California, gambling and the future

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A customer approached a local supermarket, where a card table draped in an American flag served as headquarters for a man collecting signatures on behalf of a statewide ballot initiative. This was his pitch:

"Hey, mister. Come on over and sign a petition to make the Chumash Casino pay its fair share of taxes, like you and me."

Upon closer inspection, the customer discovered that what is actually being promoted is a petition by the state/s card rooms and horse-racing tracks to get equal access to the types of gambling that now take place in tribal casinos throughout California. When confronted with that fact, the signature gatherer offered a toothy smile and said, "Well, I/ll be darned."

That is just one of the problems facing voters in the Age of Initiatives. The lack of knowledge about what an initiative actually will do is astonishing 7 and in the case of the card-table supermarket setup, universal. No one there knew the real purpose of the initiative.

The cardroom/race track initiative is one of two attempting to qualify for the November ballot. The other is promoted by the Agua Caliente tribe in the Palm Springs area, offering to give the state some of its casino profits in exchange for the right to expand its gambling operations beyond limits established in the 20-year compacts signed a few years ago. The tribe is seeking a 99-year deal.

Both of these possible ballot measures provoke one to ask whether California really needs more gambling. If card rooms, horse racing tracks and tribal casinos expand at the rate already allowed by existing law and compacts, gambling operations will soon bring in more revenue in California than in Nevada.

What vexes card room and horse track operators is that tribal casinos can offer gambling opportunities that cannot now be provided in those state-regulated businesses. If their initiative makes it to the ballot, and voters approve, card rooms could add slot machines to their poker, blackjack and Asian table games. It doesn/t require much imagination to envision larger, full-service casinos in downtown Los Angeles or wherever card rooms and horse tracks operate.

Is that what Californians want?

The Agua Caliente proposal is much more straight-forward, but just as self-serving. The tribe proposes giving the state a fee equal to the state/s corporation tax on net profits, or just less than 9 percent. The tradeoff is a significantly higher level of gambling on Agua Caliente land, which consists of every other square mile in a large portion of the Coachella Valley. Do residents of the Palm Springs area really want more gambling, so the state can collect what amounts to a minimum tax on casino profits?

Gov. Arnold Schwarzenegger made a point in his campaign of saying tribes should pay "their fair share" of their profits to the state. Now he is in active negotiations with several tribes, with the goal of finding a way tribal casinos can expand operations, while at the same time paying some kind of fee to help the state offset the social and environment impacts of gambling. That agreement could come any day.

An expansion of gambling in California seems inevitable. Voters have twice expressed their support for tribal casinos. Now it/s up to the governor to help decide how that expansion will occur, and how gambling revenues can help the state financially. Meanwhile, our best advice on the two ballot initiatives is to make sure you know what you/re signing.

April 2, 2004

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