Anybody for restarting the Indian Wars and winning this time?
"To state it mildly," Mr. Marquez said in an interview, "we couldn't agree on elements of sovereignty. They saw it as something to take away and we are just not willing to give it away."
He said that the governor's office was demanding not only 25 percent of the casinos' net winnings but also compliance with a host of environmental and labor regulations on tribal lands.
"What people forget - especially in the governor's office - is that there is no right for the state to share revenue with a sovereign nation," Mr. Marquez said. "Zero is a more appropriate number to be talking about."
As Schwarzenegger Tries to Slow It, Gambling Grows
By JOHN M. BRODER
Published: October 10, 2004
LOS ANGELES, Oct. 8 - Gov. Arnold Schwarzenegger warned this week that approval of two state ballot proposals allowing a significant expansion of casino gambling would turn California into "the gambling capital of the world."
But even if the proposals fail - as is widely expected - casino-style gambling will remain one of the fastest-growing businesses in California. At the current rate of growth, the profits from gambling in California will soon rival that of Nevada.
Advertisement
The battle over one of the ballot propositions pits Indian tribe against Indian tribe over the pace and terms of gambling expansion. Two alliances of tribes have already raised more than $50 million for competing campaigns over the future of their lucrative casinos. At the same time, the tribes are working in parallel to defeat a second ballot proposal, known as Proposition 68, that would allow racetrack and card club owners to install 30,000 slot machines at tracks and gambling halls, effectively ending the Indians' monopoly on Las Vegas-style casino gambling in California.
This week the racetrack and card club owners suspended their effort after spending more than $25 million, admitting that they could not match the resources of the newly rich Indian tribes, which have vowed to spend whatever it took to defeat the measure. The track and club owners also said that Governor Schwarzenegger's spirited opposition to the two proposals made public approval unlikely.
(A card club rents tables to gamblers but does not provide dealers or a house "bank." The setup is much less profitable than Las Vegas-style card games.)
The first ballot measure, Proposition 70, is sponsored by a handful of casino-operating tribes. It would scrap the current compacts with the state under which 54 tribes operate casinos and replace them with ones allowing unshackled growth of gambling on tribal lands. The new compacts would run for 99 years and give the tribes absolute freedom from competition from non-Indian casino interests. The tribes, in exchange, would start paying the state's standard corporate tax rate, currently 8.84 percent, on net winnings.
The tribes, recognized as sovereign nations by the federal government, now pay no state taxes but contribute about $130 million a year to pay tribes in California that do not have gambling operations and to reimburse cities and counties for the costs of providing public services around the casinos.
The current compacts, approved by former Gov. Gray Davis and ratified by the voters in 2000, limit each tribe to 2,000 slot machines and expire in 2020. But even under those limitations, gambling at flashy new casinos on Indian reservations has exploded in the past four years, with net revenues now approaching $6 billion a year. In Nevada, where gambling has been legal for more than 50 years, the annual profits are about $9 billion.
Mr. Schwarzenegger calls Proposition 70 a sweetheart deal for the tribes and a raw deal for the state. At a town-hall-style meeting in Irvine on Wednesday, the governor said the sponsors of the measure were engaged in a deceptive advertising campaign to mask their real intentions, which he said were to "allow casinos to spread like wildfires all over our state, including our cities and towns."
Mr. Schwarzenegger says he believes the tribes should pay what he calls a fair share of their net winnings to the state, which in the past he has defined as 25 percent, the rate tribes in New York and Connecticut with casinos pay. He is urging tribes that want to expand to sit down with state officials and renegotiate their compacts to provide a greater payment to the state.
Nine tribes have done so since Mr. Schwarzenegger took office a year ago, agreeing to pay about 15 percent of their net winnings and, and in addition, finance a $1 billion bond to pay for state transportation projects. Revenue from the new compacts is estimated at $200 million a year.
But some big tribes consider those deals infringements of their sovereignty and are using their new political and financial muscle to battle the governor.
Deron Marquez, chairman of the San Manuel Band of Mission Indians, which runs a big casino near San Bernardino, said that the governor and his staff did not respect Indian rights or understand the mentality of a people subjugated for 200 years.
"To state it mildly," Mr. Marquez said in an interview, "we couldn't agree on elements of sovereignty. They saw it as something to take away and we are just not willing to give it away."
Advertisement
He said that the governor's office was demanding not only 25 percent of the casinos' net winnings but also compliance with a host of environmental and labor regulations on tribal lands.
"What people forget - especially in the governor's office - is that there is no right for the state to share revenue with a sovereign nation," Mr. Marquez said. "Zero is a more appropriate number to be talking about."
Mr. Marquez acknowledged that Proposition 70 lacks public support and that the $10 million that his tribe is spending on it could probably be put to better use in the short term.
But over the long haul, he said, it is an investment in economic survival.
But not all tribes agree with San Manuel and Agua Caliente. The tribes that negotiated new compacts are spending heavily to oppose both ballot proposals, arguing that the best way to preserve tribal sovereignty and the Indian gambling monopoly is to sit down with Mr. Schwarzenegger and cut a deal.
"We got a deal we thought was fair for us and for the state," said Robert H. Smith, chairman of the Pala Band of Mission Indians, which runs a casino in northern San Diego County.
He refrained from criticizing those whom he called his "brothers" who are sponsoring Proposition 70, but said he opposed that measure and predicted it would fail. The millions being spent over these gambling proposals show just how profitable the Indian casinos have become in less than five years, said Robert Stern, president of the Center for Governmental Studies in Los Angeles and a long-time advocate of tougher campaign finance rules in California.
"They're spending ungodly sums of money because they have ungodly sums to pour into these things," Mr. Stern said. "These gaming initiatives have made the tribes one of the major players, if not the major player, in California politics.
"Ten years ago, when they went to Sacramento, legislators wouldn't even see them. Now legislators fly down to the reservations and beg to be seen. It's the money. And money talks, clearly."
nytimes.com |
