New Mexico state demands USD 40M from casino tribes
The disagreement centers on what are known as free play credits, which casinos give gamblers to entice them to play slot machines. New Mexico regulators used to argue the free credits should be included when calculating the revenue tribes must share with the state under gambling compacts. But tribes have long maintained that would break with generally accepted accounting practices and violate federal law.
Shared revenue from casinos goes into the state’s general fund, which has neared empty over the last year and is expected to contain far less cash over the next year.
Governors from the three pueblos called the state’s case “a specious attempt to reach deeper into the pockets of New Mexico’s Native American tribes than the agreements between the tribes and the state provide.”
The chief of the Bureau of Indian Affairs also wrote in a letter in 2015 that the state could not count the free play credits.
“It is our view that the state’s unilateral determination to include such sums in revenue sharing calculations would constitute an impermissible tax …” then-assistant secretary Kevin Washburn wrote.
The case is not without precedent. The state sought to collect back revenue from free play credits at racinos — racetrack casinos that are also required to share revenue with the New Mexico government. The racinos filed suit but eventually settled in 2015 before the case went to trial.
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