Gambling votes may herald era of explosive casino growth
By: EDWARD SIFUENTES - Staff Writer
Governor to seek more agreements; some tribes say they can't afford it | ∞
Pechanga tribal member JoAnne McKuhn, 42, watches as the first internet results are posted on a large screen in a ballroom at the resort where tribal members and others gathered on Super Tuesday night.
DAVID CARLSON Staff Photographer
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PECHANGA INDIAN RESERVATION -- California's tribal gambling industry was poised to grow by 30 percent, as returns suggested voters would approve four gambling agreements on the Super Tuesday ballot.
Such approvals could speed the transformation of North County's backcountry into a center of the casino gambling world, as Gov. Arnold Schwarzenegger has signaled that he would seek to renegotiate other gambling agreements to grow casinos and pump more revenues into the state's ailing coffers.
The ballot initiative campaign was among the most expensive in state history. It divided North County tribes, with the Rincon and Pala tribes opposing their neighbors and competitors for the region's plentiful gambling dollars.
Propositions 94 through 97 would allow four Southern California tribes, including Pechanga near Temecula and Sycuan near San Diego, to add a total of 17,000 slot machines in exchange for giving a larger share of their revenue to the state. That would boost the number of slot machines in California by almost 30 percent.
The expansion would be the largest since voters eight years ago approved Proposition 1A, which legalized tribal gambling in California.
With 98 percent of the votes counted, the four gambling agreements, also called "compacts," won with about 55 percent of the vote.
Tribal members and other supporters of the agreements gathered at the Pechanga Resort & Casino on Tuesday night to watch the results as they came in. Many said they were ready to celebrate.
Pechanga Tribal Chairman Mark Macarro said the tribe would immediately seek to negotiate with city leaders from Temecula to deal with the off-reservation effects of adding up to 7,500 new slots at the casino, including effects on traffic and the environment.
"We've been so focused on the campaign that there are some preliminary steps that need to be done and that's going to happen right away," Macarro said.
In recent years, Pechanga Resort & Casino has grown from a humble gambling hall to one of the largest casinos in the state. Supporters of the new compacts say they would provide the state with as much as $9 billion in direct revenue over the 20-year life span of the compacts, mostly from new slot machines.
Opponents say the huge expansion at just four casinos could devastate smaller casinos and dramatically change the landscape of surrounding communities.
"They will do everything they can to gobble up the market to the detriment of other casinos and nearby communities," said Doug Elmets, a spokesman for North County's Pala Band of Mission Indians, one of the main opponents of the compacts.
The tribes that stand to benefit from the compacts are Pechanga, the Agua Caliente Band of Indians in Palm Springs, the Morongo Band of Mission Indians near Cabazon and the Sycuan Band of the Kumeyaay Nation in East San Diego County.
Under the agreements, the Agua Caliente and Sycuan tribes would get up to 5,000 slot machines each. The Morongo and Pechanga tribes would get up to 7,500.
California's tribal gambling industry has grown into one of the largest in the world. It generated an estimated $7.7 billion in 2006, according to Alan Meister, an economist with the Analysis Group consulting firm in Los Angeles.
By comparison, Nevada casinos took in $12.6 billion the same year, according to Meister's "Indian Gaming Industry Report."
Not only would Pechanga and the three other tribes that struck the agreements grow their businesses, but Gov. Arnold Schwarzenegger, who negotiated the deals, has also signaled in recent speeches that the agreements are "just the beginning" and that new deals with other tribes could generate millions more for the state.
At least one tribe opposing the new agreements says it can't afford to pay the kind of fees the governor wants. The Rincon Band of Mission Indians, which owns a Harrah's-brand casino near Valley Center, is suing the state to get more machines.
"The reality is that many tribes, if not most tribes, cannot afford the outrageous fees that the governor is demanding," said Scott Crowell, a prominent tribal attorney who represents the Rincon tribe.
Both Pechanga and Rincon are Luiseno Indians.
Victor Rocha, a Pechanga tribe member, said Tuesday night that he was "shocked and disheartened" at Rincon's late entry into the opposing camp.
"We opened our doors to them after the fire, and if they need us again, we'll open our doors again," Rocha said.
Macarro said Pechanga would sue if the tribe's compact was rejected by voters, and lamented the high cost of the campaign.
