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Andrew Codding

PS 402

Professor Dorrington

Impact of Props 94-97 for California

 

            On February 5^th of 2008 Californians chose to pass propositions 94-97, in hopes of increasing state funds in the midst of an enormous financial dilemma. Propositions 94-97 allows for a select group of California Indian tribes (four to be exact) to expand their Indian casino gaming opportunities statewide for increased revenue. The four select tribes; Pechanga (94), Morongo (95), Sycuan (96), and Agua Caliente (97), will be paying the state of California 9 billion dollars over the course of two decades, adding up to tens of millions of dollars per year per tribe. No set amount was ever selected in the proposition. Propositions 94-97 are supported by the governor and bipartisan majorities in the state Legislature, and allow the four tribes to install additional slot machines (17,000), primarily in existing tribal casinos. In return for these gaming rights, the tribes will pay up to 25 percent of their revenues to state and local governments, allow increased state oversight through audits and random inspections, and meet new environmental standards. In this paper I will investigate the half-truths and propaganda used to promote props 94-97, and what benefits and non-benefits these propositions will have for the state of California. I will also investigate the costs local governments will have to spend to provide adequate roadways, police, paramedic, and firefighters to adequately support the casinos. Also what negative effects it will have on citizens

 

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becoming “addicted” or bankrupt because of the casinos, along with the tens of thousands of people that will be entering these counties and cities due to the expansion of these casinos.

            Californians showed their concern for the state economy and budget crisis when propositions 94-97 where presented and passed by initiative in February 2008.  Many waived their concern for gambling expansions and the dominance of four California tribes over the gaming industry in return for increased state funds. It seems Californians are victim to a political fiasco in the middle of a financial crisis; the timing was too good to be true for the four major players in the California gaming industry. Another crafty case of propaganda, “A barrage of television ads says that the gambling expansion compacts on Tuesday’s ballot would pump $9 billion into the state’s empty coffers and help avert a tax increase. But it would take decades for the state to get that kind of money from the agreements reached with four Southern California Indian tribes — and there’s no guarantee it would ever happen.” (Vogel). What the proposition did guarantee California is 3 billion dollars over the next 22 years from the four tribes combined, not the 9 billion dollars as promised in the advertisements or television campaigns. This money goes directly to public service and any other state funded organizations. The problem is if the state only receives the minimum 3 billion dollars over the course of two decades, it will hardly impact the quality of public service or state funds. Moreover, only a nine billion dollar payment over twenty years will hardly impact the state as well. Pro arguments for 94-97 were staggeringly vague, and did not seem to guarantee anything to any particular state funded organizations, “YES on 94, 95, 96, 97 preserves four tribal gaming agreements and

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protects hundreds of millions of dollars each year they will provide to our state. The agreements increase the percentage of revenues tribes pay to the state, mandate strict new environmental protections, and share revenues with non-gaming tribes.” (sos.ca.gov). This pro argument on the states reference guide does not seem to have any real goals. Schools are not guaranteed any money, other non-gaming tribes are not guaranteed any set sums of money, it lacks protection for workers and the environment, and the increased revenue claims seem to be extremely exaggerated.  “Propositions 94 through 97 would allow just four tribes to control one-third of the state’s Indian gaming pie. And these deals fail to increase revenue sharing opportunities for even the poorest of tribes.”(United Auburn Indian Community nounfairdeals.com). Aside from the negatives the positive claims supporting the casinos are relatively meager, but sound appealing before any real investigation is carried out. For local governments, the counties of San Diego and Riverside will grow economically and they will receive payments from local casinos to offset the costs of local services. State revenue will also increase over a course of 20 years, and non-gaming tribes will benefit as well. Members of California’s Native American community will also benefit by providing them with funds for their own infrastructure.

            One fundamental issue involving props 94-97 is the deal does not seem to be about Indian gaming in California as a whole. It involves four wealthy tribes with four specific deals, and whether the deal has been equal for the other 104 California tribes, casino workers, and the surrounding communities. It will be interesting to see how these four tribes answer these questions of “fairness” when they get their 17,000 additional slot machines up and running.

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Major opponents to the new deal are established gaming industries in California and Nevada as well. Las Vegas casinos and California horse racing tracks will see a noticeable decline in profit with the expansion of California Indian casinos. Their opinion on the matter has been voiced with relentless anti-gaming expansion ads on television and in the newspaper. California casinos will provide a more convenient commute for southern California gamblers, because they no longer have travel to Las Vegas. This will save gamblers money in hotel fees and transportation costs, but Las Vegas and other established gaming facilities will lose a large portion of their clientele from nearby Southern California.

            Many Californians saw props. 94-97 as an opportunity to ease the states 14 billion dollar debt with the incorporation of the 9 billion dollar deal with the gaming casinos. Casinos have promised to pay 25% of their revenues to state and local governments. One addressed concern is whether California will receive the proposed 9 billion dollars. The compacts guarantee the state at least 3 billion dollars over the next twenty two years, the other 6 billion will be based on the success of the casino’s expansion efforts. This depends on how fast the casinos expand, and how busy they can keep their new slot machines. Using this as a solution to cover a 14 billion dollar statewide debt seems highly unlikely. In recent interviews with The Times Tribal leaders stated that they are in no rush for large scale expansion. “We have to go with the market,” said Daniel J. Tucker, chairman of the Sycuan Band of the Kumeyaay Nation. “We’re not going to go and just put in 3,000 machines and think it’s going to work.”(Vogel). Large numbers were displayed on our T.V. screens promising California 9 billion dollars, but in the small print and not mentioned it says that it will be over a period of 22 years. The casinos

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promise the state a combined 123 million dollars per year whether a single slot machine is added or not, but whether all of it will reach the state treasury is up for debate. Governor Schwarzenegger has already proposed shifting $40 million in tribal revenue to ensure that 71 tribes with few or no slot machines get payments the state promised when it first struck gambling deals with Indians in 1999.

