A California band of Indians that runs a bustling casino won an important court ruling last week. If it holds up on appeal, California tribes could gain the power to expand their casinos without having to pay significant money into state coffers.

What seems like a sweet victory for tribes could be Pyrrhic.

California voters have approved ballot measures granting tribes monopoly rights to operate Nevada-style gambling halls on their land, transforming some of them into wealthy and sophisticated political players.

But the 9th U.S. Circuit Court of Appeals' ruling favoring the Rincon Band of Luiseño Mission Indians could have the unintended effect of undermining support for tribes' monopoly, and opening the way for commercial gambling interests to expand their role.

Gov. Arnold Schwarzenegger has promoted expansion so long as tribes pay into state coffers. This year, tribes will pay the state about $350 million, far short of the billions the governor touted, but more than nothing.

Sacramento attorney Howard Dickstein, who represents several tribes and negotiated many of those deals, said that even with the payments, tribes profited. He fears the decision that the governor overreached could mean that Indians may "win the battle and lose the war."

"The decision undermines the entire basis for exclusivity in the compacts," Dickstein said. "Without a revenue share, the state has no financial incentive to limit gaming to tribes."

The Rincon Band, the focus of this legal dispute, certainly knows how to play its cards, or so it would seem.

The tribe retained one of the world's largest casino companies, Harrah's Entertainment Inc., to help run its casino in San Diego County. No sucker operation, Harrah's is controlled by New York billionaire Leon Black's Apollo Global Management, and Texas billionaire David Bonderman's TPG Capital.

Even with the recession, business is so good that the tribe wants to expand. Schwarzenegger was willing to approve the expansion, so long as the state got its cut, $38 million a year.

Rincon leaders bristled at the demand, sued and won.

In siding with the tribe, the appellate court purported to protect the tribe from the state's attempt to subjugate it. It didn't. The patronizing decision fails to acknowledge how the riches won at their casinos have transformed many tribes.

Judges Milan D. Smith Jr. and Thomas G. Nelson of the 9th U.S. Circuit Court of Appeals relied on cases that date to the 19th century and early 20th century, way before tribes gained monopoly rights to operate Nevada-style casinos in California and entered into management arrangements with guys like Black and Bonderman.

In the 2-1 decision, the three-judge panel cited an 1831 case that describes the federal government's relation to tribes as being akin to a "ward to his guardian." The majority refers to a 1905 case for a canon of law "obligating us to construe a statute abrogating tribal rights narrowly and most favorably towards tribal interests."

They point to another case in which the military seized land from the Sioux after gold was discovered: "Tribes have struck figurative gold with casino gaming and, again, some state governments, just like their predecessors, are maneuvering to take, or at least share in, some of that figurative gold."

True enough, California voters granted tribes a monopoly to operate Nevada-style casinos. Those casinos generate billions a year. But tribes' leaders are hardly naive. They hire savvy consultants and sharp lobbyists. No fewer than three law firms represented Rincon before the 9th Circuit.

Casino tribes have spent hundreds of millions on California campaigns in the past dozen years. Few legislators dare to cross them. Rincon is nowhere near the biggest political player. But it donated $26,000 to Attorney General Jerry Brown as his office defended Schwarzenegger against the Rincon suit.

Harrah's Rincon casino includes a 660-room hotel, 80 table games and 1,610 slot machines. Each slot nets $369 a day, $135,000 a year, according to the state. The tribe is seeking another 900 slots. That pencils out to another $120 million net a year, according to state estimates.

The tribe says the case is not about the money.

"Protecting tribal sovereignty was our real purpose," Bo Mazzetti, Rincon's chairman, said in a statement.

No one seriously questions tribal sovereignty. But of course money is the issue.

Commercial gambling interests long have coveted a piece of the action.

Sen. Rod Wright, D-Inglewood,told me he hopes to introduce legislation this year to permit Internet poker within California. Wright estimates Internet poker would generate between "$100 million and $350 million" for state coffers. One Southern California tribe embraces the idea, but several worry that they'd lose their exclusive gambling rights.

Card rooms and horse tracks lost a 2004 initiative fight to operate slot machines in exchange for hefty payments to the state. But society evolves. Circumstances change. If the Rincon decision stands and tribes can legally cease their payments, tribes could find that public support for their monopoly will collapse like a house of cards.