Tuesday, January 27, 2004
Copyright © Las Vegas Review-Journal

California slots proposal advances

California Gov. Arnold Schwarzenegger, left, and New Mexico Gov. Bill Richardson meet Monday in Santa Monica, Calif. Part of their talks centered around Indian gambling contracts. Photo by Associated Press

SACRAMENTO, Calif. -- Proponents moved a step closer Monday to collecting signatures to put before voters a measure that would end Indian tribes' monopoly on slot machines in California.

But the California Police Chiefs Association announced its opposition to allowing slot machines at race tracks and non-Indian card clubs.

The proposal would "dramatically" expand casino gambling, the association said, putting 30,000 slot machines in 16 urban locations in six heavily populated counties. Hollywood Park in Inglewood would become one of the world's largest casinos, and even the smallest casinos would have several hundred slot machines, the association said.

A spokesman for initiative backers did not immediately return a telephone message from The Associated Press.

The proposal moved closer to the November ballot Monday when the state attorney general approved the legal title and summary for the measure.

The measure now requires technical approval from the secretary of state before proponents can begin collecting the 598,105 valid signatures of registered voters needed to put the initiative before voters.

Gov. Arnold Schwarzenegger, when he ran to replace former Gov. Gray Davis in the recall election, stirred anger at the tribal monopoly by accusing tribes of not paying "their fair share" toward the state's massive budget imbalance.

The initiative would require the state's 61 gambling tribes to pay the state at least 25 percent of their profits, as Schwarzenegger suggested, or lose their monopoly. Slot machines would then be allowed at five horse tracks in Alameda, Los Angeles, Orange and San Mateo counties, and 11 card rooms in Los Angeles, San Diego, Contra Costa and San Mateo counties, with 33 percent of their slot machine profits going to the state.

Schwarzenegger has not endorsed the expansion initiative, but began negotiations with tribes last week that could lead to an increase in the number of slot machines they are allowed to operate.

"If California is trying to get money out of gambling, they might as well make it commercial, be able to tax it directly and have total control," University of Nevada, Las Vegas professor and casino industry expert Bill Thompson said. "With Indian gaming, control remains in the hands of the federal government

"Limiting slots to Indian tribes was illegal anyhow because the Indian Gaming Regulatory Act of 1988 said Native Americans can have gambling that is permitted to other people (in any state). The ballot measure would just bring California into compliance with federal law," Thompson said.

The Nevada Resort Association declined to comment and spokesmen for individual companies could not be reached or declined to comment.

Schwarzenegger met Monday with New Mexico Gov. Bill Richardson in Santa Monica in part to discuss how that state taxes its tribal casinos. Schwarzenegger's office would not disclose details of the discussions.

The proposed initiative is being pushed by horse race tracks and card rooms that say they have been badly hurt by the rise in Nevada-style gambling at Indian casinos. It follows several failed legal challenges to the tribes' monopoly on slot machines, though the card rooms can offer table games like poker and blackjack.

Gaming Wire writer Rod Smith contributed to this report.