            California workers unions oppose casino expansion for the “Big 4” gaming tribes of California. The reason unions oppose props 94-97 is because the deal neglects basic rights for casino workers in these casinos. Workers will not be covered with basic minimum wage requirements, affordable healthcare benefits, or sexual harassment rights. This ensures maximum profits for the wealthy casino owners at the expense of the casino employees. For example, “…a study conducted by a UC Riverside Professor of Economics found that Agua Caliente’s health coverage was so expensive that 56% of the dependent children of casino workers were forced onto taxpayer-funded health care programs” (leftinsf). Props 94-97 also exempt the tribes from any environmental protection laws that all other California establishments adhere to. According to the California Environmental Quality Act, the Big 4 deals fail to include the most basic environmental protection: the standard 55-day comment period for stakeholders. This stopped the only real opportunity community members had to voice environmental concerns about the proposed expansions of props 94-97. These exemptions will allow the Big 4 to control the gambling market in California, adversely affecting other existing tribal casinos who abide by the basic rules. It will also destroy the opportunity for fair revenue sharing between casinos if four tribes control 1/3 of the profits.

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Allowing the Big 4 to decide how much revenue is paid to the state will be a mistake. Other tribes pay a standard fee to the state for every slot machine in operation, but the Big 4 will be allowed to decide which slot machines are included in the revenue sharing formula. It seems counter-productive to allow the tribes to decide how much money the state will receive from their revenue. It is also against basic workers rights standards to allow the Big 4 to deny their workers basic healthcare and discrimination rights. The Pechanga tribe (Prop 94) has conspired to deny Pechanga families their benefits in order to increase their capita checks. 25% of the Pechanga tribe has already been denied their basic tribal civil rights including voting rights and elder care. Peter Dreir, PhD professor of Politics at Occidental College points out the four major flaws of props 94-97, “1) The amount of revenue guaranteed to the state falls far short of what other states have secured in similar agreements, and is not adequate compensation for the exclusive right the tribes are given to operate casinos in California. 2) Local communities will have virtually no voice in whether, and under what conditions, the proposed gambling palaces will be built and operated. 3) Five tribes, representing very few members, are reaping the lion’s share of the benefits of tribal gaming, while the remaining tribes struggle for economic and social survival. 4) There is a lack of independent oversight of casino operations to ensure that the tribes’ financial and other obligations are met, and criminal activities are dissuaded” (Dreir).

            There are many environmental and economic impacts associated with props 94-97 particularly in Riverside and San Diego counties. These deals will have adverse affects for

 

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Riverside County because it will silence local community input, ignore environmental damage and hurt local businesses that rely on the income received from the 17,000 additional slot -machines being proposed. These deals represent one of the largest expansions of gambling in U.S. history, the majority in Riverside and San Diego counties. Most importantly, environmental impacts and expansion of the casinos will not be reviewed. Studies show that each additional Pechanga slot machine will add eight additional car trips per day on Riverside and San Diego county highways; consider the customers, maintenance, and administration that go along with each additional machine. This will add an additional 48,000 cars per day just for the Pechanga casino alone, without even looking at the consequences. With this addition of cars on the highway traffic will increase, more firefighters and ambulances will be needed to accommodate an increase in accidents, and more police will be needed to monitor the roadways. Local polls in Riverside and San Diego counties show that they either wanted slot machine levels to stay the same, or decrease.

            Local government agencies have not provided any figures to the additional costs they will face due to casino expansion. Riverside and San Diego county officials are questioning their ability to cope with such large casino expansion in their area. Local governments are in a bind with the Federal Government regarding casino expansion. The Federal Government has respected tribal sovereignty within states that do not allow gambling. The Federal Government has chosen “no stance” for or against tribal gaming expansion because Federal Law states that tribal laws must stay only within Federal law, not the law of individual states. Essentially this

 

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means that local and state governments cannot look for Federal support against casino expansion.

In order to solve the problem with casino gambling an amendment needs to be made on the existing propositions. Certain tribes should not be favored or exempt from laws imposed on other tribes, and workers rights within the casinos should not be overlooked. It is important to let the tribes have their sovereignty, but allowing them to break fundamental business laws is not right. In a state that claims to be the leader in green/environmentally friendly policy, it is hypocritical that tribal casinos are exempt from basic environmental inspection and review. Californians need to pay close attention to the progress and actions of the Big 4 because vital action may be needed to repair a costly mistake, at least for the sake of Riverside and San Diego counties.

Works Cited

Blog Section. (2008, February). Retrieved April 20, 2008, from California Gaming Deals: www.nounfairdeals.com./blog/

Elections, C. D. (February 5, 2008). California Primary Presidential Election Pull-Out-Guide. Sacramento: State of California.

Peter Dreier, P. (2007, May 27). California Tribal Casino Compact Amendments: A bad deal for the state, local communities and most California tribes. Retrieved April 17, 2008, from California Progress Report: http://www.californiaprogressreport.com/2007/05/california_trib_1.html

Robert. (2007, December 11). Vote no on Props 94-97. Retrieved May 5, 2008, from Left in SF: http://www.leftinsf.com/blog/index.php/archives/2386

Vogel, N. (2008, February 1). Prop. 94-97 May Not Deliver the Money. LA Times .