The mayor of Phoenix is floating the idea of operating slot machines at the Sky Harbor International Airport as a way to raise revenue for the city and state in the throes of budget woes. According to a report in the Phoenix Republic, Mayor Phil Gordon envisions allowing one or more Native American tribes to operate slot machines at the airport in exchange for sharing revenues with Phoenix and the state. “The city could be able to generate millions that could help to reduce taxes,” the newspaper quoted Gordon as saying.

But several hurdles may prevent such a move. A 2002 compact with the tribes strongly discourages the state from allowing gambling outside tribal lands. If Arizona allows gaming within cities, restrictions on the number of slot machines and casinos on tribal land would disappear, according to the report. Authority to change the compact also likely will require some combination of approvals from tribes, the state Legislature, the Department of the Interior and possibly the voters, the report indicated.

Slots at the airport have proven lucrative in Las Vegas, where some 1,300 slot machines at McCarran International Airport raked in more than $40 million last year.

Budget woes forced the city to The make its biggest budget cuts in history, reducing its general fund by 7.8 percent, or about $90 million.

Slot makers Aristocrat, Bally Technologies, IGT and WMS Gaming could benefit if such a proposal became reality, Deutsche Bank gaming analyst Bill Lerner said in a note to investors.

But, he noted, the proposal to put slot machines at the airport in Phoenix is still in its infancy. “In addition, there is currently no commercial gaming in Arizona but rather only tribal gaming,” Lerner wrote. “As such, we believe it could be difficult for this plan to come to fruition given that the state's 2002 compacts restrict gaming to tribal lands.”