Tribes Spending Heavily on Casino Measure

California Indian tribes seeking to preserve and expand their casino operations have anted up a whopping $24.6 million to win passage of Proposition 5, and Nevada casinos have begun responding with their own funds to fight the November ballot measure, according to newly filed state campaign finance reports.

The result of the early spending has been an unprecedented mid-summer TV advertising blitz, which could intensify further as the election nears. The contest could eclipse previous spending records for a ballot initiative campaign.

“Obviously, this is going to be a good year to own a television station in California.” said Jim Mulhall, spokesman for the Nevada Resort Assn., whose members include casinos that have already contributed to the No on 5 campaign.

The Indian tribes are hoping to keep--and build upon--their existing casino operations, which they say generated about $632 million in net revenue in 1997, mostly through slot machines that state and federal authorities are trying to unplug because they are deemed illegal in California.

Las Vegas and Laughlin casinos, meanwhile, would initially lose between $258 million and $310 million in revenue a year, according to a recent Bear Stearns & Co. financial report, if Indian casinos are allowed to maintain and expand their gambling operations in California.

Already, the money raised easily eclipses the amount raised at about the same point in the 1988 battle over insurance reform initiatives--the costliest ballot measure battle to date. By July 22, 1988, the insurance industry had raised $17.6 million.

Through June 30 of this year, the Yes on 5 campaign had raised $24.6 million in donations and loans, according to campaign statements filed with the secretary of state’s office.

Most of the money comes from tribes operating three of the most lucrative Indian casinos.

Other large casino-operating tribes in California had yet to contribute by the June 30 reporting deadline but are expected to add to the campaign war chest in the weeks ahead.

Opponents of the measure collected about $930,000 through June 30--and spent $1.2 million, mostly toward the end of the disclosure period to pay for about a week’s worth of television commercials aimed at blunting the early TV barrage by the gaming tribes. Since then, both sides have accelerated their TV campaigns.

The next campaign reporting period, which closes Oct. 5, is expected to more closely reflect the comparative resources of the two sides.

Competition Faces ‘Deepest Pockets’

Proposition 5 would allow Indian casinos to operate slot machines and build more gambling halls. The measure, which is destined to be contested in the courts if approved, asks voters to directly approve casino regulations written by the tribes themselves.

Nine tribes have recently adopted regulatory terms negotiated with Gov. Pete Wilson, but most of the state’s three dozen gambling tribes say the conditions are too restrictive.

Finance reports show the tribes spent about $7 million in an intense television and mass-mailing petition drive to qualify the ballot initiative for the Nov. 3 election. Through June 30, they spent $6 million more to continue their campaign. Financial statements indicate that they had spent only about half of their resources as of June 30, with about $12.3 million in cash on hand.

The biggest support for Proposition 5 so far includes a $9-million loan, and $1.1 million in cash, from the San Manuel Indians near San Bernardino; a $9.3-million loan from the Morongo Indians near Palm Springs; and $3 million in cash from the Viejas Indians east of San Diego. All three operate lucrative casinos--but the Viejas tribal council, hedging its bet, has agreed to operate its casino in accordance with Wilson’s conditions, should Proposition 5 be rejected.

The loans are considered equivalent to cash because they are unsecured and no interest on the money is charged.

The statewide tribal coalition began its television blitz in May, with opponents responding in late June with their own commercials--just days before the deadline for the first financial reporting period.

The reports show that Nevada casinos contributed $900,000 to fight Proposition 5, including $200,000 each from Caesars World, Inc., Hilton Hotels Corp. and the Primadonna Resorts, the latter of which operates three casinos at the California-Nevada state line.

Also contributing to the No on 5 campaign were the Mirage Resorts, Inc., $150,000; Circus Circus Enterprises Inc., $100,000; and Station Casinos in Las Vegas, $50,000.

“We’re up against a formidable foe,” said Nevada resort spokesman Mulhall.

“The Nevada casino resorts are in favor of gaming, when it’s done legally and when it meets its obligations to its community and is thoroughly regulated.”

Several California card clubs also have contributed, the largest being $25,000 from Artichoke Joe’s Casino in San Bruno.

