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Circling the Wagons
By Donna Blevins

There is a conflict underway between privately operated California casinos, and the casinos domiciled on Native American reservation territories. The result of the conflict will undoubtedly affect the residents of California and may impact the patrons of both California and Indian casinos.

Currently, tribal governments do not remit taxes to the government; they do however contribute to a special distribution fund and a revenue sharing trust fund. But new legislation, called Proposition 68 is a California state-led initiative which will result in the California casinos obtaining the right to 30,000 slot machines, or the state of California receiving 25% of the net win of reservation gaming.

Proposition 68 is scheduled to appear on the November ballot. With the Indian’s current monopoly on slots, and with the subsequent tax revenue throw off, it’s a hot and heavy issue.

 

When I was first exposed to Prop 68, I wondered why there was all this steam about slots. Slot machines are legal in 35 states and generated about $6 Billion in tax revenue in 2003 (USA Today, July 25, 2004). Slots are fast becoming the focus of many state governments searching for alternatives to raising taxes.   

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An Either/or Proposition

 

California ’s Proposition 68 has two critical parts and is an either/or proposition. Either the Indians agree to scenario number one or scenario number two automatically takes effect:

 

1.    Either the Indian tribes with gaming operations agree to:

¨     Pay 25% of their net wins into a trust to be used by cities and counties to fund police, firefighters and education

¨     Comply with political contribution disclosure and environmental quality laws

¨     Assist with mitigation of gaming impact to the local community

¨     Comply with and accept gambling control oversight  

 

2.    Or, if the Indian tribes reject scenario number one, the following will automatically occur:

¨     Five specific horseracing tracks and eleven card clubs would be authorized to operate a maximum of 30,000 slot machines, at existing locations only

¨     These racetracks and card clubs must pay 30% of their winnings into the trust fund for local police, firefighters and education

¨     Pay 2% to their city and 1% to their county

 

One of the most equitable parts of this proposition is the allocation of the revenue paid into the trust fund:

 

¨     $1.2 million annually to each non-gaming Indian tribe

¨     $3 million to responsible gaming programs

¨     50% of the remaining directly to counties for services for abused and neglected children in foster care

¨     The remaining funds divided 35% to police and 15% to firefighters  

 

Proposition 68 also provides for a permanent moratorium on the opening of any new card clubs.

 

Either way, the residents of California will economically benefit from the passage of Proposition 68. The precedents established in California as a result of this proposed legislation could conceivably become the benchmark for other states to emulate.

 

Understandably the Native American card rooms do not want to pay this 25%, nor do they want to give up their current monopoly. They are fighting full force against this proposition.

 

As this article is going to press, Gov. Schwarzenegger is against Proposition 68 stating he does not want urban casinos. If these are his true feelings, it looks like he would support legislation that would ban urban casinos.

 

It is critically important for voters to raise their awareness and become educated about what is on the ballot before going to vote. The voting booth is not the place to learn about the issues; the voting booth is the place to make your voice heard.

 


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