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Horse Tracks and Card Clubs vs. Indian Casinos

October 24, 2004

Proposition 68

Summary: The measure could allow five horse racetracks and 11 card clubs in urban areas to have 30,000 slot machines.

Indian tribes now have the exclusive right in California to operate slot machines. They own more than 60,000 and must pay about $130 million a year to state funds, primarily to aid tribes that have small casinos or no gambling.

Proposition 68 would require that all 60-plus tribes authorized to have casinos agree to pay a fourth of their gambling revenue -- more than $1 billion a year -- to local law enforcement and fire and education programs.

If any tribe refuses to comply, Proposition 68 would allow the 11 card rooms and five racetracks to split 30,000 slot machines. In exchange, the tracks and card clubs would pay a third of their gambling revenue --$1 billion or more a year --to local governments.

Supporters: The racetracks and card rooms that would benefit from the measure placed it on the ballot. It has been endorsed by Los Angeles County Sheriff Lee Baca, the Assn. of Los Angeles Deputy Sheriffs, Sacramento County Sheriff Lou Blanas, Hollywood Park racetrack owner Churchill Downs, Santa Anita Park, Bay Meadows Racecourse in San Mateo, the California Commerce Club, and the Bicycle Club and Hawaiian Gardens card rooms.

Opponents: California Indian tribes are the leading foes and have enlisted numerous groups to oppose it, including the California Police Chiefs Assn., Gov. Arnold Schwarzenegger, state Supt. of Public Instruction Jack O'Connell, state Controller Steve Westly, state Treasurer Phil Angelides, the United Auburn Indian Community, the Pala Band of Mission Indians and the Rumsey Band of Wintun Indians.

Impact: Racetracks and card rooms would be the big winners. Cities and counties would split $1 billion or more in annual payments.

Los Angeles and Orange counties would receive 20,200 of the 30,000 slot machines, while 800 would go to a card room in Oceanside and 9,000 to gambling halls and tracks in Bay Area counties.

If the measure passes, California Indian tribes would lose their monopoly on slot machines in the state. The measure is competing with Proposition 70, which is sponsored by some Indian tribes.

If voters approve both initiatives, the one with the most votes would probably prevail.

Websites: Yes on 68:

Stop 68:

Proposition 70

Summary: The measure would permit unlimited expansion of gambling on Indian reservations and would require that the state approve new 99-year gambling compacts with tribes. Tribes would pay 8.84% of their net income to the state, equivalent to the state corporate tax. The requirement that tribes make payments to the state would disappear if they lose their monopoly on slot machines.

Under compacts approved in 2000, more than 60 tribes received the exclusive right to operate Nevada-style casinos on their reservations. Those deals permit each tribe to own two casinos and have up to 2,000 slot machines.

Proposition 70 would remove caps on the number of slot machines and would allow tribes to have as many casinos as the market would bear. Tribes also could operate other games currently banned in California, such as craps and roulette.

Supporters: The Agua Caliente Band of Cahuilla Indians placed the initiative on the ballot. Supporters include the San Manuel Band of Mission Indians, state Supt. of Public Instruction Jack O'Connell, state Sen. Jim Battin (R-La Quinta), state Sen. Jim Brulte (R-Rancho Cucamonga) and state Sen. Tom McClintock (R-Thousand Oaks).

Opponents: Gov. Schwarzenegger is the main foe. The California Labor Federation, AFL-CIO, and Unite Here, the California Republican and Democratic parties, and the California District Attorneys Assn. and California Police Chiefs Assn. are against the measure.

Impact: Indian tribes with established casinos and land on which to expand would be the major beneficiaries if the proposition passes. The Agua Caliente band would be able to expand its gambling operations significantly.

Proposition 70 imposes few restrictions on tribes' casino expansion. The legislative analyst's office reports that while the state would receive hundreds of millions in additional money from tribes with casinos, local governments could lose millions that they now receive.

Foes contend that although tribes would agree to pay 8.84% of their profit to the state, the measure has minimal audit provisions, making it impossible to determine what those profits might be. Proposition 70 conflicts with Proposition 68. If voters approve both measures, the one with the most votes would probably take effect.

Websites: Yes on 70:

No on Propositions 68 and 70:

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