"It was a waste of money for this to go to the ballot, and I hope no tribe has to go through this again," he said.
-- Contact staff writer Edward Sifuentes at (760) 740-3511 or esifuentes@nctimes.com.
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anotherview wrote on Feb 5, 2008 9:50 PM:Economic progress must include tribes, too. The 4 tribal casinos seeking voter approval of their amended gaming compacts want to add more slot machines to meet customer demand. Other successful American businesses grow, and so should tribal casinos. The state will benefit from added revenue from the tribal casinos, without new taxes or debt. Tribal casinos also function as economic engines in their communities, creating jobs with good benefits. Businesses flourish. Cities receive more sales tax revenue. Overall, these positives represent a boon to the Golden State.
Roy wrote on Feb 5, 2008 10:26 PM:Growth in gambling is a boon? 400 million a year to the State represents the State's portion of the disposable income that will be rerouted from other businesses that already pay taxes. $400 million is not even one tenth of one percent of the State budget. It will not even put a noticable dent in our 14 billion deficit. What we will see is a shift in disposable income to casinos. This rerouted amount does not even include what the Tribes are suctioning off with their share from the local and regional economy. The reality will be a revenue neutral situation to California when it realizes the drop in revenue from taxes in other sectors of the economy. It will be the wealth effect in reverse as the many businesses in California take another hit while the currently rich few get the biggest special interest giveaway this State has ever seen. Those that truly benefit will not be Californians in general but the few thousand Indians that will see their monthly income go through the roof from 30k a month to 100k a month or more. The rest of the poor tribes will get their portion which represents such a small amount per non casino tribal member that it would barely cover food expenses. I guess the rich Indians will trade in their Mercedes for Lamborginis and the poor Indian will just have to be happy with the bare subsistence bone that they are being thrown. Also lost will be the current fund that Indians are required to deposit for local impacts. Under these new compacts this money will now go to the State general fund and now the localities that are impacted will have to hold their cup out and beg for the casino impacts to be mitigated. Let's hope these compacts dont pass. They are an awful deal to the many and a givaway to the few.
WrongRoy: Dollars rerouted from Vegas To California wrote on Feb 6, 2008 4:56 AM:The gaming dollars are not a California bathtub economic model. That is to say, the Californians that make the decision to drive to Vegas from Southern California have to drive past Pala and Pechanga. As those properties grow, they reroute part of the 12.6 billion dollars now going to Vegas to increase the $7.7 billion staying in California. People who choose to gamble also travel to gamble. The props victory should cause some slowdown in Vegas growth by slowing their sucking CA gaming dollars to NV. We all win. Get over it.
Voters Are Fooled wrote on Feb 6, 2008 6:11 AM:Yes you were when you passed the props. Shame on you! Those machines will rarely be used and California will get very little.
$$$ Speaks wrote on Feb 6, 2008 7:17 AM:"We were faced with an incredible barrage of negative and deceptive ads..." says a spokesman for the Sycuan tribe. Say what! Who was it that spent millions upon millions barraging the California voters with transparent and deceptive ads? It appears the 4 tribes involved have developed an incredible ability to speak out of both sides of their mouth! I for one don't trust a word that's been said. Money is at the root of all evil!
Lora wrote on Feb 6, 2008 8:02 AM:I'm very disappointed that the voters of California have approved these proposals! I'm not opposed to gambling, but I don't want to see our state become known for gambling, as Nevada is. There are already too many people with gambling addictions, and we all know addictions lead to a variety of other problems.
If the government wants to allow these 4 casinos expansions, then all others should be granted the same priveledges, with the same responsibility to the state. And if we are to allow that, then my earlier comments will surely become a reality.
Californian wrote on Feb 6, 2008 8:04 AM:I'm sorry for CA. What's next..legalized prostitution?
Minority Have Brains wrote on Feb 6, 2008 8:15 AM:The will of the compulsive gamblers, extremely gullible, and intellectually challenged has been heard load and clear! Bring on the slots!
Sorry Roy... wrote on Feb 6, 2008 8:40 AM:But the people have spoken. You fought the good fight but it's time to move on.
What ever happened wrote on Feb 6, 2008 11:35 AM:to soverign nations?
