Voting “yes” or “no” on any of California’s perplexing ballot propositions always feels like a gamble. Each side has seemingly valid arguments, endorsements from respected political and union leaders, and millions of dollars to pour into advertisements that confuse the issues at hand. Such is the case with Propositions 94 through 97, which amend a 1999 compact between California and four major Native American tribes to provide for a staggering increase in slot-machines and a reallocation of gambling revenues. While there appears to be a large upside to Propositions 94 through 97, this Tuesday, voters should vote “no” on this gratuitous expansion of in-state gambling, despite the allure of badly-needed state funds.
The sheer scale of the proposed expansion, which authorizes 17,000 new slot machines, would more than triple the current maximum allowed, outnumbering the totals of a dozen of Las Vegas’s biggest casinos. What would be one of the largest casino expansions in U.S. history is far from the modest amount voters approved with Proposition 1A in 2000. The sizeable increase would naturally have a serious impact on fiscal, environmental and labor issues, in addition to skewing the power dynamic between tribes and the state. Four tribes out of the 108 in California would control more than one third of tribal gaming revenue.
Proponents of Propositions 94 through 97 have emphasized the benefits of the projected nine billion dollars in revenue that California would receive by 2030, pointing out that Governor Schwarzenegger has declared an economic state of emergency in response to the state’s wilting economy. The propositions ostensibly promise several million dollars annually to the state, which may be used to fund education, healthcare or other services.
But this argument is unpersuasive for several reasons. Firstly, the gambling revenue would constitute only about one hundredth of a percent of the state’s budget, inconsequential in the face of a deficit greater than 14 billion dollars and disproportionate to the amount of power the Pechanga, Morongo, Sycuan and Agua Caliente tribes would accumulate as a result.
Secondly, the money would go to the state’s $100 billion General Fund, from which the Legislature is able to allocate funds however it chooses. There is no guarantee that the money would be spent on education or the services proposed, and it is entirely possible that funding previously allotted for such programs may be reduced and diverted with the gambling revenues expected to fill the vacuum.
Moreover, the four tribes’ previous annual payments to the Special Distribution Fund (SDF) — currently ranging from 2.6 to 29 million dollars a year, depending on the tribe — would end. The SDF funds programs to help with gambling addiction, subsidizes the costs state agencies spend on regulating tribal casinos, and evens the difference in the Revenue Sharing Trust Fund, which distributes gambling revenues among less powerful tribes. Sending the money, instead, to an amorphous General Fund is an inadequate substitute.
The financial impact in the Riverside area where three of the four tribes’ casinos are located would be significant. Assuming the tribes are successful in recruiting more gambling, especially from out-of-state, local businesses would likely profit. However, the money being gambled away, it is safely argued, might have done more for California’s economy if spent at taxable locations off-reservation, to say nothing of its utility in paying bills, mortgages and education costs. Even were there to be a net profit from the increased gaming, losses from in-state gamblers would partially offset the small percentage the tribes would pay the state.
There are additional concerns over environmental and labor regulations, which are less stringent for the four tribes in question than they are for the smaller tribes. Currently the tribes are not subject to the California Environmental Quality Act, requiring government oversight on projects, and Propositions 94 through 97 still fall short of truly addressing the environmental impact that the casino expansion will have on the surrounding area. The casinos have also been criticized for failing to adhere to adequate labor standards, including ensuring healthcare for workers and allowing workers to organize.
These propositions have invited hosts of other worries about state control over casino inspections, setting precedents for future expansions and encouraging the evils of gambling. While the gambling propositions will bring California some revenue, the negatives of having a few privileged, insulated and extremely powerful tribes operating without serious oversight or regulations far outweigh the perceived advantages. Don’t take a gamble this Tuesday; vote “no” on Propositions 94 through 97.

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