January 25, 2008


Gaming Compacts: are we missing out on a better deal?

Propositions 94 -97
Amendment to Indian Gaming Compact
Referendum - Majority Approval Required

Propositions 94 through 97 are four similar (almost identical) gaming compacts with Sycuan (Prop 96) and Pechanga (Prop 94) casinos in San Diego County and the Morongo (Prop 95) and Agua Caliente (Prop 97) casinos in Riverside County. 

Basically these propositions would allow the four Indian tribes to expand the number of slot machines at each casino. For the Sycuan and Agua Caliente casinos the number would go from the current 2,000 slot machines to 5,000 and up to 7,500 for Pechanga and Morongo which would make them the worlds largest. At present each slot machine brings in approximately $130,000 a year in net profit. The four tribes are currently making $1.04 billion profit a year.

Let us say upfront that if anyone deserves to earn this type of money it should be the American Indian! The history of the American Indian and the atrocities committed against these people was and is indefensible. The American Indian had been figuratively and literally pushed to the fringes of American society to live their lives in poverty and isolation. The casinos have become their salvation and have thrust them back into the mainstream of American society.

With that said we have concerns with these propositions.

Our first concern with these propositions is that the casinos profit off the backs of the poor and minority communities. It was recently reported that: “players with annual incomes of less than $10,000 spent almost three times as much on gambling — in aggregate, real dollars — as those with incomes of more than $50,000.”

Casinos make their money on losers and tribal members are getting rich on the backs of those who can least afford lose their money. In turn the State is looking to balance their budget from these earnings, in a sense by taxing the poor. It has been stated that Californians must lose $60 billion to the slot machines authorized by these propositions if the promised government funding is to materialize.

Secondly, after you get through the complicated taxing tier for the slot machines the bottom line ends up being a tax rate of about 15% on about $4.3 billion dollars or $675 million in new income for the General Fund once all 25,000 new slot machines are operational. $675 million sounds pretty good but can’t the state do better than this. For example the State Lottery is taxed at a rate of 83% after expenses which go into the education fund. Surely the State can negotiate a better deal than 15%, why not a 50% tax on gambling profits?

Our third issue is that these Propositions take the process of auditing the tribes out of the hands of the State and allow the Indians to audit themselves? This makes no sense, there needs to be independent auditing to ensure accountability. The compacts also talk about the environmental impact, but it is vague and the language allows for the tribes to mitigate the problems but provides no recourse for the community to address the issues. We are reminded of the drop in the water table in the east county when the Barona Indians built a golf course and dried up the surrounding wells. The residents had little recourse to rectify the situation, in the meantime Congressman. Duncan Hunter was pushing legislation to ensure that Barona had enough water for their golf course, but was doing nothing for the surrounding homes.

This is gambling we are talking about here. Gambling addiction is on the same level as drug addiction or alcohol addiction, yet State Legislatures have come to look upon gambling revenues as their savior to their economic problems and as such they are willing to give up control and oversight for 15% in revenue. How long before we legalize marijuana or prostitution so we can tax those as well?

The casinos are here and there is no going back on that, but instead of giving up control and oversight the State Legislatures should be seeking more control and oversight and not sell their soles for a bump in revenue of 15%.

Last word on Prop. 96. This proposition is different from the other compacts in that this proposition will allow for an off site casino to be built. This could make the bay front property in National City, purchased by Sycuan several years ago, the home for their next casino. National City has the lowest median income in the county. Do we really want a New Orleans type casino on our bay front, sandwiched between a possible Chargers stadium and the existing ship yards?

 La Prensa urges you to vote “NO” on Propositions 94, 95, 96, and 97.

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