2004-10-23 04:00:00 PDT Sacramento -- The last time Californians saw the issue of gambling on a ballot, the question was whether to allow big-time casinos on Indian land.

Six years later, things are more complex. With the state now dotted with thriving tribal gaming houses and its freeways ringed by their beckoning billboards, voters are being asked to decide Propositions 68 and 70 -- two measures that mine the public's feelings about the multibillion-dollar industry they helped create.

"Inherently, ballot questions are awkward ways to make these decisions," said Elizabeth Garrett, director of the Initiative and Referendum Institute at the University of Southern California. "Even though these things seem to have a lot of little details, a lot of them are fundamental value decisions. What do we think about gambling, the amount of it and limiting it to Indians?"

With Gov. Arnold Schwarzenegger continuing to push the prosperous tribes to help lift the state from its deep deficit, voters must now decide whether his new approach is enough.

Until a raft of campaign ads began airing, voters may have thought the state's relationship with tribal casinos had already been cemented by Schwarzenegger. His recall-campaign calls for Indian casinos to pay a "fair share" of their profits culminated in new deals signed with five tribes in July.

What followed, however, has placed the web of competing gambling interests on rare public display in a multimillion-dollar slugfest.

Proposition 70 would allow each tribe the right to expand their casinos limitlessly and add any types of games they wish in exchange for paying the roughly 9 percent corporate tax rate.

Proposition 68 would allow casino gambling to expand to 11 of the state's card clubs and five of its racetracks, should all the state's gaming tribes not agree to share 25 percent of their gaming proceeds with the state. California has more than 50 gaming tribes, and the prospect of each sovereign government agreeing to the idea is considered dim.

If the tribes don't agree, the racetracks and card clubs would be entitled to 30,000 slots among them. They would then pay 33 percent of their net gambling proceeds into a statewide fund to benefit various child protective, police and fire agencies. Backers estimate the state could see more than $1 billion in annual proceeds.

Schwarzenegger's new deals lifted a 2,000-per-tribe slot machine cap mandated by the 1999 deals. In return, the tribes that struck the deals agreed to float a $1 billion bond the state plans to use for transportation projects and to pay fees on their new slot machines. The state will receive upward of $125 million annually from the compacts, according to administration estimates, though some legislative Democrats have said the amount could be less than $60 million.

The new compacts feature new labor and environmental provisions, which alienated many tribal leaders who saw them as potential infringements upon Indian sovereignty.

Those objections propel Prop. 70. Its backers, primarily two successful Southern California gaming tribes, say the measure reduces the state's quest for a share of tribal profits to a purer, more basic form.

In effect, tribes could throw out their prior deals, new or old, and lock in terms mandated by the initiative.

Backers say Prop. 70 could bring in $2 billion to the state over five years, though the nonpartisan Legislative Analyst's office -- while offering no projection -- said Schwarzenegger's deals would yield more over time.

"If you don't pass (Prop.) 70, it's a vote for the status quo," said Jamie Fisfis, a spokesman for the campaign. "You're allowing the process that's currently in place to go forward -- and we think that deserves some considerable dissection."

Todd Harris, Schwarzenegger's campaign spokesman, countered that Prop. 70 binds the state's hands in negotiations with other tribes and creates an unregulated gaming monopoly.

"There are dozens and dozens of tribes that don't have compacts," he said. If the measure passes, "Prop. 70 becomes your compact. That's it."

While Prop. 70 continues its well-financed campaign, Schwarzenegger has fought it and Prop. 68 as well -- even as backers of that measure have given up. Prop. 68 is still on the ballot, the governor notes, and it, too, would have far-reaching implications for California.

For the Bay Area, the passage of Proposition 68 would likely mean the advent of so-called racinos -- casino-racetracks at Golden Gate Fields in Albany and Bay Meadows in San Mateo -- and slot machine gambling spreading to card rooms such as Artichoke Joe's in San Bruno; California Grand Casino in Pacheco; and Lucky Chances Casino in Colma. Eight Southern California card rooms would also gain slot machine rights.

Backers have argued that the measure would keep gambling in areas where the public already expects it while allowing society to share in the profits. Schwarzenegger and tribes portray it as a brazen attempt to encroach on the state's approach to casino gambling that would bring a host of headaches.

Indian gaming propositions


Mandates all of California's casino-owning Indian gaming tribes give 25 percent of their annual "net win" to the state. Should any fail to do so, 30, 000 slot machines will be distributed among 11 card clubs and five horse racetracks, which will in turn place 33 percent of their casino profits into a fund to benefit various child protective, police and fire agencies.

Argument in favor: Embodies Schwarzenegger's original "fair share" notion of extracting 25 percent of tribal profits from casinos, and aims to guarantee that the state will, through Indian casinos or those of traditional gambling interests, see hundreds of millions in revenue.

Argument against: Would spread gambling to several urban locations while breaking tribes' voter-approved exclusive right to operate casinos.

For more information: www.Fairshareforcalifornia.org (in support); www.no68and70.org (against).


Sets terms for all compacts between California and gaming tribes, allowing tribes to pay California's roughly 9 percent corporate tax rate in exchange for the right to expand their casinos at will.

Argument in favor: Would likely result in at least hundreds of millions annually for the state and provides an equitable approach favored by a broad coalition of tribes.

Argument against: Undermines Schwarzenegger's approach to negotiate deals individually and would allow environmental and labor gains made in his first five deals to be effectively thrown out.

For more information: www.yeson70.com (in support); www.no68and70.org (against).