California Controversy: Gold Rush into Casinos ; with Indian Gambling Poised to Expand, State Seeks Its Share of the Winnings

By Daniel B. Wood writer of The Christian Science Monitor | The Christian Science Monitor, August 31, 2004 | Go to article overview

California Controversy: Gold Rush into Casinos ; with Indian Gambling Poised to Expand, State Seeks Its Share of the Winnings


Daniel B. Wood writer of The Christian Science Monitor, The Christian Science Monitor


California could soon be lighting at least some of its path out of fiscal darkness with the flashing bulbs of expanding Indian casinos. It's a trend, observers say, that is percolating in other cash-strapped states.

Fulfilling a campaign promise to push the state's 104 Indian tribes to pay their "fair share" of state government revenue, Gov. Arnold Schwarzenegger has been renegotiating federally mandated compacts with several tribes, most of whom currently pay nothing to the state.

Now, with two initiatives on the November ballot - Proposition 68 which could force tribes to pay 25 cents of every dollar to the state, and Prop. 70 which would require about nine cents - Mr. Schwarzenegger is trying to get tribes to voluntarily fork over higher percentages of their revenues. But to do so, he is offering them the opportunity to expand. It's a controversial tactic.

"California is in effect promoting the growth of casinos ... the goal of getting more revenue to run the government is one of the reasons," says Larry Berg, director of the Jesse Unruh Institute of Politics at the University of Southern California.

Last week Schwarzenegger concluded compacts with five Indian tribes that his staff says could produce $180 million annually for the state. Four of the compacts will bring the state 12 to 25 percent of the casino's annual take, far more than Prop. 70, which most analysts say is the more credible of the two initiatives.

In a fifth compact, Schwarzenegger signed a deal that runs counter to another one of his long-held opposition to casinos in urban areas. The Lytton Band of Pomo Indians, the northern California tribe, would be allowed to operate a giant 2,500 slot- machine casino in San Pablo, an eastern San Francisco Bay area city.

In a vote late last week, the California Assembly did not approve the urban casino, but most analysts say it will have to be approved in some form because the tribe has been given the right to run a casino by federal law.

Federal right to run casinos

Indian gaming was approved by Congress in 1988 as a way for isolated reservations to build up funds.

"The legislature has not yet realized that they don't get to decide whether or not a casino goes in, they only get to decide what is the best deal for the state," says Schwarzenegger spokesman Vince Sollitto. He and others say the legislature will have to revisit the issue in December or early 2005. "When they realize their responsibility under federal law, they will realize this is the best deal the state could get."

The four newly negotiated compacts approved by the legislature Friday include environmental, regulatory, and law-enforcement provisions that are more stringent than most California Indian gambling operations so far. "These are fair-share gaming agreements that also protect our communities," Schwarzenegger said in a statement.

Last year, the windfall to California was about $6 billion, about half the nation's total in collected gaming revenue. …

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