Tribes File Suit to Halt Gaming Initiative Plan

Indian tribes that own casinos filed a suit Tuesday, urging that the California Supreme Court thwart a proposed ballot initiative that threatens the tribes’ state monopoly on slot machines.

Calling the proposed initiative a “fraud on the voters,” the tribes contend in their petition that the measure violates two state constitutional provisions, including one that states a ballot measure cannot contain more than one subject. The petition also alleges that the measure violates a prohibition against specific businesses’ benefiting directly from ballot measures they sponsor.

The initiative, intended for the November ballot, is financed by 11 card clubs and racetracks that could operate slot machines if the initiative makes the ballot and voters approve it.

In a third prong of their challenge, tribes say the initiative, which would create a state constitutional amendment, violates federal law governing Indian tribes and their casinos.

The initiative would require that tribes with casinos pay 25%, or more than $1 billion, of their gambling profits to state and local governments and comply with an array of other provisions.

Tribes now pay about $130 million a year, with the bulk earmarked for tribes with small casinos or no gambling operations.

The initiative states that all 64 California tribes must agree to the measure’s provisions. If any tribe refused, according to the initiative, the card rooms and racetracks would divide 30,000 slot machines and pay a third of their winnings -- about $1 billion a year -- to local law enforcement, firefighting and education-related programs.

Tribes call the measure “deceptive, manipulative and self-interested” and say it “raises questions central to the integrity of the initiative process itself.”

“Clearly ... the sponsors’ only real objective is to enact the parts of the measure that would put them in the slot machine business,” the petition states. “This sort of deceptive packaging is an intolerable abuse of the initiative process.”

So far, five tribes have anted up $1.5 million each to battle the card room-racetrack initiative.

Their law firms include Wilmer, Cutler, Pickering of Washington, D.C., and Mayer, Brown, Rowe & Maw, whose partners include former Assembly Speaker Bob Hertzberg, a Democrat, and former Assembly Republican leader Scott Baugh.

Greg Larsen, spokesman for the initiative’s backers, said, “History shows that the gaming tribes will do whatever it takes or spend whatever it takes to avoid paying their fair share of the billions they make gaming in California. We believe our initiative will withstand legal challenges.”

Backers of the initiative submitted 1.1 million signatures to elections officials last week to place the measure on the ballot.

Courts generally have hesitated to reject proposed initiatives before they go to statewide votes. The court is under no obligation to grant review of the petition.

Attorneys for the tribes said that if the court agrees to review the case, the deadline for a ruling would be early August, when the state must print the official ballot pamphlet.