2 bad bets on gambling

GAMBLING in California is slipping out of control. Big casinos are edging into urban areas, limits on operations are evaporating and the state industry is morphing into the nation's largest. Voters who approved two earlier measures that allowed Indian gambling may wonder what happened. Remember the original sales pitch to set up limited gambling on rural reservations? That pledge has vanished in a rush to cash in. Two measures on the November ballot profess to answer the many doubts about the impacts of gambling and offer enticing financial rewards to the public. But each plan is loaded with special interest features that only worsen the situation for Californians. The first one, Proposition 68, is brought by racetracks and card rooms that want a piece of the action run by Indian tribes. The second, Proposition 70, is a bid by several tribes to dodge direct talks with Sacramento over casino size, oversight and state payments. These tribes have written their own deal for the voters to approve. Both should be rejected. The state needs updated rules on gambling, effective limits on size and location, and broad oversight to guarantee fair operations. Neither of the measures does this. Expanding and regulating gambling shouldn't be done at the ballot box, especially on terms written by only one side in the debate. The twin campaigns are also a referendum on Gov. Arnold Schwarzenegger's timid first steps to regulate tribal gambling. This summer, he signed deals with 10 tribes to bring the state coffers $1 billion next year. But his pacts take the lid off casino size and also include the howling bad San Pablo proposal for a monster casino with 5,000 slot machines just off I-80. The San Pablo idea was rightfully withdrawn. California gambling is turning into a war zone. The two ballot measures combined have collected more than $70 million and will likely top the all-time record of $92 million set by a ballot measure in 1998. Its topic: Indian gambling. Schwarzenegger hasn't tamed this surging force. The Legislature, cowed by the heavy-spending tribes, has shown no inclination to take on the subject. Two prior governors did little to map out an orderly future. That has been left to these two measures. Proposition 68 poses as a balanced deal. It asks tribes to pay 25 percent of their winnings to the state. But if only one tribe among over 50 with casinos balks, then the sponsoring card rooms and tracks can cash in. These businesses will get 30,000 slot machines, and their operations will become big- city casinos. Proposition 68 has drawn fire from several foes. Anti-gambling forces don't like wagering near schools and residential areas. Also, Gov. Schwarzenegger notes that none of the new slots will pay royalties to the state. The measure, if passed, could also unhinge his prior pacts that will bring Sacramento $1 billion. This money would come from bonds backed by tribes and their money-machine casinos. The second initiative, Proposition 70, isn't much better. Indian tribes are anything but united, and this ballot measure proves it. It is sponsored by arguably the wealthiest gambling tribes, those with crowded casinos in Palm Springs and San Bernardino. While other tribes have signed new pacts with the governor, the Proposition 70 backers have balked. They feel the agreements, which impose labor, inspection and consumer rules, intrude on tribal sovereignty. They also don't like the 15 percent cut that the 10 smaller tribes accepted. Proposition 70 calls for an approximately 9 percent ANNUAL payment and no rules on future casino size or location. Gov. Schwarzenegger, who opposes both measures, is taking special aim at Proposition 70. Adding to the confusion is uncertainty that passage of either or both measures could have. If both pass, the top-vote getter may prevail, but court challenges are likely. The last thing the state needs now is more indecision and delay on gambling rules. More tribes are lining up to negotiate for casino pacts with the state. It's time to call off this fighting. Voters should reject both Propositions 68 and 70. Then Sacramento can get serious about sensible planning and oversight for a booming industry. -------------------------------------------------------------------------------- Loaded dice Here are summaries of the two gambling initiatives, Propositions 68 and 70. Proposition 68 Sponsors: Five racetracks, including Bay Meadows in San Mateo and Golden Gate Fields in Albany, and 11 card clubs, including Bay Area operations in Colma, San Bruno and Pacheco. Features: All Indian casinos would pay the state 25 percent of proceeds. If any tribe balks, as will surely happen, then the racetracks and card clubs get 30,000 slot machines. There are now 54,000 slots in tribal casinos. Sweeteners: A third of card-club and track profits would go to law enforcement, social programs and tribes without casinos. This stream of money could be $1 billion, backers say, though it would flow to local, not state government. Warning: If this measure passes, a deal between Gov. Arnold Schwarzenegger and several tribes that could bring the state $1 billion in the future could collapse. Spending: Some $25 million, so far, with major donations from card clubs, racetrack owners and Las Vegas gambling firms. Opponents, who are mostly Indian tribes, have spent at least $20 million. Analysis: The measure expands gaming to urban locations and gives tracks and card clubs a piece of the action, but tribes, furious at possibly losing their gambling monopoly, are spending big money to defeat it. -------------------------------------------------------------------------------- Proposition 70 Sponsors: Several Indian tribes, including two with major casinos in Palm Springs and San Bernardino. Features: Dramatically changes the rules for gaming tribes. -- Eliminates the cap of 2,000 slot machines per casino. (Slots are the prime casino money-maker.) -- Allows roulette, craps and other table games now barred. -- Requires tribes to pay 8.84 percent of profits, an amount equal to the state's corporate income tax rate. -- Extends pacts to 99 years, far longer than current agreements between Sacramento and tribes with casinos. -- Limits casino gambling to tribes only. Spending: $22 million, largely from the sponsoring tribes. The major foe is a fund with $250,000 controlled by Gov. Arnold Schwarzenegger. Analysis: Tribes with prime locations are chafing at limits on busy casinos. They don't like the deals Schwarzenegger has struck with other tribes that will pay 15 percent to the state, so they've appealed to voters to approve pacts with terms more favorable to Indian interests.. Source: Chronicle research