California’s gambling control commission is negotiating a peace accord with Indian tribes infuriated by the state’s effort to impose minimum internal control standards for tribal casinos.

As California's budget crisis drags on, the need for additional revenues continues to fuel debate over the merits of an intra-state online poker network. Meanwhile, a recent federal Court of Appeals ruling could impact revenue sharing agreements between California tribes and the state.

Regulation of more than 90 per cent of the United States’ $25 billion Indian gaming business will be left ‘crippled’ for at least the rest of the year, gaming federal authorities have warned.

The California Assembly has ratified five Indian gaming compacts that will enable a massive increase in gambling in the state with up to 22,500 additional slot machines now authorised.

The California Gambling Control Commission this week unveiled its proposed minimum internal control standards for Indian casinos in a closed-door meeting with tribal officials.

Sen. John McCain and the chairman of the Senate Indian Affairs Committee on Thursday pressed tribal gaming officials to support increased federal regulation of Indian casinos.

The National Indian Gaming Commission reluctantly withdrew its controversial proposal to redefine Class II gaming machine standards last year, and two respected congressmen this week wrote to the regulator demanding no further action be taken. But far from signalling an end to the battle, some observers believe the long running feud over the status of bingo machines in tribal casinos could flare up again in 2009 as the NIGC adopts new tactics.

While discussions on the federal internet gambling proposals are under way, several states are also currently looking to legalize internet gambling at a state level. In the meantime, a six month delay in the implementation of the UIGEA regulations has been announced by the US Treasury.

The Obama Administration is signaling a fresh approach to the potentially explosive issue of Class II machines at tribal casinos that ostensibly offer a form of bingo, but have the look and feel of Las Vegas-style slots.

The National Indian Gaming Commission has warned that Indian tribes could now face Department of Justice enforcement actions following the NIGC’s reluctant withdrawal of controversial proposals to set more precise definitions for thousands of Class II gaming machines in use at tribal gambling venues.