Two more pueblos join case against New Mexico state regulators

  • Two more pueblos join case to block the state from collecting what they argue would amount to an illegal tax
  • The disagreement is centered on free play credits that are given to gamblers to push them toward playing slots

New Mexico State currently faces a budget shortfall of some $70 million just a day before that start of its new fiscal year. It is a point being used in a current case between the state’s regulators and pueblos, or tribes in which it is claimed that the tribes owe the state a combined $40 million over a long-disputed interpretation of an agreement that dates back some years and involves sharing revenue from tribal casinos.

new mexico pueblos

It has previously been reported by Casinopedia that three pueblos, the Tesuque, Sandia and Isleta, were challenging the state regulators but it has now been revealed that two more pueblos of Santa Clara and Santa Ana have now joined the case.

The pueblos have asked a judge to block the state from collecting what they argue would amount to an illegal tax, The Santa Fe New Mexican reported.

How did the claim come about?

The disagreement between regulators and the three pueblos came about over free play credits that are given to gamblers in casinos to push them towards playing slots. New Mexico Gaming Control Board regulators had previously argued that credits should be included when calculating the revenue that tribes must share with the state. Whereas the tribal casinos strongly disagree claiming that under a 2015 agreement, the credits aren’t included in tallying the revenue that tribes must share.

What are the Individual Sums regulators are trying to claim?

The total sum regulators believe the state is owed comes to a total of $40 million across the three pueblos broken down by each tribe as follows:

  • Tesuque Pueblo: $3.2 million
  • Sandia Pueblo: $26.5 million
  • Isleta Pueblo: $10.3 million

However, in a recent statement, governors from the three pueblos likened the state’s demand to insisting a clothing store selling shirts on sale for half price charge tax on the full price whilst adding that the tax makes no sense. It’s not the first time that something like has happened either, in 2015 the state sought to collect back revenue from free play credits at racinos. However, the racinos filed suit, but eventually settled before the case went to trial.

OUR VERDICT

There’s little doubt that New Mexico is facing a budget shortfall, but that may be a convenient point to make for those proponents of the pueblos. This is certainly a complex case that rests on the interpretation of the law made in 2015. If that law remains in place and valid it can be argued the pueblos may have a strong case, but there’s little doubt that the regulators have strong opinions on that. We can look to the previous racino case for pointers as to how this may play out, but one can’t help feel there may be more developments yet.

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