Prop 68 backers end campaign, pursue lawsuit

Don Thompson

Thursday, Oct. 7, 2004 | 9:10 a.m.

SACRAMENTO -- Backers of Proposition 68 dropped their campaign Wednesday to persuade voters to pass a ballot initiative that would end Indian tribes' slot machine monopoly and expand gambling at horse tracks and card rooms.

Supporters concluded they would lose at the polls Nov. 2 despite spending $24 million, including $12 million on television advertising, said Rick Baedeker, chairman of the Fair Share for California campaign.

"It got totally muddled. It got totally confused," said Baedeker, who also is president of Hollywood Park racetrack.

The initiative's supporters, operators of card rooms and race tracks, will concentrate instead on a lawsuit to block Gov. Arnold Schwarzenegger from signing new gambling agreements with tribes, a suit the state treasurer says may delay $1 billion in state borrowing.

Polls showed a majority of Californians want tribes to pay a portion of gambling profits as the proposition proposed, but voters were confused by the "almost incomprehensible, if not incoherent" ballot title, Baedeker said. No amount of spending could have reversed that view in a month, he said.

Individual tracks and card rooms will continue to oppose Proposition 70, which would lock in tribal gambling agreements negotiated by Schwarzenegger, but also require tribes to pay the same corporation tax as other businesses, Baedeker said.

Schwarzenegger opposes both initiatives, and campaigned Wednesday in Irvine against the measures that would undermine his negotiations with tribes.

"I was pleased to learn that the special interests behind Proposition 68 are pulling the plug on their quest to put mega casinos in the heart of California's urban areas," he said. "But the fight is not over. Proposition 68 will still appear on the ballot and I will not let up in my campaign to let people know that it is a raw deal for California taxpayers."

Schwarzenegger's opposition was key to undermining the Proposition 68 campaign, Baedeker said.

Television ads already purchased for Proposition 68 will continue to run through the end of the week.

In addition to pursuing a lawsuit filed Sept. 16 in Alameda County Superior Court by four racetracks, including Hollywood Park, and fighting Proposition 70, track and card room operators will continue lobbying voters and will likely try a future initiative to allow them to operate slot machines.

"This isn't about greed. It's about survival," Baedeker said.

He said the future of thoroughbred racing is in jeopardy without slot machines.

California Treasurer Phil Angelides is still analyzing the racetracks' lawsuit and has reached no conclusion on whether it has merits, said spokesman Mitchel Benson.

But Benson said the suit could pose a threat to the sale of bonds, which would be used for transportation improvements.