Casinos follow election closely

Tuesday, Oct. 7, 2003 | 10:58 a.m.

CARSON CITY -- Nevada gaming companies will be watching the California election tonight with more than a passing interest, and they won't all be rooting for the same candidate, gaming experts say.

The person Californians choose as governor will have a major voice in how fast Indian gambling expands in the Golden State and whether it will have to pay the taxes nontribe casinos do.

Bill Bible, president of the Nevada Resort Association, said gaming officials will be monitoring the results to decide whether the outcome will be "a threat or an opportunity."

Gaming consultant Ray Koon of Las Vegas agreed that all casino interests will be following the election results closely.

Each tribe in California is limited to 2,000 slot machines. But they want to expand. A spokeswoman for the California Nations Indian Gaming Association said the tribes want to have as many slots as the market will bear.

They have been negotiating with Gov. Gray Davis to increase the number, but Davis has suggested the tribes pay a 25 percent tax on their winnings -- a proposal that has drawn stiff opposition from the Indians.

Any increase in slot machines could benefit Nevada slot makers such as IGT or the Nevada companies that run the gambling on tribal land in California.

Station Casinos Inc. is already running Thunder Valley, viewed as a highly successful club in Northern California. Other Nevada companies have signed agreements with tribes to operate gambling at locations in Southern California.

But other Nevada companies fear that lifting the limit on slot machines could drain off money from casinos in this state.

The California Division of Gambling Control says there are an estimated 50,000 slot machines operating in that state in 53 tribal casinos now. Three tribes have signed compacts with the state for gambling, but those still need to be ratified by the California Legislature and the Bureau of Indian Affairs.

In addition, there are nine other tribes that have approval but have not opened casinos.

The division said the total number of authorized slots is 64,657. The latest count in Nevada is more than 183,400 slots machines.

The National Indian Gaming Commission recently authorized tribes that have not signed compacts with the states to have an unlimited number of bingo slot machines, Koon pointed out.

Another major issue for Nevada gaming is that tribes pay no state tax on their gaming winnings. Major casinos in Nevada pay a tax of 6.75 percent on their slot winnings plus other state and local fees.

Koon also said there is a proposal that slot machines be allowed at card rooms and racetracks in California -- a move opposed by the Indians.

Arnold Schwarzenegger has criticized Democrat Lt. Gov. Cruz Bustamante and State Sen. Tom McClintock, a Republican, for taking campaign contributions from the tribes. One of Schwarzenegger's suggestions for reducing California's budget deficit is a re-negotiation of the compact between the state and the tribes to require them to pay taxes to the state on their slot winnings.

A proposed tax could reduce their profits and limit the money available for expansion, Nevada gaming interests have noted.

Bustamante is considered a supporter of Indian gaming. During the campaign Bustamante received major contributions from several tribes including $500,000 from the Pechanga Band of Mission Indians and $300,000 from the Sycuan Band of the Kumeyaay Nation.

California's Fair Political Practices Commission suggested he violated the spirit of laws that limit donations to $21,200 per donor. But Bustamanate says these donations are legal because they were received before the new rules.