Most of New Mexico's 14 gambling tribes could soon get notice from the state Gaming Control Board that they're out of compliance with agreements for sharing their casino take with the state.

Board Chairman David Norvell said Thursday that "most" of the gaming tribes are responsible for what now totals an underpayment of between $13 million and $20 million, although he couldn't specify which ones.

At issue is "free play" that casinos use to entice gamblers.

Norvell said while the free play doesn't involve money spent by a gambler, the casinos wrongly incorporate it in a formula used to determine what they owe the state under revenue-sharing compacts.

"What we believe is happening is they are offering promotions to customers who are coming in and playing machines and taking wins, and the tribes are deducting those winnings to arrive at the [casino's] net win," Norvell said.

The net win is the amount gambled in machines minus the amount paid in cash and noncash prizes as well as fees.

"They should not be taking that deduction since there is no money going into that win," he said.

Norvell said there is clearly a difference in how the two sides interpret the compacts.

The 2007 compacts — part of a bargain in which the tribes are allowed a monopoly on certain types of gambling in exchange for sharing slot-machine revenue with the state — say that "any rewards, awards or prizes, in any form, received by or awarded to a patron under any form of a players' club program [however denominated] or as a result of patron-related activities, are not deductible. The value of any complimentaries given to patrons, in any form, are not deductible."

Nine tribes signed the compacts that year; another five signed compacts in 2001.

Pojoaque Pueblo CEO Allen Mosley said his pueblo, which operates the Buffalo Thunder resort and casinos north of Santa Fe, disagrees with the state's interpretation. "If there is nothing going in and nothing coming out, there is nothing to pay taxes on," he said. "If you give something to someone for free, why should you have to pay taxes on it?"

Calls by The New Mexican to leaders of the 13 other gambling tribes were not returned Thursday.

Norvell said the underpayment figure is only an estimate of what the tribes owe, based on what he said is limited information the state gets from the tribes. "They provide us with what they think they should," he said, "but it's not a full audit. It's very limited."

He said it would require an arbitrator to step in and decide who is right. "If they are right," he said, "we will back off."

Arbitration could cost up to $1 million, Norvell estimated, and state lawmakers would have to approve such spending in the 2012 session. Once an appropriation is made, the gaming board would send the notices of noncompliance, he said. If the issue isn't resolved within 20 days of the notice, arbitration is the next step, according to the compacts.

At least one key lawmaker said spending the money would be worth it, if it means the state gets what it believes it is owed.

"We need to make sure we are getting what we are supposed to be getting," Senate Minority Floor Leader Stuart Ingle, R-Portales, said. "We need to be able to get a complete enough audit so that we know we are getting paid the right amount."

A spokesman for Gov. Susana Martinez said she also is concerned that the state isn't receiving its fair share, which "should concern New Mexico taxpayers as well."

"Given the large amount of money [between $13 million and $20 million] that appears to be due to the state, she does support efforts to recoup this revenue; these are funds that could be used for critical initiatives, including ongoing efforts to revive our economy and create jobs, as well as reform our education system to ensure that our kids can read and succeed," spokesman Scott Darnell said.

Norvell, who served as New Mexico attorney general from 1971 to 1975, said the board has been looking at the issue for several years.

The amount that Norvell estimates the tribes owe is significant.

In the second quarter of 2011, tribes paid the state about $16 million in revenue sharing, and reported total net wins of $181,893.

That net win amount is up from $178,610 in the first quarter of the year, and up from $175,189 in the second quarter of 2010.

Contact Kate Nash at 986-3036 or knash@sfnewmexican.com. Read her blog at www.greenchilechatter.com.