The contributions against Proposition 5 by Nevada gambling companies might appear ironic, given the most recent No on 5 television commercial, which depicts casino signs, in all their neon glitter, sprouting up out of California soil.

A woman stares in disbelief at the sight and exclaims, “We don’t have to put up with this!”

The Yes on 5 campaign, in its latest commercial, calls the opposition’s campaign “the worst Indian anti-scare campaign in California history,” and says that the proposition would only allow Indians to have “limited gaming on tribal lands.” The ad also predicts that “Nevada casinos will spend tens of millions of dollars” to fight the measure.

A spokesman for Californians for Indian Self Reliance, the pro-5 campaign organization, says it will face “the deepest pockets that Californians have ever seen” in a statewide political battle--Nevada gambling interests who want to thwart competition from Indian casinos. “The fact that Las Vegas interests have come up with $900,000 of the $930,000 that they reported so far makes it pretty clear who the opposition campaign is being conducted on behalf of,” said Dan Pellissier, spokesman for the Yes on 5 campaign.

The tribes will spend what it takes, Pellissier said, because “they’re fighting for a way of life that they’ve been able to achieve only in the last decade, and this will be a small price to pay.”

Indeed, the early level of spending is virtually unprecedented, according to political consultants uninvolved with the campaigns.

Said consultant Bill Carrick:

“The message that the ‘Yes’ side is sending to the ‘No’ side is, ‘We’re in this for the long haul and will spend whatever we need to spend, to win, so if you want to remain competitive, here are the table stakes. We’re in for $25 million. You better ante up.’ ”

Contributions Toward Governor’s Race

Newly released campaign finance forms show that Indian gambling tribes have also contributed at least $315,000 in the governor’s race--to Democrat Lt. Gov. Gray Davis.

Davis, the reports show, significantly out-raised his Republican foe, Atty. Gen. Dan Lungren, through June 30.

Davis raised almost $5 million between May 17 and June 30, and entered the summer with $4.5 million in the bank. Lungren raised $2.4 million during the six-week period, and had $3.3 million left for the November race.

Davis also got $500,000 from trial lawyers. But his largest single source of money came from organized labor, which sees the fall election as a chance to elect an ally as governor for the first time in 16 years.

The California State Employees Assn. gave him $280,000, while the American Federation of State, County and Municipal Employees gave him $275,000. The state and national arms of the Service Employees International Union gave him a combined $300,000, while the California Teachers Assn. gave him $250,000.

In all, Davis spent $8.1 million to capture the Democratic nomination, while Northwest Airlines executive Al Checchi spent $32 million this year in his failed campaign. Rep. Jane Harman, the third Democrat, had not filed her report by Monday.

Lungren, meanwhile, claimed only three donations reaching into the six figures between May 17 and June 30. His largest donor was the national Republican Senate campaign committee, which gave him $200,000.

Lungren received donations of $50,000 from AGI management of New York, Toyota Motor Sales of USA, convalescent hospital owner Thomas Plott, and financier Howard Ahmanson’s company, Fieldstead. Among donors giving him $25,000 were Atlantic Richfield and Pabst Brewing Co.

Times staff writer Dan Morain in Sacramento contributed to this story.

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

An Expensive Measure

Proponents of Proposition 5, the California Indian gaming initiative, have raised nearly $25 million in donations and loans, while the No on 5 side, which began its campaign late in the reporting period that ended June 30, has raised about $930,000, mostly from Nevada-based casinos, according to financial disclosure statements filed with the secretary of state. Here are the largest contributors reported so far.

YES ON 5

*--*

Cash donation Loan* San Manuel Indians $1.1 million $9 million Morongo Indians 0 $9.3 million Viejas Indians $3 million 0 Others $2.2 million

*--*

Total donations and loans: $24.6 million

****

NO ON 5

*--*

Cash donation Loan* Caesars World Inc. $200,000 (None) Hilton Hotels Corp. $200,000 Primadonna Resorts $200,000 Mirage Resorts Inc. $150,000 Circus Circus Enterprises Inc. $100,000 Station Casinos $50,000 Other donors $30,000

*--*

Total donations: $930,000

* Loans are unsecured and interest-free.

Source: California secretary of state