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Caution Flag on Indian Casinos

August 31, 1998

With Gov. Pete Wilson's signature, California has established a structure of casino-style Indian gambling. Now it must take care that this first formal approval for tribal casinos is not the beginning of a slippery slope leading to wide-open gambling a la Las Vegas.

The Assembly on Thursday approved legislation that ratifies a compact negotiated by Wilson and the Pala band of Indians from San Diego County. The Senate promptly concurred and sent the measure to the governor.

The Pala pact becomes a model; already 10 other tribes have agreed to similar terms. The law allows tribes to operate video slot machines that work like a high-speed lottery game. The major distinction between California gambling and Nevada's is that, essentially, players in California bet against each other, not against the casino owners, and this is seen as an advantage for the players.

The bill was bitterly opposed by 40 other tribes that now operate casinos with 13,000 Nevada-type video slot machines. The federal government has vowed to close these casinos, which now violate state law. Their owners are seeking to legalize their machines by sponsoring Proposition 5 on the November election ballot. It will be a costly, hard-fought campaign.

One of the best parts of the new law requires that tribes involve local government in decisions on the location and construction of casinos. This was designed to overcome fears that casinos would begin popping up in residential neighborhoods. A questionable feature sets a statewide limit of 19,900 slot machines, with each tribe receiving a predetermined number. A tribe that chooses not to operate a casino could sell its allotted quota to another. This is likely to touch off a frenzy of slot machine wheeling and dealing.

The debate was one of the most emotional of the legislative session, with considerable rhetoric about compensating tribes for past wrongs and preserving the sanctity of tribal sovereignty. More to the point, however, this is an intense economic battle with both sides contributing heavily to legislative campaigns and preparing to spend millions in the Proposition 5 campaign. And it is a controversy that is likely to remain with California for some time to come.

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