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He Holds the High Card

March 29, 2004

You can bet on this: Legal gambling in California will expand, carrying with it more of the traffic, environmental and law enforcement problems that flow from current casinos. Odds are, gambling revenue in the state will surpass Nevada's before long. Casinos will pop up in and around the big cities, not just on remote tribal reservations. Dice and roulette games may join the blackjack and poker tables and ringing rows of slot machines.

The question is not whether, but how much. The answer lies with Gov. Arnold Schwarzenegger, who is in negotiations with casino-owning tribes. He should not give away limits on casinos for a few extra dollars to fill the current budget hole.

The largest gambling increases would occur under two competing initiatives now in the signature-gathering process for the November ballot, and Schwarzenegger should try to stop both of them.

One is sponsored by the state's card room and race track interests and the other by the Agua Caliente Band of Mission Indians, the owner of two large casinos in the Palm Springs area.

Both measures are being sold by self- interested proponents as ways to increase the state's share of gambling revenue. But the gain is uncertain, and the price to quality of life could be very high. The governor got no support from the tribes during his campaign and owes them nothing.

The initiative being circulated by the Agua Caliente shows the tribe's aspirations: 99-year compacts (instead of the current 20-year deals) and unlimited expansion of casinos on tribal lands in exchange for a "fee" equal to the state tax on corporations, 8.84% of net profits.

Because tribes are now trying to buy urban land and have it declared tribal, the result could be casinos anywhere.

The initiative is being shilled by state Sen. Jim Battin (R-La Quinta), a beneficiary of $363,080 in campaign contributions from the tribe. He may be within the law to use his legislative stationery to send letters of support to 2 million voters, but Senate leaders should put an end to this blatantly unethical practice.

The other initiative, backed by race tracks and poker rooms, cynically demands that the tribes pay 25% of casino profits to the state. If any refused -- and most of them surely would because their federal sovereign status means they pay no tax now -- the state then would have to allow the tracks and card rooms 30,000 slot machines.

Schwarzenegger should do what the voters who elected him expect: Wrestle at least some money from the casinos without throwing the state wide open to gambling.

How about a modest expansion of casinos, away from major urban areas, in return for payment of an amount that would equal the state's moderate corporation tax?

The tribes, with the advantage of their sovereignty, may seem to hold the high cards, but the governor has the ultimate weapon of his own popularity. He can almost guarantee defeat for the ballot measures if he publicly campaigns against them. The tribes and race tracks should avoid the expense and bad publicity of such a campaign by cutting a deal to keep both initiatives off the ballot.

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