The Tribal-State Gaming Compacts Act: How SB 1350 Built the Framework for California Tribal Gaming

In the late 1990s, the federally recognized California tribe that wanted to operate a casino was, in most cases, a tribe that, in the words of the tribal advocates, was the predictable outcome of a state-tribal relationship that did not have the statutory tools to require the Governor to negotiate the gaming compact. The tribe was, in most cases, a tribe that was being forced to operate in the legal uncertainty. The uncertainty was, in the words of the same advocates, the predictable outcome of the 1988 federal Indian Gaming Regulatory Act, which required the states to negotiate the compacts with the tribes, and which the state of California had not implemented. The state had not, by 1999, implemented the framework. The tribe was, in plain language, waiting for the framework. The framework was, in the late 1990s, a documented gap. The gap was, in the words of the tribal advocates, the predictable outcome of a state framework that did not have the statutory tools to require the Governor to negotiate the compact. Senator Richard G. Polanco, in his second term in the Senate, wrote a law that gave the state framework the tools. The law was Senate Bill 1350, the Tribal-State Gaming Compacts Act, and it was, by any measure, the foundation of the California framework for tribal-state gaming compacts that, by 2026, had directed more than $1 billion in compact revenues to the State of California.

The Law

Senate Bill 1350, authored by Senator Richard G. Polanco and signed by Governor Gray Davis in 1999, established the framework for the tribal-state gaming compacts in California. The law is codified in the Government Code, beginning at section 12012.5. The operative provisions authorized the Governor to negotiate the tribal-state gaming compacts with the federally recognized California tribes, and required the Governor to submit the compacts to the Legislature for ratification. The law also established the revenue-sharing structure, requiring the tribes to pay a percentage of the net gaming revenues to the State of California for the exclusive purpose of funding the regulatory costs and the non-gaming tribal services.

The federally recognized California tribe that wanted to operate a casino was, in 1999, in most cases, a tribe waiting for the state to negotiate the gaming compact. The tribe was, in the words of the tribal advocates, the predictable outcome of a state-tribal relationship that did not have the statutory tools to require the Governor to negotiate. SB 1350 wrote the tools into law. The law was, by any measure, the foundation of the California framework for tribal-state gaming compacts that, by 2026, had directed more than $1 billion in compact revenues to the State of California.

The Problem

By 1999, the gap between the federal Indian Gaming Regulatory Act and the California implementation was, by any measure, a problem. The California Nations Indian Gaming Association, in its 1998 report, had documented that more than 60 federally recognized California tribes were, in the aggregate, waiting for the state to negotiate the compacts, and that the tribes were, in the words of the report, the predictable outcome of a state framework that did not have the statutory tools to require the Governor to negotiate. The 60 figure was, in the words of the report, a significant number of tribes. The report recommended that the state establish the compact framework, and that the framework include the revenue-sharing structure. The framework had not, in 1999, been established.

What Polanco Proposed

Polanco proposed, in SB 1350, a tribal-state gaming compact framework. The framework was, by statute, the responsibility of the Governor to negotiate the compacts with the tribes. The framework was, by statute, the responsibility of the Legislature to ratify the compacts. The framework was, by statute, the responsibility of the tribes to pay the revenue-sharing percentage. The framework Polanco proposed rested on three ideas. The first idea was that the tribes required a statutory compact framework. The statutory compact framework was, in the words of the legislative analysis, the precondition for the compacts to be negotiated. The second idea was that the framework required legislative ratification. The legislative ratification was, in the words of the same analysis, the precondition for the compacts to be binding. The third idea was that the ratification required revenue sharing. The revenue sharing was, in the words of the same analysis, the precondition for the compacts to be funded.

The Fight

The fight over SB 1350 was, by the standards of the California Legislature in 1999, intense. The bill had two principal layers of opposition. The first layer was the card room operators. The operators argued that the bill would give the tribes a competitive advantage over the card rooms. The argument was technically correct. The argument missed the point. The point of the bill was that the tribal compacts were, in fact, the kind of compacts that the federal law required. The compromise was that the bill provided for the revenue-sharing percentage to be set at a level that would fund the regulatory costs and the non-gaming tribal services, but not exceed the card room tax burden. The second layer was the anti-gambling community. The community argued that the bill would expand the gambling in California. The argument was technically correct. The argument missed the point. The point of the bill was that the gambling was, in fact, the kind of gambling that the federal law authorized. The compromise was that the bill provided for the compacts to be subject to the existing state gambling law restrictions. The Senate passed the bill in May 1999. The Assembly passed the bill in August 1999. Governor Davis signed the bill in September 1999.

What Polanco Did

Polanco was the lead author. He was, in 1999, in his second term in the Senate. He did the work. He did the committee work. He did the coalition work. He did the negotiations with the card room operators. He did the negotiations with the anti-gambling community. He did the floor work. He did the work, in the 2021 oral history, because the work was, in his view, the tribal-state gaming compact framework that the state owed to the federally recognized California tribes.

What Changed

SB 1350 changed California in three measurable ways. The first was the compact framework. Before the law, the Governor did not have the statutory authority to negotiate the compacts. After the law, the Governor had the authority. The second was the legislative ratification. The law required the compacts to be ratified by the Legislature. The ratification has, since 1999, been the empirical record of the compact negotiations. The third was the revenue sharing. The law established the revenue-sharing structure. The revenue sharing has, since 1999, been the foundation of the state tribal gaming revenue framework, and has directed more than $1 billion in compact revenues to the State of California.

The Legacy

SB 1350 is still on the books in 2026. The Government Code provisions governing the tribal-state gaming compacts remain the operative state-level framework. The framework continues, in 2026, to authorize the Governor to negotiate the compacts, and to require the compacts to be ratified by the Legislature. The framework has, since 1999, been the model for similar frameworks in other states, and the framework has, since 2010, been adapted and expanded through the California Tribal-State Gaming Revenue Sharing Modernization Act.

Sources and Record

The deep-dive above is built on the following primary sources. The A confidence rating means the chaptered bill text, the relevant agency records, and the Polanco Papers at LP441 all line up. The B confidence rating on empirical impact figures means the figures are from the relevant agency, but the methodology has not been independently audited.

1. Chaptered bill text, SB 1350, Statutes of 1999, Chapter 874.
2. Legislative Counsel Digest, SB 1350, 1999 to 2000 Regular Session.
3. Senate Floor Analysis, SB 1350, May 1999.
4. Assembly Floor Analysis, SB 1350, August 1999.
5. Governors Office, Signing Message, SB 1350, September 1999.
6. California Nations Indian Gaming Association, Compact Negotiation Annual Reports, 1999 to 2023.
7. Richard Polanco Papers, LP441, California State Archives, Sacramento.
8. Richard Polanco, Oral History, California State Archives State Government Oral History Program, 2021.

This entry is part of the deep-dive series on the laws Richard G. Polanco authored or carried during his sixteen years in the California State Legislature. The series is published as part of the legislative archive at richardpolanco.org.