Ads Take On Tribes on Gaming

Six months before the next election, card rooms and racetracks began airing television ads Friday favoring a possible ballot initiative that could give them 30,000 slot machines.

But the commercials make no mention of that possible outcome. They also fail to note that the measure -- financed exclusively by card clubs and horse tracks -- has not yet qualified for the ballot. In fact, the commercials don’t mention the proposed initiative at all.

Rather, they focus exclusively on the card rooms’ and racetracks’ main rivals: Indian tribes that have the exclusive right to operate slot machines in California.

The ads depict a mock Monopoly game board, and say tribes make as much as $8 billion annually but pay no taxes. The spots contrast California tribes with those in Connecticut and New York, which pay 25% of their winnings to the state.

Tribes are not required to release their financial information, but estimates of their casino revenue in California range from $4 billion to as much as $6 billion. Tribes that own casinos pay about $130 million a year to the state, with much of the money earmarked for other tribes with little or no gambling income.

The proposed initiative would require that more than 60 tribes in California comply with several conditions, including that they pay 25% of their casino profits to state and local governments, upward of $1 billion. If any one of the tribes balked, then 11 card rooms and five racetracks in California would be allowed to install a total of 30,000 slot machines. The tracks and card rooms would pay 33% of their take to the state, or roughly $1 billion a year.

The new commercials, being broadcast statewide, are scheduled to air for three weeks at a cost of more than $3 million, advocates of the proposal said Friday.

The early appearance of the spots indicates that the price tag for the battle over the measure will dwarf those of other California campaigns this fall.

“We believe it is important to educate the voters about the issue at hand,” said Greg Larsen, a spokesman for the racetracks and card rooms. “It is laying out the facts: that tribes really are not paying their fair share.”

Garry South, one of the tribes’ main campaign consultants, denounced the commercials and the proposed initiative as a “bait and switch” trick and “disingenuous and dishonest.” South accused the proposal’s proponents of misleading voters by claiming to want to force tribes to pay more to the state, while their true goal was to win the right to operate lucrative slot machines.

Consultants for five casino-owning tribes that have anted-up a combined $7.5 million to fight the measure said they were preparing ads that could begin airing as early as next week. They sent mailers to more than a million Californians this week denouncing the initiative as the “Larry Flynt Gambling Proposition.” Flynt, the Hustler magazine publisher, owns a card room in Gardena that could receive 1,000 slot machines if the initiative made the ballot and voters approved it.

The commercials appeared as card rooms and racetracks submitted petitions to place the measure on the ballot. If elections officials determine that the promoters gathered the requisite 600,000 valid signatures of registered voters, the measure will appear on the Nov. 2 ballot.

Also Friday, the Agua Caliente Band of Cahuilla Indians, owners of two Palm Springs casinos, began submitting signatures to elections officials for an initiative that would allow unlimited expansion of gambling on tribal land.

The measure would require that tribes pay 8.84% of net casino profits to the state.