Secretive group plans California casino initiative

Seth Hettena

Monday, Jan. 21, 2002 | 9:40 a.m.

SAN DIEGO -- A secretive group is planning a $2 million petition drive for an initiative that would break state Indian tribes' monopoly on gambling and make California the third state to allow Nevada-style casinos.

Little disclosure about the measure's backers is required at this stage. That leaves horse tracks and card clubs, who have much to gain from the initiative, unsure whether to take it seriously.

The Secretary of State's office earlier this month authorized the group to begin collecting signatures for its 39-page proposal, called the Gaming Control Act.

It would mount an end-run around years of ballot fights and state compacts that allow slots and some card games on California tribal lands.

The measure would lift those restrictions for all 45 tribal casinos, 113 card clubs and all the state's 34 horse tracks, putting anyone with a gambling license on equal footing.

All forms of Las Vegas casino-type gambling -- from sports wagering to blackjack, poker, roulette, craps and unlimited slots -- could be offered to anyone 18 and older. Casinos could be open 24 hours a day, serve alcohol and install cash machines.

"The idea just is to level the playing field and not allow unregulated, uncontrolled gaming throughout California," said Craig Marlar, a spokesman for the initiative's backers.

New state agencies, styled after Nevada's, would be set up to license and regulate gambling operations. The state also would require the state to treat problem gamblers.

The Attorney General's office has estimated that widespread gambling could generate hundreds of millions of dollars in tax revenue.

With backers choosing to remain anonymous, it's not possible to verify whether they have the millions of dollars needed to mount what is sure to be a costly ballot fight if the measure qualifies.

Marlar declined to provide any details about the people behind the initiative. He said they wanted their identities kept private until the measure, a constitutional amendment, receives the more than 670,000 valid signatures needed to qualify for the ballot.

Marlar said he is in the beginning stages of gathering signatures. The deadline is June 27 to submit the petitions to the Secretary of State's office and qualify an initiative for the Nov. 5 ballot.

Even at this early stage, the initiative has touched a nerve. The Los Angeles Times urged Californians who oppose nearly unlimited gambling to refuse to sign the petition. "Some issues don't deserve to make it to a vote," the Times wrote in an editorial this month.

Those in the gambling industry also are watching carefully.

"I think it caught everyone kind of by surprise," said Susan James of the California Nations Indian Gaming Association, which represents 76 federally-recognized tribes.

The association opposes the measure, which would cost the tribes their monopoly on casinos. The association argues that voters' support of casinos did not extend beyond tribal lands.

"A lot of the voters still feel this is a non-gambling state," James said. "They want to keep it as contained as they possibly can."

Indian casinos offer slots and all table games except craps and roulette thanks to a voter initiative that passed in March 2000. Critics complain the tribes don't have to pay taxes and have used their newfound fortunes to become some of the biggest political contributors in the state.

Representatives of the card clubs and horse tracks -- both of whom stand to gain from the looser requirements in the initiative -- are withholding their full support until they know who's behind it.

"We would like to have parity. We would like to have a level playing field," said Haig Kelegian, president of the Golden State Gaming Association, which represents card clubs. "The point is: Where is the money coming from?"

The racing industry also would like to offer slot machines at racetracks, which has proved to be a boom to tracks in other states. But the industry is waiting to see who emerges from behind the measure, said Eric Johnson, spokesman for the California Authority of Racing Fairs.

Marlar, who is speaking for the backers, is president of The De Ville Group, a Palm Springs political consulting firm. The Gaming Control Act is the firm's first statewide initiative campaign.

Marlar said he has a small, personal stake in Full House Resorts Inc., a Las-Vegas firm that tried unsucessfully to get a casino for the Torres-Martinez Desert Cahuilla tribe near Palm Springs. Marlar said his stake in Full House has no connection with his work on the Gaming Control Act.

Even if the initiative fails to qualify for the ballot, the measure has borne out fears that it would be difficult to control the spread of gambling in California.

"You put the light switch on to become a gambling state and you can't turn it off," said Cheryl Schmit of Stand Up for California, a gambling watchdog group. "We are a gambling state."