California OK of casino expansion sets up political clash 4-19-07

Associated Press Writer

SACRAMENTO (AP) - The California Senate on Thursday approved the largest expansion of Indian gambling in the state since tribes were given the authority to operate casinos.

Before they begin installing 22,500 new slot machines, however, the tribes must persuade reluctant members of the Assembly, which is controlled by Democrats with deep ties to labor unions that oppose the deals.

The clash of California's political titans - labor vs. gambling tribes - will be compounded by pressure from Gov. Arnold Schwarzenegger. He negotiated the agreements last year and has bet on the Legislature approving the compacts to balance his spending plan for the budget year beginning in July.

Schwarzenegger is counting on the tribes to be able to install thousands of slot machines by July to begin bringing in the $500million annual share of casino winnings to the state provided for under the deals. The revenue is increasingly crucial for the governor this year to deliver on his promise of eliminating the state's chronic budget deficit given that state tax revenue is lagging $1.3 billion below forecasts.

“There's a lot of marbles on the table now,” said Jack Gribbon, California political director for Unite Here, the casino and hotel workers union that has promised to pour its resources into defeating the compacts.

“We're talking about an extraordinarily wealthy industry that's been very willing to throw its weight around ... If we do not oppose this now, I don't know why we would exist. At stake are the rights of 50,000 workers to address living wages, health care and job security for the next 23 years.”

The compacts approved Thursday allow five wealthy Southern California tribes that already operate 10,000 slot machines to install as many as 22,500 more, as well as card tables and other casino games.

The Senate also approved 99 slot machines for a tribe in far Northern California that has tried for years to get authorization for a gambling hall.

Combined, the six compacts would allow the tribes to install enough machines to fill more than 10 Las Vegas sized casinos and would represent a 50 percent increase in the number of slot machines operated by Indian tribes in the state. The tribal gambling industry in California already generates an estimated $7 billion in annual revenue.

The deals face their next hurdle in Assemblyman Alberto Torrico, DFremont, chairman of the Assembly Governmental Organization committee.

Torrico has warned that he believes the compacts do not go far enough to ensure tribes will pay their fair share of taxes on new slot machines. Specifically, he has said the compacts should include more robust auditing requirements, such as those included in previous arrangements with tribes that require independent accountants to certify the tribes' casino winnings.

Torrico also has warned that he will exercise his authority to hold a committee vote on the compacts, something his Senate counterparts did not do. He has said he may not even schedule the compacts for a hearing until after the Legislature debates the budget in June, as is typical with the majority of Senate bills heard in the Assembly.

“We will have hearings in the ordinary course of business. We are not going to fasttrack these,” Torrico told The Associated Press. “The governor's got bigger problems than the calendar when it comes to these compacts.”

Jeff Grubbe, vice chairman of the Agua Caliente Band of Cahuilla Indians, said he is fully aware the tribe still must persuade lawmakers in the Assembly.

The Agua Caliente would be allowed to increase the number of slot machines it operates at its casinos in Palm Springs and Rancho Mirage from 2,000 to 5,000. It was the only tribe to get a vote on its proposed expansion last year in the Assembly. The house soundly defeated the bill, largely along party lines.

“We have a lot of work to educate people about the compact and about what it means for the tribe and for California,” Grubbe said. “It's just a winwin proposition.”

Antigambling groups and the horse racing industry have joined labor in opposing the compacts and might be able to peal off critical votes for the compacts.

“I have my hopes pinned on the Assembly,” said Cheryl Schmit, director of Stand Up for California. “It seems Assemblyman Torrico and others are very supportive of the positions citizens have, and we have major concerns.”

There was little debate Thursday in the Senate, where President Pro Tem Don Perata said he believes it's not lawmakers' role to question the compacts that sovereign tribes have signed with the governor.

An Associated Press review last week found the tribes had spent $1.6 million in recent years to benefit the Democratic authors who carried the casino expansion bills in the Senate.

In asking her colleagues to support the casino expansions, Sen. Denise Ducheny, DSan Diego, stressed that the agreements contained the same labor protections included in the original compacts negotiated by former Gov. Gray Davis.

Sen. Sheila Kuehl, DSanta Monica, cited the labor issues and gambling's larger toll on society in urging lawmakers to vote against the bills. She said Indian gambling in the state had grown beyond what voters intended.

“Gambling is never a good thing for a state or a nation. It eats away; it's an addiction,” Kuehl said. “But we compromised and said this was going to help these poor tribes get on their feet. Well, they're so on their feet now they're getting billions of dollars a year. I say, 'Good for them,' but I can't vote for an expansion of gambling.”

California voters approved Proposition 1A in 2000, allowing the governor to negotiate compacts with Indian tribes to operate slot machines and other casino games. The agreements must be ratified by the Legislature.

Lawmakers approved 57 compacts negotiated by former Gov. Gray Davis in 1999, in anticipation the measure would pass. More compacts and amendments to the agreements were approved in 2003 and 2004. Until Thursday, nine compacts Schwarzenegger had signed since 2004 had awaited legislative approval.

The governor signed the majority of those deals as he sought reelection last fall, in the final days of the legislative session. In a statement Thursday, Schwarzenegger praised the Senate for passing the agreements.

“I believe these compacts are good for the state, the tribes and the local communities,” he said, urging the Assembly to quickly adopt them.

“Every additional day of delay costs the state millions of dollars for critical services that Californians rely upon,” he said.

In addition to Agua Caliente, the compacts would allow the Sycuan Band of the Kumeyaay Nation in San Diego to increase the number of machines it operates from 2,000 to 5,000. The Morongo Band of Mission Indians northwest of Palm Springs, the Pechanga Band of Luiseno Indians in Temecula and the San Manuel Band of Mission Indians in San Bernardino would be allowed to more than triple - to 7,500 - the number of slot machines they operate.