Why California Is Signing Tribal Compacts Without Revenue Sharing

When Governor Gavin Newsom signed a 25-year gaming compact with the Fort Mojave Indian Tribe in July, the terms drew notice as much for what they omitted as for what they granted. The compact authorizes as many as two casinos on eligible trust land in San Bernardino County, with up to 1,200 slot machines and other Las Vegas-style games. What it does not do is require the tribe to share a percentage of its casino revenue with the state's general fund. The tribe pays into funds that cover gaming regulation and problem-gambling programs, but Sacramento takes no cut of the win.

To critics, that looks like the state leaving money on the table. To the tribes and to many gaming lawyers, it looks like the state finally conforming its deals to what federal law has long allowed it to demand. The Fort Mojave compact is not an anomaly; it reflects a structural shift in how California negotiates gaming, and understanding why requires going back to the bargain the state struck a generation ago.

The 1999 bargain and its unraveling

California's modern tribal gaming era began with a wave of compacts around 1999 and a set of amendments in the mid-2000s, several of which sent meaningful percentages of gaming revenue to the state's general fund in exchange for larger machine allotments and, crucially, the promise of exclusivity — the guarantee that tribes alone could offer Las Vegas-style gaming in California. Revenue sharing, in that framework, was the price of a valuable concession. The state gave tribes a protected market; the tribes gave the state a share of the proceeds.

The legal architecture beneath that trade grew shakier over time. The Indian Gaming Regulatory Act prohibits states from taxing tribal gaming, and courts came to treat general-fund revenue-sharing demands with suspicion unless the state offered a genuine, new benefit in return. The Ninth Circuit's 2010 decision in Rincon Band v. Schwarzenegger was the turning point: it held that California's demand for general-fund payments, without offering the tribe a meaningful new concession, functioned as an impermissible tax and was negotiated in bad faith. After Rincon, the state's leverage to extract a share of the win — absent something concrete to trade — was substantially weaker. Our explainer on revenue sharing traces how that principle works in practice.

What the state still collects

Zero general-fund revenue sharing does not mean zero payments. Compacts like Fort Mojave's still route money to the Revenue Sharing Trust Fund, the mechanism that redistributes payments to tribes with limited or no gaming, and to funds that pay for the state's regulatory apparatus and for problem-gambling treatment and research. Those obligations are defensible under IGRA precisely because they are tied to gaming-related purposes rather than to the state's general revenue. The distinction is subtle but decisive: the state can be made whole for the costs gaming imposes and can support have-not tribes, but it cannot simply levy a share of profits. Readers can see how that redistribution operates in our RSTF explainer.

The shift is less a giveaway than a legal correction: California is writing compacts that match what IGRA permits it to ask for, rather than terms the courts have signaled it cannot enforce.

The politics of "no new cash"

None of this settles the political argument. When a new casino promises jobs and construction but no direct payment to the state treasury, local officials and budget hawks can reasonably ask what the public gets. The answer that tribes and their advocates offer is that the public benefit runs through employment, regional spending, tribal government services funded by gaming, and the host-community agreements that offset local impacts — not through a line item in the state budget. That is a genuine benefit, but it is diffuse, and it is harder to point to than a revenue-sharing check.

The Fort Mojave deal, and others following the same template, will keep that tension alive. Expect the debate to recur each time Sacramento signs a compact that trades the old revenue-sharing model for regulatory-cost coverage alone. Our report on the Fort Mojave compact covers the specific terms, and the broader California map is tracked on our state hub.

What it signals nationally

California is the largest tribal gaming market in the country, and how it structures its compacts sends signals well beyond its borders. If the most lucrative market in the industry is moving toward compacts that collect regulatory costs but not a share of the win, tribes negotiating elsewhere will cite that precedent, and states hoping to bankroll their budgets on gaming revenue will find the ground shifting beneath them. The lesson emerging from Sacramento is not that revenue sharing is dead — exclusivity-for-payment deals still exist where a state has a real concession to offer — but that it can no longer be assumed. Increasingly, the burden is on the state to justify why it should get a cut at all.