More than $105 million spent on competing gambling measures

SACRAMENTO – Indian casinos, racetracks, card clubs and Gov. Arnold Schwarzenegger burned through more than $107 million last year in a fight over rival gambling expansion measures, both of which were crushed at the polls. The lavish spending appeared to set a national record for competing initiatives on the same subject, but did not come close to the record $88.7 million spent on a single ballot measure, another Indian gambling initiative, Proposition 5 in 1998. "Nobody anywhere else spends that kind of money on initiatives," said Samantha Sanchez of the National Institute on Money in State Politics. "It is without a doubt a national record. No one else is in the ballpark." That's probably not what supporters of Propositions 68 and 70 had in mind at the outset, but it may be perhaps all that they accomplished, according to closing campaign statements filed Monday. Proposition 68 would have given slot machines to 16 urban racetracks and card rooms if all Indian casinos refused to increase the amount they pay the state to 25 percent of gambling revenues. The measure received just 16.2 percent of the vote. Proposition 70 offered unlimited gaming to tribes that agreed to pay the state's corporate income tax rate, currently 8.84 percent. It faired only slightly better, with 23.7 percent of the vote. The racetracks and card rooms that sponsored Proposition 68 spent $25.5 million on the measure before abruptly suspending the campaign almost a month before election day. Tribes spent more than $46 million against Proposition 68. Three of the state's must successful gambling bands – Agua Caliente of Palm Springs, Morongo of east Riverside County and San Manuel of San Bernardino County – put up most of nearly $30 million spent on rival Proposition 70. Agua Caliente alone spent $13 million and San Manuel, $11 million. Schwarzenegger made the defeat of both initiatives a top priority. His political operation spent nearly $4.6 million against them. A labor union, the Hotel Employees and Restaurant Employees, added another $1 million to the opposition. "What a waste," said Robert Stern, president of the Center for Governmental Studies in Los Angeles. "It seems like a lot of money gambled away with no hope of winning." Both measures, Stern noted, trailed in polls relatively early in the campaign and continued to slide. "It's very expensive and difficult to educate voters in California," said Greg Larsen, a spokesman for the tracks and card clubs. "We were up against Indian gaming interests that have incredible amounts of resources, which makes it even more difficult." Gene Raper, a strategist for Agua Caliente, said Proposition 70 was placed on the ballot as a countermeasure to Proposition 68. Agua Caliente wants to expand but has been unwilling to accept Schwarzenegger's terms for a new gambling compact. The tribe argued Proposition 70 would generate up to $500 million a year for the state. Said Raper: "If the governor would have come to an agreement, there's $100 million and something that would have probably been available for the (state) budget."