States look to gambling in tough economic times

Rebecca Cook

Thursday, Oct. 28, 2004 | 9:11 a.m.

SEATTLE -- California and Washington state are in the midst of a high-stakes, election-year showdown with American Indian tribes over casino gambling.

Voters in both states will decide Tuesday whether to take a bite out of tribal casinos' business by expanding non-tribal gambling to boost state revenues and provide tax relief. Both sides are spending heavily to defend their turf.

Four other states have gambling measures on the statewide ballot this year -- an attempt to cash in on the soaring popularity of gambling following a decade that saw a rapid expansion of Indian casinos around the nation.

Experts say gambling money looks like a sure bet to initiative sponsors in lean economic times -- whether their goal is lowering taxes, improving education or simply shoring up a weak state budget.

"Gambling is a very popular way to go, very well accepted," said Las Vegas political consultant Nancy Todd Tyner, who has worked on pro-gambling issues across the country. "When you have budget shortfalls, it's a very easy fix."

In Washington state, voters will decide on a ballot initiative that would allow up to 18,000 slot machines across the state. The populist twist is that the 35 percent tax on the machines would pay for property-tax reduction.

Washington tribes have spent more than $5 million to defeat the initiative, supported by a broad coalition of civic and church leaders. A recent poll showed voters about evenly split.

Down the coast in California, voters will decide on two competing gambling measures, but the smart money is on both failing. Proposition 68 would force tribes to pay a quarter of their slot machine revenues to local governments. If the tribes refused to pay, the state would let other businesses operate up to 30,000 slot machines, taxed at 33 percent.

Proposition 70, which is being pushed by a handful of casino-operating tribes, would expand tribal casinos from small-scale gambling parlors to full-fledged Las Vegas-style casinos, complete with table games such as craps and roulette.

Proposition 68 proponents pulled back support of the measure recently, citing confusion between the two proposals. A recent poll showed that most California voters don't know much about either initiative and are inclined to vote no. Gov. Arnold Schwarzenegger has come out against both.

In both Washington and California, the campaigns boil down to industry battles: non-tribal gambling versus tribal gambling. The tribes want to hold on to the monopoly they have on slot machines, and the other casinos want a piece of the action.

The names of these ballot measure campaigns make it sound like a civil rights battle is unfolding: "A Fair Share for California," "Floridians for a Level Playing Field," and "Just Treat Us the Same" in Washington state.

Scratch the surface of the debate and you'll find years of built-up resentment against the tribes.

"We have industries who are willing to pay a voluntary tax and Indians who want to keep an exclusive thing. I think over time the Indian community will wake up and realize they too are stakeholders in this society," said Earl Bender, campaign manager for Florida's constitutional amendment No. 4, which would allow South Florida residents to vote on allowing slot machines at a few locations. Taxes on the machines would pay for improving education.

The notion that people are clamoring to get the same treatment as American Indians strikes many tribal members as a bitter irony, considering the nation's history of genocide and broken treaties and the current reality of high poverty rates and low life expectancies on reservations.

Tribal leaders point out that their casino profits are taxed at 100 percent -- not by the state, but by tribal governments to pay for schools, child-care centers, health clinics, housing and other services.

"For the first time in its history, the tribe is able to provide scholarships for our children, able to buy back land, able to finally talk to lending institutions about diversifying our economic base," said Brian Cladoosby, chairman of the Swinomish Tribe in northwest Washington state, which operates a casino and opposes the gambling initiative.

Nebraska and Oklahoma also have gambling initiatives on the ballot, but tribes are not heavily involved in campaigns there. Oklahoma voters will decide on a lottery proposal, and Nebraska voters will decide on two competing measures to expand gambling. Michigan is deciding a gambling-related initiative that would require a statewide vote before any other new, non-tribal casinos can open.

In Washington, tribal leaders believe if they don't defeat this initiative, non-tribal gambling companies will continue chipping away at their business.

"They want the same as us," Cladoosby said. "The next year they'll have twice as more. It's like an addiction."