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A winning hand

TWO YEARS AGO, CALIFORNIA VOTERS tried to end their gambling addiction, overwhelmingly rejecting Proposition 70, which would have allowed unlimited expansion of Indian-owned casinos. In the interim, Gov. Arnold Schwarzenegger has been playing with the state’s money, cutting deals with several tribes that allow them to build giant gambling palaces far bigger than anything in Las Vegas. Against the odds, so far he appears to be winning -- for himself and for the state.

Most recently, as Times staff writer Dan Morain reported Wednesday, the governor has reached agreements that would authorize up to 19,500 more slot machines in Southern California. That’s worrisome for communities surrounding these potential mega-casinos. But Schwarzenegger has managed to get the state a better deal with the tribes than it had before.

The bad news about such casino pacts is that although they must be approved by the Legislature, they are negotiated without public input, without uniform standards and without any restrictions on a casino’s size or location. In the past Schwarzenegger has approved monstrous developments such as a 2,500-slot casino in the Bay Area town of San Pablo, which was later rejected by the Legislature after a public outcry. Such large urban casinos were not what voters envisioned when they approved tribal gambling in 2000.

Also problematic is that Indian casinos, because they are on sovereign territory, are not subject to ordinary taxation or regulation. That can lead to improprieties such as those revealed by The Times two years ago at the Chumash Casino in Santa Ynez, where some overseers had criminal histories and slots were allegedly fixed. The casinos also place burdens on local police and fire departments.

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The good news is that the governor is making an effort to address these issues. For instance, the bill approving his pact with the Agua Caliente band of Cahuilla Indians, based near Palm Springs, requires the tribe to allow regular inspection of slot machines, prepare an environmental study before expanding and negotiate with Riverside County to mitigate any effects, such as increased demand for public services. In exchange, the tribe gets the right to expand from two casinos to three and to add 3,000 slots, while paying the state 15% of the profits on the new slots.

Since his election, Schwarzenegger has seen tribal casinos as an untapped source of revenue, with the potential to generate hundreds of millions of dollars for the state. And surely it has occurred to him that his agreements put his Democratic rivals in an awkward position. They must choose between two potentially lucrative groups of campaign donors: the labor movement, which opposes these casinos because they are non-union, and the tribal lobby. If only all election-year politics had such a favorable effect on state revenue.


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