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A State of Myriad Slots

June 29, 2002

No California governor would want to be the object of this observation by a Nevada gambling expert: "California is clearly, under the direction of Gov. Gray Davis, emerging as one of the largest gaming states in America." Unfortunately for Davis and for Californians, it's the truth.

Back in the late 1990s, Californians got the impression from their elected officials that the casinos being permitted under dozens of agreements with tribes would be small, remote operations. After all, the casinos were to be limited to established tribal lands, mostly in rural areas. But the giant Nevada casino companies were brought in to finance, design, build and operate a number of them. Some deals were concocted to win tribal rights to acreage closer to cities. The opening this week of the $262-million Pechanga Resort & Casino just off a freeway in Temecula shows which way the tribes are headed. A crowd of 40,000 jammed the 13-story building, which houses an 88,000-square-foot casino.

Davis had promised there would be only a modest increase in gambling in California under the 62 agreements he signed with tribes in 1999. Voters, barraged with tribal-sponsored ads, approved the concept in 2000. Davis had assured voters that the agreements, called compacts, would allow the installation of only 45,206 slot machines, which are the biggest cash generators in casinos.

But just last week, the state Gambling Control Commission approved 2,753 more machines, for an authorized total of 51,300, and no doubt more will come. Casino gambling has emerged as a major, untaxed entertainment industry in California. The laws governing it are so loosely drawn that it will continue to expand unless Davis and the Legislature--or the courts--draw limits.

Alas, politicians are reluctant to seek any such limits on the tribes, which are among their top campaign contributors.

Tribal clout was on display in the Legislature last Tuesday, when a bill to ban Internet gambling in California died without a vote in a Senate committee, even though it breezed through the same committee two years ago. It failed this time, the bill's author said, because "we now have a powerful Indian group in opposition."

Several tribes in the Sacramento and San Francisco Bay areas are trying to transfer their tribal bases to urban areas to establish casinos there. San Diego County has already become a casino capital, with nine. While the casinos reject all but the most limited government jurisdiction, including that of law enforcement, they refuse to accept any responsibility for traffic congestion such as the 10-mile backup Monday on I-15 outside Temecula.

In fact it probably will take the courts to interpret the murky language of the compacts and decide to what extent the state can regulate--and possibly tax--this mushrooming industry. In Nevada and New Jersey, wide-open gambling, with the constant presence of huge amounts of cash, requires strict regulation and oversight by state agencies. That need is just as compelling in California.

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