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Playing To Win
Some say tribes gain an edge with state confusion over rules
By Ron DeLacy
The dials spin and the bells ring and the money rolls in at 44 Indian
casinos up and down California.
Billions of dollars are pouring into reservations, enriching the lives
of people who were among the nation's poorest just a few years ago.
With their new wealth, they also have new political clout, which helped
them expand their casinos and now helps them in a continuing squabble
with government officials over regulation.
The state is on the verge of losing control if they don't get their
arms around these issues," said Robert Traverso, interim executive
director of the California Gambling Control Commission. "These
are serious issues."
Among them:
Authority to allocate slot machines among the casinos. The state claims
that authority, but doesn't even know how many slot machines are out
there.
What to do with nearly $40 million sitting in a trust fund for tribes
without casinos. The state has the money and doesn't know where it
came from.
The budget for the gambling control commission. It operates now with
money borrowed from other state agencies, Traverso said, while the
Legislature delays approval of a $1.3 million appropriation. And its
proposed $4.7 million budget for next year has been challenged by
the Legislative Analyst's Office in a report saying the commission's
roles, responsibilities and planned activities are unclear.
To Traverso, what is clear is this: Political power is being exercised
by some tribes that "do not want to see the commission function.
They don't want the state to be involved in any meaningful way."
Susan Jensen, communications director for the nonprofit California
Nations Indian Gaming Association, called that interpretation "absurd,"
arguing that the tribes accept regulation and oversight from their
own gaming commissions, the state and the federal government.
The problem, she said, is that the tribes are helping to finance the
governor's gambling commission, so they want to make sure it isn't
simply duplicating the work of another state agency, the attorney
general's Division of Gambling Control.
But officials of both that division and the governor's Gambling Control
Commission say they are having trouble getting critical information.
Since last August, for instance, the commission has received nearly
$40 million from casino tribes contributing to a trust fund for tribes
without casinos. The payments, required under the tribes' compacts
with the state, are based on licenses issued for slot machines --
tribes pay initial license fees and then quarterly fees.
But the tribes, not the state, issued the slot allocations through
secret draws, and most of the $40 million came from an accountant
who didn't say which tribes contributed, which hadn't, how much was
from initial payments or how many slot machines each tribe had.
Meanwhile, in March, the governor issued an executive order that only
the commission, not the tribes' accountant, could issue licenses.
So if some of the money came from draws after that order, Traverso
said, the state can't keep the money and the tribes can't keep the
licenses.
And without an accounting for the money, the commission says it can't
distribute the money to the non-gaming tribes. So the money grows
in the trust fund, the tribes still control the allocations and the
commission wonders how many slot machines are out there.
What the government could do, according to Jensen, is simply go to
the casinos and count them. The Division of Gambling Control did that
last last year, and came up with a total of 25,196.
Estimates now range from 40,000 to more than 50,000 because several
casinos have recently opened or expanded to meet a May 15 deadline.
Casinos that were issued the original licenses a year ago had until
May 15 to open shop or put those licenses back into the kitty for
distribution later.
Other rules and realities about California's Indian casinos are a
lot clearer. Among them:
Nevada isn't happy. A recent study said California's Indian casinos
could cost Nevada $24 million to $43 million a year in revenues and
up to 16,000 jobs.
None of the California casinos offers roulette or craps. They are
still banned under the California Constitution, and they never became
a big issue in negotiations over legalizing the casino operations.
What the Indians wanted was slot machines, the big moneymaker for
any casino.
Some casinos allow alcohol and some don't. If no alcohol is served,
gamblers must be 18; otherwise, they must to be 21.
The Jackson Rancheria (no alcohol) in Amador County is one of the
biggest and most successful in Northern California, but it took a
while. After bingo halls failed three times in the 1980s, Jackson
Rancheria matriarch Margaret Dalton opened another one in 1991 that
has gradually expanded into a hotel and a 125,000-square-foot casino
with 900 slot machines, table games, bingo, two restaurants and a
1,500-seat concert theater. With 1,100 workers, it is by far Amador
County's largest private employer.
Sixty percent of net profits must be received by the tribes, and gambling
has clearly given Native Americans an economic boost.
"The proof is in the pudding," said Victor Rocha, a Pechanga
Indian in Riverside County. "I was raised on welfare, but my
niece has a tutor, my sister just bought a home. Kids are going to
college. Money is being raised for charities. It has been a true renaissance
in the last five years."
Rocha runs a Web site (www.pechanga.net)
devoted to news about Native Americans, especially about the gambling
issues. He started it when Gov. Wilson threatened to shut down the
Indian casinos in 1997.
He continued it through the campaign for Proposition 5, in which Californians
approved slot machines and casino expansion, and through court challenges
and Proposition 1A, which changed the state constitution to allow
slot machines.
"It's been a fascinating tale of luck, drama, suspense and eventually
victory," Rocha said. "We finally had the right thing happen
for the first time. The Indians won."
Ron DeLacy is a staff writer for the Modesto Bee. He can be reached
at 209 984-5150 or rdelacy@modbee.com.
Copyright ©The Modesto Bee
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