Fight Over Slots Might Come to End

Backers of an initiative to authorize slot machines at card clubs and race tracks plan to meet today to consider suspending their campaign, which is lagging badly in public and private polls despite a multimillion-dollar ad blitz.

A decision to stop pushing Proposition 68 would be a significant victory for Indian tribes, which have been campaigning against it to protect their monopoly on slot machines, and for Gov. Arnold Schwarzenegger, who also opposes the initiative.

Card room and horse racing representatives are scheduled to meet as polls show that with less than a month before the Nov. 2 vote, their measure languishes with support from only about one-third of California voters. The low standing comes even though backers of the initiative have spent more than $9 million on a high-profile television ad campaign over the last three weeks.

“We’re trying to evaluate everything,” said Terry Francher, an executive at Bay Meadows racetrack in San Mateo. “I think we had some attractive ads. But there are a lot of ads on the air.”

A poll done recently for backers of the initiative confirmed that support for Proposition 68 had “not significantly” shifted despite the spending so far, said David Townsend, the main consultant for the measure.

“Nothing has been decided” on the future of the campaign, Townsend added.

Haig Kelegian, a co-owner of the Bicycle Club in Bell Gardens, another major backer of the measure, offered a downbeat assessment of its prospects: “We may be headed for a knockout,” he said. Kelegian said he did not plan to attend today’s meeting, though he added that “I think we’ll continue to fight.”

Speaking on the condition of anonymity, however, consultants involved in the campaign confirmed that the issue of pulling the plug on the ad campaign would be a major focus of today’s conclave. “The proponents are going to reassess their commitment to the initiative,” one said.

Altogether, card rooms and racetracks reported having spent $27.7 million to get Proposition 68 on the ballot and promote it. Tribes opposing the measure have spent $33.1 million to defeat it, campaign finance reports show.

Two tribes also have reported spending $22.5 million so far in backing a competing measure, Proposition 70, which also has been languishing in the polls and faces strong opposition from the governor, who plans to begin public campaigning against it today.

Proposition 70 would authorize unlimited casino expansion on tribal land. It also would require that tribes pay 8.84% of their net revenue to the state.

If backers of Proposition 68 decide to stop spending money on it, some may consider shifting money to help defeat Proposition 70, which would further lengthen the odds against its passage. Some backers of Proposition 68 may also advocate continuing to air ads critical of the growth of Indian gambling as a way of paving the way for a future campaign.

In addition, racetrack representatives also will be discussing creating a $1-million independent campaign committee to target legislators who have failed to support their issues in the Legislature, consultants said. Card rooms already have about $1 million earmarked for legislative races.

“The object remains unchanged: to try to get a level playing field,” said Jack Liebau, another executive at the Bay Meadows racetrack.

Officials at tracks and card rooms say they can’t compete with Indian casinos that offer slots and a variety of card games, including blackjack, that are not offered at commercial card rooms.

Proposition 68 was promoted as a way to force tribes to pay 25% of their gambling revenue to local public safety and social services programs and comply with an array of other state laws. But the measure includes a twist. If any tribe balked at any of its terms, the initiative would allow five racetracks and 11 card rooms to split 30,000 slot machines and pay a third of their revenue -- more than $1 billion -- to local governments.

The initiative won endorsements from Los Angeles County Sheriff Lee Baca and Sacramento County Sheriff Lou Blanas, as well as the Assn. of Los Angeles Deputy Sheriffs. But most other major elected officials and law enforcement organizations have denounced it.

Its backers had hoped to capitalize on last year’s recall campaign, in which Schwarzenegger used tribes as a foil, citing their heavy campaign spending as an example of what was wrong with Sacramento.

During the campaign, Schwarzenegger called on the tribes to pay their “fair share,” an amount he set at 25% of their revenue.

Under federal law, tribes are sovereign governments. They are not required to pay state or local taxes. Nor are they required to comply with many state laws, such as those related to environmental protection.

Indian tribes do pay about $130 million a year into two funds: one designed to aid local governments, the other to help tribes that have small or no gambling operations.

Television spots supporting Proposition 68 have not focused on what the initiative would do. Rather, they have attacked tribes, portraying them as having become rich while paying no taxes.

One ad features actors angrily describing tribal gambling as having become an $8-billion business while paying no taxes. Another features an actor who decries how the state took away a tax break for teachers and repeats that tribes pay no taxes.

A third ad cites the tribes’ heavy campaign contributions aimed at protecting them from having to pay taxes.

Implicit in the spots is an assumption that public attitudes toward tribes have shifted. But the backers of Proposition 68 may have relied too much on that assumption.

“The fundamental views of most Californians is still positive toward tribes,” said Republican consultant Wayne Johnson of Sacramento, who is not directly involved in the gambling fight.

“They see tribal businesses as unique and as being justified because of the past inequities,” Johnson added.