csua.org/u/8ri -> story.news.yahoo.com/news?tmpl=story&cid=2026&ncid=2026&e=3&u=/latimests/20040825/ts_latimes/californiaonpathtobecomenationsgamblingcapital
By Dan Morain Times Staff Writer SACRAMENTO -- A state once skeptical of wagering is in the midst of a gambling boom that could double casino revenue in coming years.
Subscribe to the Los Angeles Times In time, according to gambling industry officials and economists, the Golden State almost surely will pass Nevada as the nation's biggest gambling venue. The fast expansion of gambling marks a major shift for the state. For 50 years -- from 1933, when the Depression-era electorate approved horse racing, to the mid-1980s -- gambling remained limited in California. they would drive to Nevada," said Roger Dunstan, who in 1997 wrote a study about gambling in the state for the California Research Bureau, part of the state library. As cities approved card rooms in an effort to replace property tax revenue lost after Proposition 13, voters statewide approved the lottery as a way to help pay for schools. What was a trickle became a flood after ballot propositions in 1998 and 2000 successfully pitched Indian gambling as a road toward economic independence for tribes. Now, the state has more than 60,000 slot machines, the most lucrative game for any casino owner, and tribal casinos generate roughly $5 billion to $6 billion annually. For now, California's gambling industry remains considerably smaller than Nevada's, which has 220,000 slots and generates more than $9 billion in annual revenue. Moreover, Indian casinos, which are sprinkled throughout the state, are not likely ever to be concentrated in one area that would rival the Las Vegas Strip as a tourist attraction or gambling center. Still, the growth in California gambling is sure to continue. The demand is there," said Scott Nielson, executive vice president of Station Casinos Inc. The company has the contract to manage Thunder Valley, the highest-grossing casino in California, owned by the 255-member United Auburn Indian Community. Other corporations synonymous with gambling, including Trump and Harrah's, are betting on the future of California's tribal casinos. Steve Wynn, who built the Mirage and Bellagio in Las Vegas, is a potential investor in a proposed Indian-owned casino in Garden Grove near Disneyland. Given California's population, the take from tribal casinos could double in the next few years, said Bill Eadington, director of the Center for the Study of Gambling and Commercial Gaming at the University of Nevada, Reno. Deron Marquez, chairman of the San Manuel Band of Mission Indians, owners of a major casino in the hills above San Bernardino, predicted gambling revenue in California would overtake Nevada's by 2010. Critics of gambling say the expansion, and particularly the location of more casinos near population centers, will lead to more gambling addiction. Leo McCarthy, who served on the National Gambling Impact Commission in the 1990s. "We'll simply grow more quickly the number of pathological and problem gamblers. It will produce a population more likely to commit crimes to get back money they think they will use to win back what they lost." The problems associated with expanded gambling have become issues in the campaigns over two initiatives on the November ballot, Propositions 68 and 70, that will help determine how large the industry gets.
web sites) seeking the same rights as Indian tribes to operate slot machines in the state. But even if the court rejects the card rooms' appeal and both ballot measures fail, Gov.
web sites), seeking new money to boost the state's treasury, already has opened the way for substantial casino expansion. Schwarzenegger has scrapped a limit imposed by his predecessor, Gov.
web sites), that held Indian casinos to 2,000 slot machines or fewer. Schwarzenegger has been authorizing tribes to add as many slots as the market will bear, so long as they promise to pay the state up to 25% of the profit. No one really knows how much the market will bear, but economists who have studied the matter, and gambling companies that want to invest money, agree that California is nowhere close to saturated. Unlike Nevada, which relies primarily on tourists from other states, California has a huge population of its own for casinos to serve. Already, Nevada casinos, particularly those in Reno, have been losing customers to California. Unlike Nevada, California does not allow sports books, craps or roulette, although tribes have devised card games that mimic the classic casino games. The expansion of California gambling took a step forward Monday, when Schwarzenegger signed compacts with five tribes, four of which currently have no casinos in the state, allowing them to begin gambling. Once they open their casinos, the state will have 58, up from 54. The most notable of the agreements would allow the once-landless, all-but-forgotten Lytton Band of Pomo Indians to open a casino in the Bay Area city of San Pablo. The tribe, which has 259 members, initially contemplated 4,000 slot machines. After legislators protested the size and the problems, such as traffic congestion, that it could cause, the Lytton band agreed over the weekend to scale back its proposal to 2,500 slots. The deal permits Lytton to ask the state to approve more machines as early as 2008. The Legislature is expected to vote this week on whether to ratify the pact, with significant opposition remaining among legislators. But it's on the main East Bay freeway and near the geographical center of the nine-county region, surrounded by 67 million residents, more than three times Nevada's population. Other projects being planned include new development for the area around Thunder Valley. In its first year of operation, Thunder Valley, in the town of Lincoln, 30 miles east of Sacramento, had 1,900 slot machines and earned more than $340 million -- more than any casino in the state. Station, which operates Thunder Valley, also has contracts to help three other tribes open casinos outside Fresno, near the college town of Chico and in the Sonoma County wine region north of San Francisco. Beyond the casinos, a number of tribes are adding golf courses, retail outlets, big-name entertainers and other attractions. The Legislature is expected to vote this week on a bill by Assemblyman Lou Correa (D-Anaheim) that would cut costs for tribes by allowing them to finance casino-related projects, including parking lots, sewer systems and roads, with tax-exempt bonds -- the same type used by local governments to finance public works. Several factors help explain the rapid expansion of California's gambling industry: California is home to 107 recognized Indian tribes -- a quarter of the national total. Under federal law, the state must negotiate with tribes seeking to open casinos. An additional 54 groups have petitions pending with the US Bureau of Indian Affairs seeking to become recognized tribes, according to the anti-gambling group Stand Up for California. Once a tribe is recognized, it can get a reservation, which need not always be in the part of the state in which the tribe originated.
voting record), a Democrat who represents San Pablo, pushed legislation in 2000 decreeing that a card room and parking lot on 95 acres in San Pablo, far from Lytton's original home in Sonoma County, become reservation land.
voting record), a Sacramento-area Republican, pushed legislation restoring tribal status to the United Auburn Indian Community, the group that owns Thunder Valley.
As Indian tribes and would-be tribes eye gambling as a way to economic success, politicians see casinos as a source of revenue. With opposition to general tax hikes still high, gambling has become a way to balance budgets. Schwarzenegger and his aides say 10 deals he has struck with tribes this summer will generate a one-time payment of $1 billion this year, and as much as $400 million in annual payments in years to come. To an electorate skeptical of gambling, campaign consultants tout ballot initiatives that allow more games as anything but a gambling expansion. The consultants pushing the initiatives on the November ballot, for example, say they are aimed at requiring that tribes pay a "fair share" of their profits to state or local governments. ...
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