil.”

“This will mean expanding the scope of gaming on Indian reservations in California,” said Howard Dickstein, a Sacramento attorney who represents six of the tribes that joined in the statewide legal challenge that led to Friday’s ruling.

“I feel this is a very big step forward toward the ability of tribes in the state to realize their goals of economic independence,” Dickstein said.

Many California tribes operate large bingo halls, poker rooms and off-track betting parlors with the state’s blessing. But their request for expanded compacts--including the video gambling machines--produced a standoff.

The Indians then filed suit last year, complaining that the state was failing to negotiate in good faith.

Burrell’s ruling followed a highly contested hearing in March, during which tribal leaders from throughout the state packed his courtroom. A state attorney warned then that a victory for the Indians could lead to a “landscape dotted with casinos.”

Friday’s ruling does not signal a go-ahead to all forms of gambling. The tribes have not requested some traditional casino games, such as craps, and the judge upheld the state’s opposition to blackjack and other so-called banking card games “using traditional casino themes.”

But the key fight was over electronic gambling devices, considered the money machines of casinos.

The tribes have not requested the old-fashioned type of slot machines--with handles on the side and large trays to deliver coins to winners--but the more modern generation of computerized machines that play video versions of poker, keno and other games.

In saying the state must allow such devices, Burrell noted that California’s broad policy statements against such gambling did not coincide with its own practices--such as the recent introduction of an “on-line interactive” Keno lottery game.

Rose, who is seeking to build a casino on the Twenty-Nine Palms Reservation near Palm Springs, said he expects state officials to try several moves to head off implementation of the ruling.

“The next thing they’ll try to do is get rid of all the gambling in California to get rid of the Indian gambling,” he said, predicting that after that fails “the next thing they’ll do is to try to get Washington to do something.

“But you can’t tell the Indians: ‘Gee, you won the lawsuit so now we’ll change the law,’ ” Rose said.

Puglia, the attorney general’s spokesman, suggested that state officials would endorse moves in Congress to modify the 1988 Indian gambling law to head off decisions like Burrell’s.

“Ultimately this whole mess must be decided either by the U.S. Supreme Court or Congress, and Congress is moving in that direction,” Puglia said. “In Congress there’s a recognition of the need to provide clarity.”

But large gambling interests are banking on the failure of such efforts, including some of the kingpins of Las Vegas casinos--who first opposed Indian gambling, then decided it was better to share in the profits.

Most notable in California is a joint venture announced last year by the Agua Caliente band of the Cahuilla Indians and Caesars World to build a casino in the heart of Palm Springs.

Lieberman reported from Los Angeles and Jacobs from Sacramento.