SPOKANE -- After years of operating casinos in defiance of the law, the Spokane Tribe of Indians has reached a tentative deal with federal and state regulators that also could pave the way for other tribes to expand gambling.

The proposed compact calls for the Spokane Tribe to have greater freedom in offering games than other tribes in the state, and that will likely prompt some of those tribes to seek the same deal.

Under the agreement announced Thursday, the tribe can operate up to five casinos, with a total of 4,700 video gambling machines. That is a number in harmony with other tribes in the state.

But the Spokanes can offer much higher stakes at some tables, and will be allowed to operate video gambling machines that will accept coins or currency, rather than paper tickets. Such machines are banned in Washington.

The Spokanes are the last tribe in Washington that runs a casino without a compact. There are 25 Indian casinos in the state, which generate about $1.2 billion a year.

"We have reached a proposed compact that will serve the tribe and state well," Spokane Chairman Richard Sherwood said in a news release.

The deal, after 15 years of stalled negotiations and litigation, will provide economic benefits to the tribe and region, and ensure that gambling will remain limited and well regulated, Sherwood said.

Gambling revenues will be used to improve health care and provide higher education for tribal members, as well as strengthen law enforcement and government services, he said.

The tribe said it immediately will upgrade its two existing casinos, in Chewelah and at the confluence of the Columbia and Spokane rivers. The tribe also will seek separate federal approval to build a huge new casino off its reservation in a suburb of Spokane.

The deal was reached between the tribe, the Washington state Gambling Commission and the U.S. Department of the Interior, and still must be approved by all the parties.

"I'd like to thank the Spokane Tribe and state negotiators for their hard work to reach this tentative agreement," Gov. Chris Gregoire said in a news release.

The tribe and the state have a long history of conflict over the Spokanes' casinos, which featured Las Vegas-style slot machines in defiance of state regulations.

The 9th U.S. Circuit Court of Appeals ruled in 1998 that the state was not negotiating in good faith with the tribe and dropped a federal injunction against Spokane tribal gambling operations. The state and the tribe resumed talks in 2004.

Gregoire last year rejected a proposal that would have allowed the tribe to run 7,500 machines in return for giving the state a cut of the proceeds.

The new proposal provides no cut for the state.

From here, the deal will be the subject of a public hearing within 30 days of the Legislature's receiving the proposal. The state gambling commission will hold a public hearing Feb. 8 to decide whether to send the proposal to the governor. The tribal chairman, governor and U.S. Interior secretary must all sign the compact.

Under the deal, the tribe would be the first allowed to offer cash-operated, single-push-button video-gambling machines.

State Sen. Margarita Prentice, D-Renton, a member of the gambling commission, was sharply critical.

"I don't see any reason for them to leapfrog over the other tribes," Prentice said, noting that other tribes will be entitled to the same kind of gaming and would certainly pursue the changes.

She also predicted the Spokanes will not win federal permission to place a casino in Airway Heights, a Spokane suburb.

The proposed compact would allow the tribe to raise betting limits on 15 percent of its slot-style machines from $5 to $20 a turn. The tribe can have no more than 2,000 video machines at any one location.

The tribe of 2,400 people wants to open a retail complex at Airway Heights, with a $67 million casino-hotel and a 2,500-seat entertainment venue. The tribe, which has a sprawling reservation northwest of Spokane, has started working for federal approval.