Casino Foe Plans a Third Initiative

Countering two proposals to expand gambling, a critic of Indian casinos offered an initiative Tuesday that would limit the number and size of tribal wagering sites and force them to pay a significantly larger share of their winnings to state and local governments.

The new proposal is by Cheryl Schmit, founder and leader of the group Stand Up California, an organization of people critical of the proliferation of casinos. She is also a consultant to card clubs.

Unlike the other measures, the new proposal would authorize the governor to negotiate those payments with the tribes -- as long as the amount is far more than they currently pay and more than at least most tribes have appeared willing to give. Backers of all three measures are aiming for the November ballot, increasing the likelihood of a high-stakes initiative war over gambling.

Of the other two initiatives, one is being promoted by card rooms and horseracing tracks, and one by a tribe in Palm Springs that owns casinos. Both would increase gambling throughout the state, particularly in Southern California.

Schmit is a $4,500-a-month consultant for Valerie Brown, a Sonoma County supervisor hired by Bell Gardens, Commerce and other Los Angeles County cities with card clubs that are losing big to tribal casinos. Schmit said card rooms are not backing her initiative.

Under Schmit’s measure, California’s Indian tribes would retain their monopoly on Nevada-style gambling. But if they tried to expand their operations, they would have to cover local costs associated with their casinos and make higher payments to the state.

The measure also would make it easier for unions to organize workers at the tribes’ casinos, and require that tribes, which are immune to lawsuits because they are sovereign entities, permit some suits in state court.

“Basically, I’m very discontented with the measures that are out there,” Schmit said in an interview. “They didn’t address the gaming issues that are of the greatest concern.”

Schmit has never before promoted an initiative and said she does not have commitments for the millions she would need to mount a campaign. But in the six years she has run Stand Up California, she has shown an ability to tap citizen antipathy toward gambling and to muster financial backing to battle gambling expansion.

Schmit’s offering comes as Gov. Arnold Schwarzenegger’s aides have opened negotiations with tribes. Schwarzenegger has called on tribes to pay up to 25% of their gambling profits to the state, starting with $500 million in the coming fiscal year.

Attorney Howard Dickstein, who represents three tribes that have entered into talks with the administration, denounced the coming ballot war.

“This proliferation of initiative after initiative makes it clear that the ... negotiations are the way to resolve these complicated issues,” Dickstein said.

Besides requiring that tribes help pay for police, fire, traffic and other costs, Schmit’s measure would require that tribes pay the state a percentage of their gambling winnings.

Under her initiative, the governor’s office and tribes would negotiate the percentage, but it could not be less than 8.84% of the casinos’ gross income. In exchange, each tribe could add 1,000 slot machines, the most lucrative game in any casino. Currently, 15 tribes have casinos with 2,000 slot machines each, the maximum allowed.

Schmit’s measure comes a week after an initiative proposed by the Agua Caliente Band of Cahuilla Indians, owners of a casino in downtown Palm Springs and another off Interstate 10. The Agua Caliente’s measure would require that tribes pay 8.84% of their net income to the state in exchange for the right to unlimited expansion of their casinos on tribal land -- essentially the same as other businesses pay in taxes on corporate profits.

Card rooms and racetracks, meanwhile, are preparing to gather signatures on petitions to put a measure on the November ballot. It would grant them 30,000 slot machines, unless tribes agree to pay the state 25% of their winnings -- roughly $1.25 billion a year.

Card rooms and tracks would pay the government 33% of their slot winnings, or about $1 billion a year, with most of it going to local police, fire and education programs.