Calif. group eyes casinos

David Strow

Thursday, Dec. 21, 2000 | 11:18 a.m.

California's drive toward expanded Indian gaming caused a jolt of concern throughout Nevada that's still echoing through the state's gaming industry.

Now, a Southern California retiree is pushing for a ballot measure that could be Nevada's worst nightmare -- the expansion of gaming off of reservations and into California's cities.

The proposed initiative, if passed, would give California cities and counties the option of legalizing commercial gaming. To place the proposed constitutional amendment before California voters in November 2002, Hollywood resident Robert Wilson will need 670,816 signatures.

The effort is embryonic at this stage. Only Wilson and his attorney are actively working on the proposal now, and the active gathering of signatures hasn't even begun yet. Wilson doesn't have a grassroots organization in place to gather the signatures, and he doesn't have financing for a petition drive lined up.

Having said that, Wilson believes he'll ultimately succeed. Wilson plans to lobby 1,500 California cities for their support, and the card-room and racetrack industries in California for financial backing. The first deadline for the petition is April, but Wilson said he has until five months before the election to gather the necessary signatures.

"If I don't (get the signatures by April), we'll just refile it," Wilson said. "We're going to get this on the ballot."

Wilson said he decided to move forward with such a proposal after Gov. Gray Davis signed compacts with California tribes that drastically expanded the amount and types of gaming the tribes would be permitted to have.

"I don't like what the Indians did," Wilson said. "I don't like what the governor did by giving a monopoly to the Indians in California. It destroys the gambling industry in this state."

The state's 125 card rooms, fearing they will be driven out of business by the tribal casinos, have protested the gaming compacts signed by Davis with the tribes. California legislators approved a bill earlier this year that would have allowed blackjack in the card clubs, but Davis vetoed the measure, saying such games could only be offered if the state Constitution was amended.

In its current form, the proposed amendment would do just that. It would permit any kind of "Las Vegas- and Atlantic City-style gambling" in the state, including "sports wagering, dice games, slot machines and banking and percentage games played with cards." If passed, voters of California cities and counties would have to vote to legalize gaming in their community before gaming could be offered.

Bill Eadington, director of the Institute for the Study of Gambling and Commercial Gaming at the University of Nevada, Reno, believes the political deck is stacked against the success of Wilson's petition drive.

Still, he said, the potential impact such a measure could have on Nevada makes it worth watching, Eadington said. California is by far the largest customer base for Nevada casinos, accounting for more than 30 percent of the state's gaming business.

Nevada is already expected to take a hit from the expansion of Indian gaming in California, with markets like downtown Las Vegas, Reno and Laughlin taking the hardest blow. How hard that blow will be is still unknown, as the extent of Indian gaming in California remains unknown.

"From Nevada, we'd watch with fascination and trepidation," Eadington said. "If such a thing were to pass, you would find a lot of poor communities, such as ones that authorize card clubs, looking to gaming as a way to substantially support local government. You'd end up with pockets of casino gaming in California.

"It would essentially Nevada-ize California."

And how Nevada gaming operators would feel about that remains unknown. It would give Nevada's gaming companies the ability to open up shop in California, but it could also put their heavy Las Vegas investments at risk.

"At the moment, Las Vegas is incredibly schizophrenic about California," said Alan Feldman. "Some companies are deeply afraid of the expansion of gaming in California. Other see a possible new business opportunity. There's absolutely no consensus of opinion about California at the moment."

But expect a powerful political enemy to emerge if the petition drive gains any footing. California's tribes, having just won the right to operate casinos, will be loathe to surrender their monopoly without a fight.

"Tribes in California have demonstrated willingness and fairly decent skill at dealing with political issues," Eadington said. "They spent $100 million on (Proposition) 1A (the amendment legalizing tribal gaming in California), and this would be an open invitation for the tribes to do what's necessary to stop it. The tribes have a very vested interest in fighting it at all costs."

But if such a measure did pass, what would happen to Nevada?

"It's too early to tell," Feldman said. "It could be perceived as a threat, it could be perceived as an opportunity, depending on the nature of how it moves forward. It's entirely too early to know."

Wilson believes that major gaming companies would move in to build California properties if the amendment passed, and believes MGM MIRAGE majority shareholder Kirk Kerkorian would be among the first to build there. But even he doesn't believe full-bore legalized gaming in California could ever knock out Las Vegas.

"I'm sure if they (Las Vegas companies) wanted to say in the gambling business, they'd have to (build in California)," Wilson said. "I think we're going to get the gamblers that just want to gamble. Those that want to go on vacation, see Las Vegas for what it is today, will continue to go there.

"You've got some fantastic structures there now. It's a playground."