Report compares casino proposals

Chris T. Nguyen

Wednesday, July 21, 2004 | 9:08 a.m.

LOS ANGELES -- A gambling initiative would provide millions of dollars less for local governments and also less money to the state than the new compacts Gov. Arnold Schwarzenegger signed with five tribes, according to a state report released Tuesday.

Unlike the governor's revised gambling agreements, Proposition 70 does not require casino-owning tribes to negotiate with neighborhoods on reducing problems, including crime and traffic, thus providing less money to communities, a report by the Legislative Analyst's Office said.

Schwarzenegger wants to defeat Proposition 70 and a separate gambling initiative on the November ballot, saying both threaten to derail his ongoing negotiations with tribes to share gambling revenue with the state in exchange for expanded gambling rights.

"This initiative would allow for unlimited expansion of gaming for a 99-year period while removing any ability for the state to guarantee important protections for local communities," said Schwarzenegger spokesman Vince Sollitto.

Proposition 70, sponsored by the Agua Caliente Band of Cahuilla Indians, would require tribes to pay about 8.8 percent -- the tax rate for California corporations -- of their casino earnings to the state.

In return, tribes would be allowed to operate as many slot machines as they want beyond the 2,000 limit and also games now banned in the state, including craps and roulette.

Last month, the governor reached new compacts with five tribes: the Pala Band of Mission Indians, the Rumsey Band of Wintun Indians, the United Auburn Indian Community, the Viejas Band of Kumeyaay Indians and the Pauma Band of Mission Indians.

The deal was designed to give the state $150 million to $200 million annually in return for allowing those tribes to operate additional slot machines beyond the current limit. The tribes are also paying $1 billion this year for state road projects.

The report said Proposition 70 would also provide less money to the state than Schwarzenegger's new agreements.

It's unknown how much less because the amount would be determined by additional slots tribes operate, said analyst Michael Cohen, who wrote the report.