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LOS ANGELES (AP) — Gov. Arnold Schwarzenegger says
he’s counting on four wealthy Indian tribes and
their expanding gambling operations to help close
California’s massive budget shortfall.
Voters gave their blessing Tuesday to the deals
allowing the tribes to add thousands of slot
machines. Now the question is: will the money
really make much of a difference?
Propositions 94-97 give the tribes rights to
17,000 additional slot machines in exchange for
promises to share hundreds of millions of dollars
annually with the cash-strapped state. With about
96 percent of the votes counted Wednesday morning,
the measures were leading by a margin of 56
percent to 44 percent.
How much California will actually take in is up
for debate, especially in the next 18 months as
the state struggles to close an estimated $14.5
billion shortfall.
The tribes’ nonstop television ads in recent
months have promised California will get about
$400 million annually from the deals through 2030,
totaling nearly $9 billion. Schwarzenegger bet
weeks ago that they would pass, and his finance
team has budgeted for the tribes’ big checks to
begin arriving in Sacramento by the end of the
summer. That means he’s banking that they will
begin the work of installing new slot machines
almost immediately.
Even if the governor and tribes are right, the
deals would cover just 4 percent of the state’s
shortfall. And at most, the gambling revenue would
amount to less than one half of 1 percent of the
state’s general fund budget in any given year
through 2030.
The state’s nonpartisan legislative analyst,
Elizabeth Hill, has warned even those estimates
are too rosy. She says the governor’s betting on
far too much revenue, far too soon.
Even as the tribes and their supporters celebrated
their victory Tuesday night at a downtown Los
Angeles ballroom, Roger Salazar, spokesman for the
ballot fight, said it was too soon to say how
quickly the slots would be installed — or exactly
how much they’d be able to pay the state in the
next year.
“We’re probably looking at an additional $200
million over the next year but we’ll wait till the
dust settles before deciding how many slot
machines the tribes will add,” he said.
California’s casino industry is already second
only to Nevada’s, and the new gambling compacts
represents a 30 percent increase in the number of
slots in the state.
“Voters said yes to hundreds of millions of
dollars in new revenue for the state each year,
and once again said yes to standing with
California’s Indian tribes” said Salazar.
The deals would not have required voter approval,
but a coalition of two other gambling-rich tribes,
a horse track owner and a casino-workers’ union
gathered nearly a million signatures to force
referendums on the deals onto the ballot. They
raised over $30 million to defeat the agreements,
but the four tribes that stand to gain raised
about $104 million, for a blitz of television ads
to urge their approval.
Those opposed argued the deals unfairly
consolidate casino wealth in the hands of a few
tribes in the state while doing little to help
dozens of others that remain in poverty across
California. They also worried the deals would cut
into race track profits, increase competition and
curb workers’ rights.
“They outspent us 4-to-1 and that makes it tough
to win any political contest,” said Scott
Macdonald, spokesman for the opposition group, No
on Unfair Gambling Deals. “There are real concerns
about sharing more revenues with poor tribes,
protecting workers and local communities who are
losing a voice. We hope the governor is listening
if he wants to do more of these.”
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