FLAGSTAFF, Ariz. - Casinos on the Navajo reservation face unknown consequences if New Mexico lawmakers fail to approve a new gaming compact before the current compact expires June 30, 2015.
The Navajo Nation operates casinos under the 2001 New Mexico Indian Gaming Compact, but a new 2014 gaming compact the Nation hoped New Mexico legislators would pass this past month failed in the New Mexico Senate.
Derrick Watchman, CEO of the Navajo Nation Gaming Enterprise, said he can not recall a time when an Indian Gaming compact expired without a new compact in place.
"As far as my recollection, most tribes have been able to put something together with the state before they hit the termination date," he said.
But he said that loans and agreements for all three Navajo casinos depend on the casinos being fully licensed and having the ability to operate. In order to operate an Indian casino, a valid compact needs to be in place.
"In a lot of our documents we only have a year left. We're going to have to give notice to many of our lenders because of a material change to the agreement," he said.
While Watchman said that a year and a half is a long time, 2014 is an election year for both the New Mexico legislature and the Navajo Nation.
"The political landscape could change, either on the New Mexico side or the Navajo side and effectively we could have to restart. Regardless, we have to restart, that's a fact," Watchman said.
In the process of trying to get the compact through the New Mexico legislature, the Nation dealt with Gov. Bill Richardson. When he was defeated, the Nation started over with Gov. Susana Martinez.
"Things change and could change relative to the political aspect and we won't know who we're dealing with as a Nation until 2015," Watchman said. "That's a legitimate issue that we have to keep in mind."
The Pueblo tribes in New Mexico oppose the Nation's compact, fearing they could lose the ability to negotiate their own gambling agreement with the state if the compact became a gaming template.
"I think the other tribes were concerned that if this compact went through then the state may say that there's already a compact in place, a Navajo compact, that, in accordance with the New Mexico Compact Negotiation Act, is a compact and you sign on it or tough luck," Watchman said.
He said that even though the Nation had heard from the governor's office that negotiators are still willing to negotiate with the other tribes or pueblos, New Mexico law does say that one approved compact could be the tem-plate for other tribes.
"That was the big issue and frankly I don't know how that would play out," Watchman said. "The Pueblos were concerned about that."
Another issue for the Pueblos is the number of casinos the Navajo Nation wants to build. Watchman said that is something that can be negotiated, but notwithstanding fairness or the market ability of any new casinos, the Navajo Nation is large, with a large land base and a lot of members. He said he believes the Pueblos in New Mexico forget to recognize that. He also explained that in the federal or state process, the way tribes get money is dependent on their size - how many roads and people the tribe has.
"Whether it is right or not, that is what we have negotiated with the governor," he said. "When you think about it, adding three more class three facilities in the next 25 years, it could be enough time or not enough time. We have a responsibility to the Navajo people. The Navajo tribe is growing like everybody else and we have to keep options open. Five facilities seems like the right number."
After the failure of the compact in the New Mexico Senate, Watchman said the Navajo Nation is evaluating what the next steps should be and coming up with a compact that can be taken to the 2015 legislature.
"We are looking at what's in the best interest of the Navajo Nation," he said. "That is what is happening right now."