Get Ready Roy wrote on Feb 6, 2008 11:51 AM:You need to Move On regarding these 4 compacts...the deal is done. But I expect to see you spearheading the signature gathering and opposition along with Cheryl Schmidt for the upcoming agreements being negotiated by the Governor. You need to be as loud or louder about those deals than you were with these.
to Californian wrote on Feb 6, 2008 11:56 AM:Your comment is rediculous. Legalized prostitution will follow from these compacts? I hate to break it to you, but gambling was approved by voters in this state in the 1980's when we approved the Lottery. This vote didn't legalize gambling in this state? And now you think that allowing a few more slot machines is going to open the flood gates to legalized prostitution? Unbelievable. Get your head out of the sand, and if you don't like gambling, then don't go to the casinos and stop playing the lottery.
Deb wrote on Feb 6, 2008 4:11 PM:Victor is so right. Pechanga opened there door not only to Rincon, but I also remember seen Pala members there. People complain about the non-gaming tribes not getting anything. Pala and Rincon are the ones against helping them by giving them revenue. This year's was the only time I know that Pala helped others. But you never heard or seen any recognition for any of the other tribal fire depts (local and far). I seen firefighters and hand crews from Parker AZ, Apache Tribes, San Pasqual Fire, Mesa Grande, New Mexico and Sycuan.
See and Say wrote on Feb 6, 2008 4:15 PM:Congratulations on those 4 nations exercising democracy.
Ladies and gentlemen, a gaping hole has been somewhat filled through the monies that will be generated from these compacts.
Legalized exhortion is what I see these compacts as. Indian casinos are not the only businesses in the State. Where are the additional contributions from non-Indian gaming businesses? I truly believe corporations negotiate great tax deals with the cities and State. I do not see them stepping forward voluntarily asking to be taxed more.
One view could be that the Tribes are stepping up and helping solve a dreadful economic situation and trying to relieve the tax burden that would otherwise be placed on Californians. But the compacts are only helping; the compacts and their revenues do not solve the situation. Would it be safe to say that poor fiscal management and planning is the culprit? I am sure we can point to many different causes.
We can all make guesses and assumptions at what the compacts will mean and what the impacts will be. I hope it all works well for everyone.
What Next? wrote on Feb 6, 2008 5:20 PM:Funny, now that the compacts have passed we're getting a change of story. My understanding of the ads and commercials was that a Yes vote would ensure that the state will benefit from the BILLIONS of dollars received over the next 20 years, now we are accused of legalized extortion (See and Say)! It's too bad so many voters were sucked in by such phoney ads! When it comes to gambling, don't trust anyone!
Funding wrote on Feb 6, 2008 6:12 PM:the State of California on the backs of gamblers, smokers and drinkers is wrong. Where does it stop?
Not Even Close wrote on Feb 6, 2008 6:20 PM:Democracy provides for equal rights for everyone. Change that first statement to read "Congratulations on those 4 nations exercising monopoly".
Sour, Sour wrote on Feb 6, 2008 10:02 PM:Grapes. So many of you.
Californian wrote on Feb 7, 2008 10:04 AM:Hey if you want to ruin your life I don't really give a hoot, but I'd prefer you go and do it in a place that's already a scum hole like Las Vegas instead of making CA just like that!
anotherview wrote on Feb 8, 2008 6:28 PM:Look to productive discourse. The 4 tribes with amended gaming compacts will exert various positive economic impacts statewide and locally. Yes, the money spent in tribal casinos generally stays in California. Further, the dollars the tribes receive go right back into the economy of the state. Market analysts have also argued that the gaming market in Southern California has not yet been fully penetrated -- meaning even more gamblers may learn of tribal casinos, and then go there, not Las Vegas. Even if the bathtub view of the state economy held water, then an objective observer would note that the dollars cycling through tribal casinos boost employment and economic activity in rural areas. Hence, either way, a transfer of dollars from one sector to another still creates a beneficial economic outcome within the state. Finally, three times now, recent statewide political elections have produced a vote supporting tribal gaming on Indian lands. No other entity wanting to do legitimate business in the state has had to face the demanding, expensive political gauntlet that the tribes underwent. Perhaps the skeptical and the biased ones will finally accept that tribal gaming has found a rightful place in the Golden State.
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