A Non-Gambler’s Winning Hand on Tribal Casinos

Gray Davis was a college student when he drove to Las Vegas to gamble for the first time. That was also his last time. “I had a very unfortunate experience,” he recalls.

“I must have lost nine out of 10 bets. I thought, ‘Who needs this? I can burn my money. Throw it in the street.’ ”

The future governor lost while sitting at a blackjack table, one of the easiest places to win. “It’s real easy for the house,” he remembers.

The future of California gambling might be different today if Davis had won a few hands--or played the quarter slots and hit a jackpot.

Might be, but probably not. Like his predecessor, Republican Pete Wilson, Democrat Davis abhors gambling for a societal reason: It can become addictive.

“I’m familiar with addiction,” Davis says. “My father was an alcoholic. My brother has battled alcoholism. I lost a brother-in-law to drugs. I’ve seen alcohol and drug addiction firsthand and I know they’re bad news. I don’t want to encourage addiction to anything--alcohol, drugs, tobacco or gambling.”

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Nevertheless, says the governor, “when the voters speak, I listen.”

The voters--an overwhelming 62.4% of them--sided with the Indians last November when they passed Prop. 5 to allow Nevada-style gambling on reservations. Being a good politician, Davis now has sided with the voters, although he was neutral on Prop. 5.

“Even though I’m not a gambler, I believe Indians have not fared well in this country,” he says. “[Gambling] gives them the opportunity to avoid taxpayer dependency and lead productive lives.”

Still, Davis does not want to go down in history as the governor who presided over a gargantuan growth in gambling. A “modest expansion” has been his goal--more than what Wilson wanted, but less than the unlimited gaming sought by tribes.

Davis’ opening came last month when the state Supreme Court ruled that Prop. 5 violated the California Constitution’s ban on Nevada-style casinos. Indians then were forced to negotiate a new gambling compact with the governor if they wanted to avoid spending millions more on a Prop. 5 revise to amend the Constitution.

That was most tribes’ goal. But the big Agua Caliente band of Cahuilla Indians in Palm Springs balked at bargaining. It was gathering signatures for the new ballot initiative and again was ready to bet on the voters. Its chairman accused the governor of a “take-it-or-leave-it . . . divide-and-conquer attitude.”

He was close to the mark. Davis adroitly isolated the Palm Springs Indians and signed compacts with about 60 more flexible tribes. “An intrusion on free enterprise,” charged the Agua Caliente chairman, Richard Milanovich, whose father is of Serb heritage.

Davis kept cool. His only response was to invite Milanovich into his private office for further negotiations late last Friday, during the final hectic hours of the 1999 legislative session. The governor informed only one aide, Chief of Staff Lynn Schenk. He would huddle secretly with the Indian chairman for a while, then dart out to negotiate with Assembly Republicans over a water bond issue. Back and forth. Davis succeeded at both bargaining tables.

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Schenk finished off the Agua Caliente negotiations during marathon talks that spanned 12 hours Monday. Twice, the Indians walked out. They demanded off-track betting at their casino and virtually no environmental regulations. Davis--through Schenk--replied “no” to each.

He did give the tribe a chance to opt out of the compact if, someday, racetracks and card rooms gain gambling rights equal to the Indians.

The final deal allows all tribes to use Nevada-type slots and double their present number of machines. There’ll also be blackjack and poker--but, unlike Nevada, no craps or roulette.

Davis satisfied labor by forcing the Indians to permit union organizing.

He also insisted the Palm Springs tribe drop its ballot initiative. So during the March primary, there will be one constitutional amendment sponsored by the governor, the Legislature and all the Indians. A stacked deck.

In the end, everybody won. The governor and the Legislature--which must ratify the compacts--retained some control over Indian gambling. They also formed alliances with tribes that have become huge campaign contributors.

The Indians gained a broad coalition of political support for their lucrative gambling industry. Now they won’t have to risk losing public favor during a bitter election fight.

California’s Indians have learned the winning gambler’s secret: Walk away when you’re ahead. And Davis, many years after that wallet-emptying Vegas trip, clearly knows how to play his cards.