Sacramento, Dec. 2 (Bloomberg) -- The California Supreme Court temporarily halted an initiative passed by voters to ease restrictions on Indian gaming after the state government argued the plan violated its gambling regulations.

The Supreme Court issued a stay on Proposition Five, which would have legitimized video slot machines at about 40 tribal casinos and allowed tribes to operate card games such as poker and run lotteries.

California voters passed the proposition by 62.4 percent to 32.6 percent in the Nov. 4 elections, one of several pro-gambling propositions that passed across the U.S. on Election Day. Gov. Pete Wilson's office challenged the initiative in court, arguing it violates a state constitutional ban on Nevada-style casinos and claiming that the Indian campaign used deceptive advertising to convince voters to support it.

``Few people realized that without the Court's action, the tribes' sovereign immunity could have prevented the state from stopping the tribes' operation of these illegal casinos once they took effect, regardless of how unconstitutional the courts later found the initiative to be,'' Wilson said in a statement.

The supporters of the plan will now have 20 days to file a response, which will be considered in the beginning of January, according to the court clerk's office. Supporters weren't immediately available to comment on the ruling.

10-Year Battle

The Indians have operated casinos in California for about a decade, all the time fighting the state's contention that they are illegal. Supporters of the initiative argued in their campaign that the plan would finally make casinos legal and allow the tribes to keep the economic gains that their casinos have allowed them, including the creation of about 50,000 jobs.

The proposition was opposed by an unusual alliance of anti- gambling groups and Nevada casino companies, such as Hilton Hotels Corp. and Circus Circus Enterprises Inc., who are concerned Indian gambling would hurt their businesses.

The opponents of the proposition argued it will cause an increase in gambling in California and would lead to attempts by non-Indian groups in bars and at racetracks to install video slots themselves.

The casinos are also concerned that Indian gaming will cut into their business from California residents, who spend $8 billion a year gambling in Nevada.

More than $54 million was spent on campaigns for and against the initiative, making it the most expensive ballot question in California history, according to the secretary of state's office.